KCES’s College of Engineering and Management

Unit-1
Management and Principles of Management

1.1 Introduction to Management:

Management Science

The beauty of management lies in the fact that it is a multiverse subject. In other words, it can
be science, art, profession or all of these simultaneously depending on your perception.
Management is very systematic and concrete and so we consider management as a science.

Management science is a broad, interdisciplinary study of decision making and problem

solution within an organization. The interdisciplinary study has strong ties to economics,
engineering, management, business administration and other fields.

Various scientific principles such as mathematical models, algorithms, and statistics are
implemented. The objective is to increase and better a company’s capital and to take more
precise and rational decisions. Management science helps organisations reach their goals
using scientific principles and methods.

Management science can be defined as a problem-solving process used by an

interdisciplinary team to develop models that represent simple and complex functional
relationships and provide management guidance for decision-making.

Management : Concept, Nature, Importance

The term ‘management’ has been used in different senses. Sometimes it refers to the process
of planning, organizing, staffing, directing, coordinating and controlling, at other times it is
used to describe it as a function of managing people. It is also referred to as a body of
knowledge, a practice and discipline. There are some who describe management as a
technique of leadership and decision-making while some others have analyzed management
as an economic resource, a factor of production or a system of authority.

Management is an individual or a group of individuals that accept responsibilities to run an

organisation. They Plan, Organise, Direct and Control all the essential activities of the
organisation. Management does not do the work themselves. They motivate others to do the
work and co-ordinate (i.e. bring together) all the work for achieving the objectives of the
organisation.

Management brings together all six M’s i.e. Men and Women, Money, Machines, Materials,
Methods and Markets. They use these resources for achieving the objectives of the
organisation such as high sales, maximum profits, business expansion, etc.

It is a purposive activity. It is something that directs group efforts towards the attainment of
certain pre - determined goals. It is the process of working with and through others to
effectively achieve the goals of the organization, by efficiently using limited resources in the
changing world. Of course, these goals may vary from one enterprise to another. E.g.: For
one enterprise it may be launching of new products by conducting market surveys and for
other it may be profit maximization by minimizing cost.

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Management involves creating an internal environment: - It is the management which puts

into use the various factors of production. Therefore, it is the responsibility of management to
create such conditions which are conducive to maximum efforts so that people are able to
perform their task efficiently and effectively. It includes ensuring availability of raw
materials, determination of wages and salaries, formulation of rules & regulations etc.

Therefore, we can say that good management includes both being effective and efficient.
Being effective means doing the appropriate task i.e, fitting the square pegs in square holes
and round pegs in round holes. Being efficient means doing the task correctly, at least
possible cost with minimum wastage of resources.

Definitions:
Various definitions of management are discussed as follows:

Mary Parker Follett: “Management is the art of getting things done through others.” Follett
describes management as an art of directing the activities of other persons for reaching
enterprise goals. It also suggests that a manager carries only a directing function.

Harold Koontz:“Management is the art of getting things done through and with people in
formally organized groups.” Koontz has emphasized that management is getting the work
done with the co-operation of people working in the organization.

According to George R. Terry, ''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."

Peter Drucker:Management is a multipurpose organ that manages a business and manages

Managers and manages Workers and work.

According to F.W. Taylor, "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."

Management can also be defined in detail as-

1. Management as a Process
2. Management as an Activity
3. Management as a Discipline
4. Management as a Group
5. Management as a Science
6. Management as an Art
7. Management as a Profession

Objectives of Management:
The primary objective of management is to run the enterprise smoothly. The profit earning
objective of a business is also to be kept in mind while undertaking various functions.

Following are the broad objectives of management:

1. Proper Utilization of Resources:

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The main objective of management is to use various resources of the enterprise in a most
economic way. The proper use of men, materials, machines and money will help a business to
earn sufficient profits to satisfy various interests. The proprietors will want more returns on
their investments while employees, customers and public will expect a fair deal from the
management. All these interests will be satisfied only when physical resources of the business
are properly utilized.

2. Improving Performance:
Management should aim at improving the performance of each and every factor of
production. The environment should be so congenial that workers are able to give their
maximum to the enterprise. The fixing of objectives of various factors of production will help
them in improving their performance.

3. Mobilizing Best Talent:

The management should try to employ persons in various fields so that better results are
possible. The employment of specialists in various fields will be increasing the efficiency of
various factors of production. There should be a proper environment which should encourage
good persons to join the enterprise. The better pay scales, proper amenities, future growth
potentialities will attract more people in joining a concern.

4. Planning for Future:

Another important objective of management is to prepare plans. No management should feel
satisfied with today’s work if it has not thought of tomorrow. Future plans should take into
consideration what is to be done next. Future performance will depend upon present
planning. So, planning for future is essential to help the concern.

