Evolution of Management - Managemement Theory and Practices

Management is a process consisting of planning, organizing, staffing, controlling performed to determine and accomplish objectives by the use of people and other resources.Luther Gullic coined the word
“POSDCORB”
to suggest sevenfunctions of management.P for
“Planning”
,
“O”
for
Organizing,”
S
”
for Staffing,
“CO”
forCoordinating,
“R”
for Reporting and
“B”
for Budgeting.

1. Evolution of Management Dr. Nimisha Nandan Assistant Professor Department of Management Studies St.Aloysius College

2. Mary Parker Follett defined “ Management is the art of getting things done through people. ”

3. Characteristics of management

4. Characteristics of Management 1. Goal oriented Process: It is a goal oriented process, which is undertaken to achieve already specified and desired objectives . 2. Pervasive: Management is pervasive in nature. It is used in all types of organizations whether economic, social or political and at every level. 3. Multidimensional : It is multidimensional as it involves management of Work, People and operations. 4 . Continuous : It is a continuous process i.e. its functions are being performed by all managers simultaneously. The process of management continue till an organisation exist for attaining its objectives.

5. 5.Group Activity : It is a group activity since it involves managing and coordinating activities of different people as a team to attain the desired objectives. 6. Dynamic function : it is a dynamic function since it has to adapt to the changing environment. 7. Intangible Force : It is an intangible force as it cannot be seen but its effect are felt in the form of results like whether the objectives are met and whether people are motivated or not.

6. Management is a distinct process Management is a process consisting of planning, organizing, staffing, controlling performed to determine and accomplish objectives by the use of people and other resources. Luther Gullic coined the word “POSDCORB” to suggest seven functions of management P for “Planning” , “O” for Organizing ,” “S ” for Staffing, “CO” for Coordinating, “R” for Reporting and “B” for Budgeting.

7. Objectives of management Survival (Earning enough revenues to cover cost); Profit (To cover cost and risk ) Growth (To improve its future Prospects). Social Objectives of giving benefits to society like using environmental friendly practices and giving employment to disadvantaged sections of society etc. Personal Objectives because diverse personal objectives of people working in the organization have to be reconciled with organizational objectives.

8. Importance of management Achieving Group Goals : Management helps in achieving group goals. Manager give common direction to the individual effort in achieving the overall goal of the organization . Increases Efficiency : Management increases efficiency by using resources in the best possible manner to reduce cost and increase productivity. Creates Dynamic Organisation : Management helps in creating Dynamic organization which could adopt changing situations easily.

9. 4. Achieving Personal Objectives : Management helps in achieving objectives of individuals working in the organization. 5. Development of Society : Management helps in the development of society by producing good quality products, creating employment opportunities and adopting new technology.

10. Scope of Management Financial Management Personnel Management Materials Management Production Management Marketing Management Office Management Maintenance Management

11. Financial Management The continuous management of finances is needed at all the levels to ensure the optimum utilization of funds available with the business .. Management of finances involves following activities: Assessing financial needs Taking the investment decisions i.e. capital  budgeting decisions Budgetary control Proper utilization of funds Working capital management Ensuring fair return to the investors. Determination of dividend policy .

12. MARKETING MANAGEMENT Marketing management is the analysis, planning, implementation and control of the programs designed to create, build and maintain beneficial exchanges with target buyers for the purpose of achieving the organizational objectives . Identifying and assessing the needs of the consumer by conducting the market research. Planning and developing suitable products and services. Setting appropriate prices for products and services. Selecting channels for distribution. Selecting the modes of promotion of the products such as advertisement using different medias, publicity, maintaining public relations etc. Making the marketing strategy. Choosing appropriate marketing mix. Conducting  market surveys at regular intervals.

13. PERSONNEL MANAGEMENT Personnel management is also known as Human Resource Management. To quote Mary Parker Follet , management is the art of getting things done through others; this states that management is all about dealing with the personnel of the organization. Personnel management is the management of manpower and is basically concerned with the recruitment, selection, training and maintaining the cordial relations, which contribute maximum towards the achievement of the objectives set.