Importance of Management

 It helps in Achieving Group Goals - It arranges the factors of production, assembles and
organizes the resources, integrates the resources in effective manner to achieve goals. It
directs group efforts towards achievement of pre-determined goals. By defining objective
of organization clearly there would be no wastage of time, money and effort.
Management converts disorganized resources of men, machines, money etc. into useful
enterprise. These resources are coordinated, directed and controlled in such a manner that
enterprise work towards attainment of goals.
 Optimum Utilization of Resources - Management utilizes all the physical & human
resources productively. This leads to efficacy in management. Management provides
maximum utilization of scarce resources by selecting its best possible alternate use in
industry from out of various uses. It makes use of experts, professional and these services
leads to use of their skills, knowledge, and proper utilization and avoids wastage. If
employees and machines are producing its maximum there is no under employment of
any resources.
 Reduces Costs - It gets maximum results through minimum input by proper planning and
by using minimum input & getting maximum output. Management uses physical, human
and financial resources in such a manner which results in best combination. This helps in
cost reduction.
 Establishes Sound Organization - No overlapping of efforts (smooth and
coordinated functions). To establish sound organizational structure is one of the objective of
management which is in tune with objective of organization and for fulfillment of this, it

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establishes effective authority & responsibility relationship i.e. who is accountable to whom,
who can give instructions to whom, who are superiors & who are subordinates. Management
fills up various positions with right persons, having right skills, training and qualification. All
jobs should be cleared to everyone.
Establishes Equilibrium - It enables the organization to survive in changing environment.
It keeps in touch with the changing environment. With the change is external environment,
the initial co-ordination of organization must be changed. So it adapts organization to
changing demand of market / changing needs of societies. It is responsible for growth and
survival of organization.

 Essentials for Prosperity of Society - Efficient management leads to better economical

production which helps in turn to increase the welfare of people. Good management
makes a difficult task easier by avoiding wastage of scarce resource. It improves standard
of living. It increases the profit which is beneficial to business and society will get
maximum output at minimum cost by creating employment opportunities which generate
income in hands. Organization comes with new products and researches beneficial for
society.
 Development of resources: Management develops various resources. This is true with
human as well as non-human factors. Most of the researches for resource development are
carried on in an organization way and management is involved in those activities.
 To incorporate innovations: Today changes are occurring at a very fast rate in both
technology and social process and structure these changes need to be incorporated to keep
the organizations alive and efficient. Therefore, they require high degree of specialization,
high level of competence, and complex technology. All these require efficient
management so that organizations work in the most efficient way.
 Integrating various interest groups: In the organized efforts, there are various interest
groups and they put pressure over other groups for maximum share in the combined
output. For example, in the case of business organization, there are various pressure
groups such as shareholders, employees, government etc. These interest groups have
pressure on an organization.
 Stability in the society: Management provides stability in the society by changing and
modifying the resources in accordance with the changing environment of the society. In
the modern age, more emphasis is on new inventions for the betterment of human beings.
These inventions make old systems and factors mostly obsolete and inefficient.

Nature and Characteristics of MANAGEMENT

The salient features which highlight the nature of management are as follows:

(i)Management is goal-oriented: Management is not an end in itself. It is a means to

achieve certain goals. Management has no justification to exist without goals. Management
goals are called group goals or organisational goals. The basic goal of management is to
ensure efficiency and economy in the utilisation of human, physical and financial resources.
The success of management is measured by the extent to which the established goals one
achieved. Thus, management is purpose full.

(ii)Management is universal: Management is an essential element of every organised

activity irrespective of the size or type of activity. Wherever two or more persons are engaged
in working for a common goal, management is necessary. All types of organisations, e.g.,

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family, club, university, government, army, cricket team or business, require management.
Thus, management is a pervasive activity. The fundamental principles of management are
applicable in all areas of organised effort. Managers at all levels perform the same basic
functions.
(iii)Management is an Integrative Force: The essence of management lies in the
coordination of individual efforts in to a team. Management reconciles the individual goals
with organisational goals. As unifying force, management creates a whole that is more than
the sum of individual parts. It integrates human and other resources.

(iv) Management is a Social Process: Management is done by people, through people and
for people. It is a social process because it is concerned with interpersonal relations. Human
factor is the most important element in management. According to Appley, “Management is
the development of people not the direction of things. A good manager is a leader not a boss.
It is the pervasiveness of human element which gives management its special character as a
social process”.
(v) Management is multidisciplinary: Management has to deal with human behaviour
under dynamic conditions. Therefore, it depends upon wide knowledge derived from several
disciplines like engineering, sociology, psychology, economics, anthropology, etc. The vast
body of knowledge in management draws heavily upon other fields of study.

(vi)Management is a continuous Process: Management is a dynamic and an on-going

process. The cycle of management continues to operate so long as there is organised action
for the achievement of group goals.
(vii)Management is Intangible: Management is an unseen or invisible force. It cannot be
seen but its presence can be felt everywhere in the form of results. However, the managers
who perform the functions of management are very much tangible and visible.

(viii) Management is an Art as well as Science: It contains a systematic body of theoretical

knowledge and it also involves the practical application of such knowledge. Management is
also a discipline involving specialised training and an ethical code arising out of its social
obligations. On the basis of these characteristics, management may be defined as a
continuous social process involving the co-ordination of human and material resources in
order to accomplish desired objectives. It involves both the determination and the
accomplishment of organisational goals.

Management: Art and Science & as a Profession, Management Vs Administration,

Levels of Management & their respective functions, Managerial Skills & roles.

Management: Management as a science, art and profession!

Some authors regard management as science because there are well tested and experimented
principles of management, some authors describe management as an art because more
practice is required in management and some authors consider that management is going
towards the paths of profession.

Is management an Art, Science or Profession?

Before we prove whether management is an art, science or profession. It is essential to
understand the meaning of these terms.

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An art is the practical skill and ingenuity of doing specific things to achieve the desired result
or objective.In other words, an art is the application of knowledge and skill to do specific
things to achieve the desired result or objective. The essential features of art are as follows;

1. Practical knowledge
2. Personal skills
3. Improved through continuous practice
4. Result oriented approach
5. Creativity

In this sense, management is an art because it is concerned with the application of

management knowledge, Principles, skills and theories to achieve the desired objectives and
to solve certain management problem in an organization.

Example of art - When a tailor shapes a piece of cloth for a shirt, a goldsmith converse a
piece of gold into a ring and a carpenter shapes a log of wood for a table or a chair, each one
practices a art or a skill. Behind all these activities, there are certain principles. Such
principles are led down by the Scientist in a systematic manner. Such principle can be applied
universally.

Science is the systematized body of knowledge obtained through observation and

experimentation which is tested critically and brought under general principles. Such
principles are universally applicable.
The essential features of Science are as follows;

1. Principles are universally applicable.

2. Such principles are obtained and developed through scientific observation and
experimentation.
3. Established cause and effect relationship between various actors.
4. Their validity can be verified and predictable.

Some of the examples of scientific principles are such: Two atoms of Hydrogen and One
atom of Oxygen form molecule of water i.e. H2 + O1 = Water. Likewise if something is
thrown towards the sky finally it comes down to the earth due to the law of Gravitation.
However, management is not an exact Science like Chemistry, Physics, etc. It is social and
behavioral science because it has to deal with the behaviors of human beings and the
behavior of human beings is ever changing and cannot be predicted accurately.

Profession is an occupation or a job done by a person, which is concerned with rendering

personal service of special and expert nature. In order to practice profession, one must have
obtained certain academic qualification and training in a related field from the Government
recognized professional institution. Similarly, a professional has to follow the ethical code of
conduct of an organization.
The essential feature of profession are as follows;

1. An occupation or a job is done by a person to render personal service of expert and

special nature.
2. Formal education and training from the Government recognized institution.
3. Code of conduct
4. Preference of personal service.

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For example - In order to become a financial manager, one must have obtained Diploma or
Degree with financial management as his/her major field of study. Like wise in order to
become human resource manager, one must have passed Diploma with Human Resource
Management as his/her major field of study. Sometimes, a minimum period of training and
experience may be also fixed for a professional manager.
So, Management is an Art, Science and Profession.

Management Vs. Administration

Management-Management is defined as an act of

managing people and their work, for achieving a common
goal by using the organization’s resources. It creates
an environment under which the manager and his
subordinates can work together for the attainment of group
objective. It is a group of people who use their skills and
talent in running the complete system of the organization. It is an activity, a function, a
process, a discipline and much more.

Planning, organizing, leading, motivating, controlling, coordination and decision making are
the major activities performed by the management. Management brings together 5M’s of the
organization, i.e. Men, Material, Machines, Methods, and Money. It is a result oriented
activity, which focuses on achieving the desired output.

Administration-

The administration is a systematic process of administering the management of a business

organization, an educational institution like school or college, government office or any non
profit organization. The main function of administration is the formation of plans, policies,
and procedures, setting up of goals and objectives, enforcing rules and regulations, etc.
Administration lays down the fundamental framework of an organization, within which the
management of the organization functions.
The nature of administration is bureaucratic. It is a broader term as it involves forecasting,
planning, organizing and decision-making functions at the highest level of the enterprise.
Administration represents the top layer of the management hierarchy of the organization.
These top level authorities are the either owners or business partners who invest their capital
in starting the business. They get their returns in the form of profits or as a dividend.

Every manager is concerned with both

- administrative management function
and operative management function as
shown in the figure. However, the
managers who are higher up in the
hierarchy denote more time on
administrative function & the lower
level denote more time on directing
and controlling worker’s performance
i.e. management. The Figure clearly
shows the degree of administration and
management performed by the
different levels of management.

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Management Vs Administration (Comparison Chart)

Basis for
Management Administration
Comparison

An organized way of managing The process of administering an organization

people and things of a business by a group of people is known as the
Meaning
organization is called the Administration.
Management.

Authority Middle and Lower Level Top level

Role Executive Decisive

Area of It has full control over the activities of the

It works under administration.
operation organization.

Profit making organizations, i.e. Government offices, military, clubs, business

Applicable to business organizations. enterprises, hospitals, religious and educational
organizations.

Who will do the work? And How What should be done? And When is should be
Decides
will it be done? done?

Putting plans and policies into Formulation of plans, framing policies and
Work
actions. setting objectives.

Managing work Making best possible allocation of limited

Focus on
resources.

Key person Manager Administrator

Employees, who work for Owners, who get a return on the capital
Represents
remuneration. invested by them.

The Top 3 Levels of Management

As we have already learnt that management does not refer to a single individual but it refers
to a group of persons. In companies large number of persons are employed and placed at
different places to perform different managerial activities.

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To carry on these activities these employees are given necessary authority and responsibility.
This grant of authority results in creation of chain of authority. This chain is divided into
three levels which result in creation of three levels of management.
The main levels of management are:
1. Top level management.
2. Middle level management.
3. Supervisory level, operational or lower level of management.

1. 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.

Main functions of top level management are:

(a) Determining the objectives of the enterprise. The top level managers formulate the main
objectives of the organisation. They form long term as well as short term objectives.

(b) Framing of plans and policies. The top level managers also frame the plans and policies to
achieve the set objectives.

(c) Organising activities to be performed by persons working at middle level. The top level
management assigns jobs to different individuals working at middle level.