14. The personnel management involves following activities: The personnel management involves following activities: Manpower planning Recruitment of employees Selection of employees Training and development of employees Compensation , promotion and transfers of the employees Stress management of the employees Ensuring proper communication among the employees. Supervision of the employees Controlling the performance of the employees. Job evaluation. Job description.

15. OFFICE MANAGEMENT Office is the nerve centre of the business. Office is to be managed properly for the quick, better and desired results. The functions of office management involves: Maintaining and keeping the records. Developing efficient system of communication. Development of time and labor saving devices. Establishing cordial relations between all sections of an enterprise. Keeping up to date system of accounting.

16. MATERIAL MANAGEMENT Materials form a major part of any product. It is very important for every firm to keep strict control on the materials receipts, supply and use of materials. The following are the main functions of material management: Determination of requirements of materials Selection of sources of supply. Purchasing the right quantity of materials at the right time from the right place at the right time. Storage and preservation of the material. Proper material handling Inventory control. Determining material levels.

17. CUSTOMER RELATIONSHIP MANAGEMENT The art of managing the organization’s relationship with the customers and prospective clients refer to customer relationship management. It refers to the study of needs and expectations of the customers and providing them the right solution. This includes: Identification of the target market. Collecting and storing the data related to the market. Establishing proper communication channel with the customers. Analyzing the sales data. Personalizing the interaction with the customers.

18. Management as an Art Art refers to skilful and personal application of existing knowledge to achieve desired results. It can be acquired through study, observation and experience. Existence of theoretical knowledge: In every art systematic & organised study material should be available compulsorily to acquire theoretical knowledge. Personalised application: The use of basic knowledge differ from person to person and thus, art is a very personalised concept. Based on practice and creativity: Art involves the creative practice of existing theoretical knowledge.

19. Management as science Science is a systematised body of knowledge that is based on general truths which can be tested anywhere, anytime. Principles based on experiments & observation : Scientific principles are developed through experiments and observations . Universal Validity : Scientific principles have universal validity and application . Management has systematic body of knowledge and its principles are developed over a period of time based on repeated experiments & observation, which are universally applicable. As the principles of management are not as exact as the principles of pure science, so it may be called inexact science.

20. Management as a profession Profession means an occupation for which specialised knowledge and skills are required . Well defined body of knowledge: A profession must have a systematic body of knowledge that can be used for development of professionals. Every professional must make deliberate efforts to acquire expertise in the principles and techniques. Similarly a manager must have devotion and involvement to acquire expertise in the science of management.

21. Formal Education & Training - There are no. of institutes and universities to impart education & training for a profession. No one can practice a profession without going through a prescribed course. Many institutes of management have been set up for imparting education and training. N o minimum qualifications and a course of study has been prescribed for managers by law. For example, MBA may be preferred but not necessary . Professional Associations : All professions are affiliated to a professional association which regulates entry and frame code of conduct relating to the profession . For the regulation of profession, existance of a representative body is a must. For example, an institute of Charted Accountants of India establishes and administers standards of competence for the auditors but the AIMA however does not have any statuary powers to regulate the activities of managers.

22. Social Obligations - Profession is a source of livelihood but professionals are primarily motivated by the desire to serve the society. Their actions are influenced by social norms and values. Similarly a manager is responsible not only to its owners but also to the society and therefore he is expected to provide quality goods at reasonable prices to the society . Service Motive : The main aim of a profession is to serve its clients.

23. Ethical code of conduct : Members of a profession have to abide by a code of conduct which contains certain rules and regulations, norms of honesty, integrity and special ethics. A code of conduct is enforced by a representative association to ensure self discipline among its members. Any member violating the code of conduct can be punished and his membership can be withdrawn. The AIMA has prescribed a code of conduct for managers but it has no right to take legal action against any manager who violates it. Management does not fulfil all the features of a profession and thus it is not a full fledged profession

24. Functions of Management Planning , Organizing, Staffing, Directing and Controlling are the functions of management. Planning is deciding in advance what to do in future and how to do it. Organizing is to assign duties, grouping tasks, establishing authority and allocating resources required to carry out a specific plan. Staffing is finding the right people for the right job. Directing is leading, influencing and motivating employees to perform the tasks assigned to them. Controlling is monitoring the organizational performance towards the attainment of organizational goals.