(d) Assembling all the resources such as finance, fixed assets etc. The top level management
arranges all the finance required to carry on day to day activities. They buy fixed assets to
carry on activities in the organisation.

(e) Responsible for welfare and survival of the organisation—Top level is responsible for the
survival and growth of the organisation. They make plan to run the organisation smoothly
and successfully.

(f) Liaison with outside world, for

example, meeting Government
officials etc. The top level
management remains in contact with
government, competitors, suppliers,
media etc. Jobs of top level are
complex and stressful demanding
long hours of commitment towards
organisation.

(g) Welfare and survival of the

organisation.

2. Middle Level Management:

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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.
They act as a linking pin between top and lower level
management. They also exercise the functions of top level for
their department as they make plans and policies for their
department, organise and collect the resources etc.
Main functions of middle level management are

(a) Interpretation of policies framed by top management to lower level. Middle level
management act as linking pin between top level and lower level management. They only
explain the main plans and policies framed by top level management to lower level.

(b) Organising the activities of their department for executing the plans and policies.
Generally middle level managers are the head of some department. So they organise all the
resources and activities of their department.

(c) Finding out or recruiting/selecting and appointing the required employees for their
department. The middle level management selects and appoints employees of their
department.

(d) Motivating the persons to perform to their best ability. The middle level managers offer
various incentives to employees so that they get motivated and perform to their best ability.

(e) Controlling and instructing the employees, preparing their performance reports etc. The
middle level managers keep a watch on the activities of low level managers. They prepare
their performance appraisal reports.

(f) Cooperate with other departments for smooth functioning.

(g) Implementing the plans framed 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.
Their authority is limited. The quality and quantity of output depends upon the efficiency of
this level of managers. They pass on the instruction to workers and report to the middle level
management. They are also responsible for maintaining discipline among the workers.

Functions of lower level management are:

(a) Representing the problems or grievances of workers before the middle level management.
The supervisory level managers are directly linked with subordinates so they are the right
persons to understand the problems and grievances of subordinates. They pass these problems
to middle level management.

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(b) Maintaining good working conditions and developing healthy relations between superior
and subordinate. The supervisory managers provide good working conditions and create
supportive work environment which improve relations between supervisors and subordinates.

(c) Looking to safety of workers. Supervisory level managers provide safe and secure work
environment for workers.

(d) Helping the middle level management in recruiting, selecting and appointing the workers.
The supervisory level managers guide and help the middle level managers when they select
and appoint employees.

(e) Communicating with workers and welcoming of their suggestions. The supervisory level
managers encourage the workers to take initiative. They welcome their suggestions and
reward them for good suggestions.
(f) They try to maintain precise standard of quality and ensure steady flow of output. The

supervisory level managers make sure that quality standards are maintained by the workers.

(g) They are responsible for boosting the morale of the workers and developing the team
spirit in them. They motivate ‘the employees and boost their morale.

(h) Minimising the wastage of materials.

Functions of Management.

Management has been described as a social process involving responsibility for economical
and effective planning & regulation of operation of an enterprise in the fulfillment of given
purposes. It is a dynamic process consisting of various elements and activities. These
activities are different from operative functions like marketing, finance, purchase etc. Rather
these activities are common to each and every manger irrespective of his level or status.

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Different experts have classified functions of management. According to George & Jerry,
“There are four fundamental functions of management i.e. planning, organizing, actuating
and controlling”.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, &
to control”.

Whereas Luther Gullick has given a keyword:

’POSDCORB’: where,
P stands for Planning,
O for Organizing,
S for Staffing,
D for Directing,
Co for Co-ordination,
R for reporting &
B for Budgeting.
But the most widely accepted are functions of management given by KOONTZ and
O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.
For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each
function blends into the other & each affects the performance of others.
1. Planning
It is the basic function of management. It deals with chalking out a future course of action &
deciding in advance the most appropriate course of actions for achievement of pre-
determined goals.
According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to
do. It bridges the gap from where we are & where we want to be”.
A plan is a future course of actions. It is an exercise in problem solving & decision making.
Planning is determination of courses of action to achieve desired goals. Thus, planning is a
systematic thinking about ways & means for accomplishment of pre-determined goals.
Planning is necessary to ensure proper utilization of human & non-human resources. It is all
pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties,
risks, wastages etc.

2. Organizing

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It is the process of bringing together physical, financial and human resources and developing
productive relationship amongst them for achievement of organizational goals.
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”. To organize a business
involves determining & providing human and non-human resources to the organizational
structure.
Organizing as a process involves:
• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
• Coordinating authority and responsibility relationships.
3. Staffing
It is the function of manning the organization structure and keeping it manned. Staffing has
assumed greater importance in the recent years due to advancement of technology, increase in
size of business, complexity of human behavior etc. The main purpose o staffing is to put
right man on right job i.e. square pegs in square holes and round pegs in round holes.
According to Kootz&O’Donell, “Managerial function of staffing involves manning the
organization structure through proper and effective selection, appraisal & development of
personnel to fill the roles designed un the structure”.
Staffing involves:
• Manpower Planning (estimating man power in terms of searching, choose the person and
giving the right place).
• Recruitment, Selection & Placement.
• Training & Development.
• Remuneration.
• Performance Appraisal.
• Promotions & Transfer.
4. Directing
It is that part of managerial function which actuates the organizational methods to work
efficiently for achievement of organizational purposes. It is considered life-spark of the
enterprise which sets it in motion the action of people because planning, organizing and
staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect

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of management which deals directly with influencing, guiding, supervising, motivating sub-
ordinate for the achievement of organizational goals.
Direction has following elements:
• Supervision
• Motivation
• Leadership
• Communication
Supervision- implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.
Leadership- may be defined as a process by which manager guides and influences the work
of subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from one
person to another. It is a bridge of understanding.
5. Controlling
It implies measurement of accomplishment against the standards and correction of deviation
if any to ensure achievement of organizational goals. The purpose of controlling is to ensure
that everything occurs in conformities with the standards. An efficient system of control helps
to predict deviations before they actually occur.
According to Theo Haimann, “Controlling is the process of checking whether or not proper
progress is being made towards the objectives and goals and acting if necessary, to correct
any deviation”.
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”.
Therefore controlling has following steps:
1. Establishment of standard performance.
2. Measurement of actual performance.
3. Comparison of actual performance with the standards and finding out deviation if any.
4. Corrective action.

Managerial Skills& Roles

Managerial Skills-Managers at every level in the management hierarchy must exercise three
basic types of skills: technical, human, and conceptual. All managers must acquire these
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skills in varying proportions, although the importance of each category of skill changes at
different management levels.

Technical skills:

 Technical skills refer to the ability and knowledge in using the equipment, techniques
and procedure involved in performing specific tasks.
 These skills require specialized knowledge and proficiency in the mechanics of a
particular.
 Technical skills lose relative importance at higher levels of the management
hierarchy, but most top executives started out as technical experts.

Human skills:

 Human skills refer to the ability of a manager to work effectively with other people
both as individual and as members of a group.
 Human skills are concerned with understanding of people.
 These are required to win cooperation of others and to build effective work teams.

Conceptual skills:

 Conceptual skills involve the ability to see the whole organization and the
interrelationships between its parts.
 These skills refer to the ability to visualize the entire picture or to consider a situation
in its totality.
 These skills help the managers to analyze the environment and to identify the
opportunities.
 Conceptual skills are especially important for top-level managers, who must develop
long-range plans for the future direction of their organization.

Managerial Roles
To meet the many demands of performing their functions, managers assume multiple roles. A
role is an organized set of behaviors. Henry Mintzberg has identified ten roles common to the
work of all managers.
The ten roles are divided into three groups:

 Interpersonal

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 Informational
 Decisional

The performance of managerial roles and the requirements of these roles can be played at
different times by the same manager and to different degrees depending on the level and
function of management. The ten roles are described individually, but they form an integrated
whole.

1.Interpersonal Roles: The interpersonal roles link all managerial work together. The three
interpersonal roles are primarily concerned with interpersonal relationships.

 Figurehead Role: The manager represents the organization in all matters of

formality. The top level manager represents the company legally and socially to those
outside of the organization. The supervisor represents the work group to higher
management and higher management to the work group.
 Liaison Role: The manger interacts with peers and people outside the organization.
The top level manager uses the liaison role to gain favors and information, while the
supervisor uses it to maintain the routine flow of work.
 The leader Role: It defines the relationships between the manger and employees.

2. Informational Roles: The informational roles ensure that information is provided. The
three informational roles are primarily concerned with the information aspects of managerial
work.
 Monitor Role: The manager receives and collects information about the operation of
an enterprise.
 Disseminator Role: The manager transmits special information into the organization.
The top level manager receives and transmits more information from people outside
the organization than the supervisor.
 Spokesperson Role: The manager disseminates the organization’s information into
its environment. Thus, the top level manager is seen as an industry expert, while the
supervisor is seen as a unit or departmental expert.

3. Decisional Roles: The decisional roles make significant use of the information and there
are four decisional roles.
 Entrepreneur Role: The manager initiates change, new projects; identify new ideas,
delegate idea responsibility to others.
 Disturbance Handler Role: The manager deals with threats to the organization. The
manager takes corrective action during disputes or crises; resolve conflicts among
subordinates; adapt to environmental crisis.
 Resource Allocator Role: The manager decides who gets resources; schedule, budget
set priorities and chooses where the organization will apply its efforts.
 Negotiator Role: The manager negotiates on behalf of the organization. The top level
manager makes the decisions about the organization as a whole, while the supervisor
makes decisions about his or her particular work unit.

1.2 Evolution of Management Thought: Classical approach, scientific approach, Behavioral

approach and Quantitative approach

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Introduction:
The evolution of management thought is the history of the theories and practices that guide
how people are managed in an organization. It's a constantly evolving process, with modern
management theories built on the foundation of earlier ones. Understanding the evolution of
management thought can help you determine which management practices work best for your
organization.

The evolution of management can be traced back to the days when human beings started living in
groups. One can argue that management took the form of leadership which was essential to
coordinate the efforts of the group members in order to arrange the necessaries of life.
According to Egyptian literature of 1300 B.C., the art of management was being practiced in
different forms by different people. The literature clearly indicates the recognition of the
importance of organisation and administration in the bureaucratic setup. Similar records exist for
China.
Modern management has developed through several stages or approaches. These approaches to the
study of management may be classified as under:
I. Classical Approach
II. Neo-classical Approach
III. Behavioral Science Approach
IV. Social System Approach
V. Modern Organization Approach
VI. Contingency Approach

Evolution of Management Thought

Classical Theory of Neo- Classical Theory of Modern Management

Management Management (1920s- Theory
(1880-1920s) 1940s) (1940s- Till Date)

 Scientific Management  Human Relation  Quantitative

 Administrative Approach Approach
Management  Behavioural  Contingency
 Bureaucratic Management Approach Approach
 Systems Approach

1. Classical Approach
The classical theory represents the traditionally accepted views about organisations. In a way, it
signifies the beginning of the systematic study of organisations. That is why it is said to be the
oldest school of thought about organisations and their management.
The classical theories concentrated on organisation structure for the achievement of organisational
goals and also developed certain principles of management.
The classical writers thought of the organisation in terms of its purpose and formal structure. They
placed emphasis on the planning of work, the technical requirements of the organisation,

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principles of management and the assumptions of rational and logical behavior. Thus, the classical
theorists dealt almost exclusively with the anatomy of formal organisation structure.
The classical theory ignored the impact of the external environment on the working of the
organisation.
Thus, it treated organisations as closed systems.
The classical theory (focus on Management Principles for efficient organisation) can be studied
under three streams, namely:
a) Administrative Functional or Process Approach (Henri Fayol)
b) Scientific Management (F.W. Taylor)
c) Bureaucratic Approach (Max Weber)

Scientific management theory: Scientific management theory is important because its

approach to management is found in almost every industrial business operation across the
world. Its influence is also felt in general business practices such planning, process design,
quality control, cost accounting, and economics. Your knowledge of the theory will give you
a better understanding of industrial management. You'll also understand how a manager can
use quantitative analysis, an examination of numbers and other measurable data, in
management to improve the efficiency and effectiveness of business operations.
The founding father of scientific management theory is Frederick W. Taylor (1856-1915). He
was an American inventor and engineer. His two most important works were Shop
Management (1903) and The Principles of Scientific Management (1911).
The husband and wife team of Frank Gilbreth, Sr. and Lillian Moller Gilbreth contributed to
the theory. This duo continued the practice of time and motion studies started by Taylor,
believing they could find the best way to perform each task studied.

Definition, Principles & Contributions

Scientific management theory seeks to improve an organization's efficiency by systematically
improving the efficiency of task completion by utilizing scientific, engineering, and
mathematical analysis. The goal is to reduce waste, increase the process and methods of
production, and create a just distribution of goods. This goal serves the common interests of
employers, employees, and society.
Scientific management theory can be summarized by Taylor's Four Principles:
1. Managers should gather information, analyze it, and reduce it to rules, laws, or
mathematical formulas.
2. Managers should scientifically select and train workers.
3. Managers should ensure that the techniques developed by science are used by the
workers.
4. Managers should apply the work equally between workers and themselves, where
managers apply scientific management theories to planning and the workers perform
the tasks pursuant to the plans.

Scientific management, also called Taylorism, It is a theory of management that analyzes and
synthesizesworkflows. Its main objective is improving economic efficiency, especially labor
productivity. It was one of the earliest attempts to apply science to the engineering of
processes and to management.
Its development began in the United States with Frederick Winslow Taylor in the 1880s and
'90s within the manufacturing industries. Its peak of influence came in the 1910s;by the
1920s, it was still influential but had entered into competition and syncretism with opposing
or complementary idea.

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Although scientific management as a distinct theory or school of thought was obsolete by the
1930s, most of its themes are still important parts of industrial engineering and management
today. These include analysis; synthesis; logic; rationality; empiricism; work ethic; efficiency
and elimination of waste; standardization of best practices; disdain for tradition preserved
merely for its own sake or to protect the social status of particular workers with particular
skill sets; the transformation of craft production into mass production; and knowledge
transfer between workers and from workers into tools, processes, and documentation.

Administrative Management Theory

The proponents of this school of thought (theory) believe in studying the entire organization
by developing more general theories of what managers do and what constitutes good
management (Robbins and Coulter, 1996:43). The theory grew out of the desire to find
appropriate guidelines for managing large and complex enterprises. The two prominent
proponents of this theory are:

Henri Fayol (1841 -1925)

Unlike Taylor, Fayol’s concern was directed at the activities of managers in general since
management is an activity common to all humans. In pursuance of this he postulated
oridentified 14 principles which he opined are essential to increase the efficiency of the
management process.

Fayol’s concept of management is that it could be taught once the principles underlying it are
understood since managerial tasks can be identified and analysed. This implies that
managerial skills are learned just like any other. This disposition led to the overthrow of the
hitherto posture that “managers are born, not made”.

Fayol suggested fourteen principles of management that he believed are essentially

fundamental in the drive towards enhancing fficiency in the process of managing enterprises.
These principles form the foundation of contemporary management theory and practice.
Consequently, many scholars of management extol these principles and Fayol’s contribution
to the development of management as a discipline and practice. Jones and
George,WeihrichandKoontz identified these 14 principles as developed by Fayol as follows:

1. Division of Labour. This involves the separation of skill areas into functional areas based
on specialization. According to him, this will eliminate any uncertainty in the organization,
Division of labour also involves the specialization of the workforce, thereby creating specific
personal and professional development within the labour force which entails increasing
productivity and leads to increases in the efficiency of labour. By separating a small part of
work, the speed and accuracy in the workforce’s performance increases. This principle
applies to the employees at both the technical as well as managerial levels.

2. Authority and Responsibility. Henri Fayol postulated that authority and responsibility are
important, both as a result of manager’s position as well as other forms of informal authority
that emanates from personal expertise, technical knowledge, leadership abilities,etc .Fayol
opines that where there are clear division of the levels of authority and responsibility,
uncertainty inorganizations will be reduced or even eliminated entirely. This reduces
thetendency of any manager usurping another person’s authority.

3. Unity of Command. The principle of unity of command emphasises that each

organizational member should have only a single superior whom he/she reports to.

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Proponents of this concept believe that it lessens conflict, confusion, havoc within the
organizational hierarchy and creates greater feelings of personal responsibility for results or
accomplished tasks. Although, possibility of dual command exist in many because this
practise is often inevitable. The chief problem with dual command is however the difficulty
in appraising the responsibility and authority of organization managers.

4. Line of Authority. By line of authority, we are referring to the chain of command from the
top level down to the bottom of an organizational structure. The efficiency of communication
in organizations is greatly influenced by the length of the chain of command. An organization
with a flatter structure (lesser levels)will be able to disseminate information at a faster pace.
Also, its planning and controlling functions will be carried on much quicker too. This is
because there are fewer interactions which invariably mean quicker decision making too.

5. Centralization. This refers to concentrating power and authority at the top hierarchy of an
organization. Fayol opines that authority should not be so much concentrated at the top
managerial hierarchy. This is so since centralization entails only managers at the top
hierarchy are charged with the making of most decisions, particularly, important decisions.
This indicates danger as the lower level managers or subordinates have little or nothing at
stake or are not participants in decision making. However, its chief advantage is that it permit
stop hierarchy the opportunity to have a good control over the affairs of the enterprise which
means prompt and appropriate response to problems and issues within the enterprise.

6. Unity of Direction. This refers to having a single guiding plan. By this principle it means
that tasks that have the same aim need to come under a single head and a common plan as
guide. The rationale behind this principle is to be focused and avoid controversies that will
arise with organization members working at cross purposes.

7. Discipline. This refers to respect for organizational members so as to ensure reliability and
hard work which are needed to achieve organizational goals. In specific terms discipline
entails obedience, proper conduct in relation to others and respect of authority. Discipline is
virtually essential for the smooth functioning of all organizations.

8. Equity. Where subordinates are loyal and committed to their duties, it is quite normal for
top management to treat them with respect, fairness, impartiality, etc. When this occurs, the
workforce is encouraged and motivated to attain higher levels of performance.

9. Order. Here, the emphasis is on the arrangement of organizational resources–human and

material. Fayol’s concern was with orderliness that could result into efficiency and
resourcefulness in organizations. Hence, he recommended the use of organizational charts.
Order will also enhance proper career planning and development along career paths.

10. Subordination of Individual Interests to the Common Interest. The concern here is
due to the fact that there is diversity in interests of organization members. The principle is
emphasising the superiority of the interest of the organization over and above those of
individuals and groups if the organization is to survive.

11. Initiative. Initiative simply means the possibility of subordinates to exercise creativity
without direction or control from superiors. Initiative is a key ingredient in the ability to
survive in any keenly competitive environment utilising the initiative of employees can add
strength and new ideas to organizations because initiative is a source of strength for the
organization because it provides new and better ideas. Fayol opined that managers must be

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encouraged to exercise their initiative potentials. Thus, being able to strike a balance between
order and initiative is a vital managerial tool.

12. Remuneration. Fayol posited that the remuneration system which has important
implication must be fair enough to encourage efficiency and productivity. He proposed bonus
and profit sharing plans as a system of rewarding employees.

13. Stability of Tenure. Fayol argued that high labour turnover in organizations results from
poor or bad management. He therefore recommended for long term employment. He believed
this to be a factor that can bring about the development of skills that can improve
organizational sense for proper utilisation of resources. The tenure of service should not be
too short and employees should not be moved from positions frequently. Fayol argued that an
employee cannot render useful service if he is removed before he becomes accustomed to the
work assigned to him and that such removals may to a large extent lead to labour turnover.

14. Esprit De Corps. This is a French word meaning “in unity there is strength”. It
emphasises the feelings of commitment or devotion with interest to a common cause among
members of an organization or group or team. This team spirit is usually is a catalyst that
helps develop an atmosphere of mutual trust and understanding and can be used to initiate
and aid the processes of management functions.

Decision Theory Approach

This group believes in rational decision-making. They perceive management as engaged in
constant selection of courses of action from available alternatives. The group engages in the
analysis of decision from varying viewpoints – the economic rationale of the decision,
decision makers and psychological aspects of decisions and decision-making. Most of the
members of this school are economists and they tailor their analysis to include utility
maximisation, indifference curve, marginal curve and economic behaviour under uncertainty.
They have broadened the area of decision-making to include every aspect of the organization
and all the factors that influence the enterprise.

Contingency Theory
This theory is often called situational theory. It was developed when researchers tried to
apply the concepts of the major theories to real life situations. It was discovered that certain
methods were highly effective in certain settings but highly ineffective in others.
Their logical conclusion was that results differ because situations differ. An effective and
efficient manager is one who identifies which method will in a given situation, under a
particular circumstance and at a given time will best contribute to the achievement of
organizational goals.
In other words, the organizational structures and control systems that a manager chooses are
contingent on the characteristic of the external environment in which the enterprise is
operating. It follows therefore that managers may either use a mechanistic structure where the
environment is stable or an organic structure where the environment is rapidly changing.

Human Relations Approach

According to Human Relations Approach, management is the Study of behaviour of people at
work.

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This approach had its origin in a series of experiments conducted by Professor Elton Mayo
and his associates at the Harvard School of Business at the Western Electric Company’s
Hawthorne Works, near Chicago.
These studies brought out for the first time the important relationships between social factors
and productivity. Before it, productivity of the employees was considered to be a function
only of physical conditions of work and money wages paid to them. For the first time it was
realised that productivity depended largely upon the satisfaction of the employees in work
situations.
This group concentrates on the interpersonal relationship between management and workers.
This group places emphasis on the understanding of employees by management. It stresses
motivation, meeting workers needs and aspirations. The school believes that effective use of
human relationship will aid management in realizing the organizational goals. The criticism
for this school is that ittries to link management too loosely to the field of psychology and
sociology. The study of group dynamics and interpersonal relationship is not limited to
management.
Following the Hawthorne Experiments, a great deal of work has been carried on by
behavioural scientists belonging to a variety of disciplines including Psychology, Sociology,
Philosophy and Anthropology in studying the behaviour of people at work.
Those who subscribe to the Human Relations School of Thought are of the view that the
effectiveness of any organisation depends on the quality of relationships among the people
working in the organisation.
So, according to them, the managers must concern themselves with an analysis of
organisational behaviour, that is, interaction of people with the organisation. The basic as-
sumption of this school still remains that the goals of the organisation are achieved through
and with the people.
Apart from the study of formal organisation and techniques used by such organisations, this
school studies the psychological processes in the organisations, informal organisations,
conflict, change, motivation and relationships, and the various techniques of achieving
organisational development by improving the relationships among the various groups of
people constituting the organisation and its internal environment.

Principles of Human Relations Approach

The basic principles of human relations approach are:-
1. Human beings are not interested only in financial gains. They also need recognition
and appreciation.
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2. Workers are human beings. So they must be treated like human beings and not like
machines. Managers should try to understand the feelings and emotions of the
workers.
3. An organization works not only through formal relations, but also through informal
relations. Therefore, managers should encourage informal relations in the organisation
along with formal relations.
4. Workers need a high degree of job security and job satisfaction. Therefore,
management should give job security and job satisfaction to the workers.
5. Workers want good communication from the managers. Therefore, managers should
communicate effectively without feelings of ego and superiority complex.
6. In any organisation, members do not like conflicts and misunderstandings. Therefore,
managers should try to stop conflicts and misunderstandings among the members of
the organization.
7. Workers want freedom. They do not want strict supervision. Therefore, managers
should avoid strict supervision and control over the workers.
Employees would like to participate in decision making, especially, in those matters affecting
their interests. Therefore, management must encourage workers' participation in
management. This will increase productivity and job satisfaction.

Behavioural Approach:
The human relations movement focused on interpersonal relations and overlooked the wider
subject of organizational behaviour.
Organizational behaviour involves the study of attitudes, behaviour, and performance of
individuals and groups in an organizational setting. It is also known as the human resource
approach because it stresses the development of human beings for the benefit of both
individuals and the organisation.
The behavioural approach is multi-dimensional and inter-disciplinary in nature. Under it, the
knowledge is drawn from behavioural sciences, e.g. psychology, sociology, anthropology, etc
is applied to understand, explain and predict human behaviour. Therefore, this approach is
also known as the Behavioural Science Approach.
Under the behavioural science approach, the knowledge drawn from behavioural sciences is
applied to explain and predict human behaviour. It focuses on human behaviour in the
organisation. It lays emphasis on the study of motivation, leadership, communication, group
dynamics, participative management, etc.
Further, the behavioural scientists made the following propositions:
 An organisation is a socio-technical system.
 Individuals differ with regard to attitudes, perceptions and value systems. As a result,
they behave differently to different stimuli under different conditions.

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 People working in the organisation have their needs and goals which may differ from
organizational goals. Attempts should be made to achieve fusion between
organizational goals and human needs.
 A wide range of factors influences inter-personal and group behavior of people in
organisations.
The main features of the Behavioural Science Approach are as follows:
 Behavioral science is an inter-disciplinary approach and integrates the knowledge
drawn from different disciplines (psychology, sociology, anthropology, economics,
political science and history) for the study of human behaviour.
 It is an applied science with the objective to apply various researches to solve
organizational problems.
It is also a normative science which not only suggests cause and effect
relationships but also prescribes ways and means to solve organizational problems and effects
results

 It focuses attention on people from a humanistic point of view. It accepts the value of
an individual as a thinking, feeling and living organism and his needs and motivations
play important role in determining his behavior in the organisation
 It is goal-oriented. It recognizes goal conflicts in the organisation and suggests
reconciliation of goals of the individuals and the organisation for a better organisation
climate and greater organizational effectiveness
 It adopts a systems approach which takes into account all the factors affecting
organizational behavior

The sum up, the behavioral science approach gives emphasis on increasing productivity
through motivation and leadership. The central core of this approach lies in the following
aspects of human behavior: Motivation, leadership. Communication, participative
management and group dynamics The behavioral sciences have provided managers with a
systematized understanding of one of the most critical factors in the process of
management - the human element. Insights evolving from that understanding have been
used to design work situations that encourage and increase the productivity of employees.
It has enabled organizations to formulate programmes to more efficiently train workers
and managers, and it has effects in numerous other areas of practical significance.

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