25. Importance of management Management helps in achieving group goals : An organisation sets certain goals. Management aims at achieving such goals by directing the individual efforts. Management creates a dynamic organisation: With the ever changing needs and demands of the environment, an organisation needs to adopt those changes. Management helps people to adopt such changes easily, so that the organisation is able to sustain successfully in the competitive market. Management increases efficiency : With proper planning, organising, staffing directing and controlling the activities of the organisation, management increases the efficiency by producing ’. maximum output with minimum cost.

26. Management helps in achieving personal objectives : A manager motivates its subordinates in such a manner that it boosts their morale and able to achieve their personal objectives such as competitive salary, peer recognition, etc while contributing to the organisational objectives. Management helps in development of society: Management in an organisation helps the society by way of supplying quality products at reasonable price. It also contributes towards society by providing basic amenities such as schools, hospitals, dispensaries etc. Moreover, it also generates employment opportunities for the disadvantaged sections of the society.

27. Management Thought Management thought refers to the theory that guides management of people in the organization. Initially management theories were developed out of the practical experience of the managers in the industrial organization. Later, managers took inspiration from a variety of other academic disciplines, including Science, Sociology, Anthropology etc. The most significant historical point of reference in the evolution of management was the advent of the Industrial Revolution.

28. E volution of Management The evolution of management can be traced back to the days when human beings started living in groups . The period of 1700 to 1800 emphasizes the industrial revolution and the factory system highlights the industrial revolution and the importance of direction as a managerial purpose . Industrial revolution brought about a complete change in the methods of production, tools and equipment's, organization of labour and methods of raising capital. James Watt's steam engine offered more affordable power that revolutionised English trade and industry, while Adam Smith brought about the revolution in financial theory. Both served as the foundation for contemporary theories and practises of company management.

29. E valuation of Management The evaluation of management can be categorized in to different parts: Classical management Era (1880-1930 ) Neo-classical Management Era (1930-1950) Modern Management era ( 1950-onward)

30. Early Management Thought Adam Smith Smith stated that market and competition should be the controllers of economic activity and that tax policies were destructive. The specialization of labour was the basis of Smith's market system. According to Smith, division of labour provided managers with the maximum opportunity for improved output.

31. Charles Babbage (1792–1871) T he creator of the concepts behind the present day computer. R ecognized as the supporter of operations research and management science . The tools and machinery used in English manufacturers were discussed in Babbage's most well-known book, “On the Economy of Machinery and Manufacturers”. It covered the fundamentals of manufacturing's economics, examined the processes and technical know-how, and made recommendations for better procedures. Babbage supported profit sharing and believed that the division of labour had advantages. Prof Babbage, a renowned professor in mathematics at Cambridge University discovered that manufacturers were relying on guesswork and suggestions and urged them to utilize mathematics and science to be more accurate and productive. He created a factory observation technique that is still used today by consultants and operations analysts who are assessing manufacturing operations.

32. Classical Approach The classical approach is the earliest thought of management .The classical approach was associated with the ways to manage work and organizations more efficiently. The classical approach are categorized into three groups namely, scientific management, administrative management, and bureaucratic management.

33. Chester Barnard (1886-1961) Barnard stated that people join in formal organizations to accomplish such goals that cannot be fulfilled by working alone. But as they follow the organization's goals, they must also gratify their individual needs. Barnard came to the conclusion that an organisation can only operate effectively and survive when the goals of the organisation are kept in harmony with the objectives and requirements of the people who work there. Barnard refers to a theory that explains how people can establish long-lasting, mutually beneficial working partnerships.

34. Mary Parker Follett (1868-1933) Human beings grew through their relationships with others in organizations. Follett was persuaded that no one could become a whole person except as a member of a group . Follett's model was significant precursor of the idea that management meant more than just what was happening inside a particular organization. Moreover, Follett's "holistic" model of control took into account not just individuals and groups, but the effects of such environmental factors as politics, economics, and biology.

35. Management Thought Management thought refers to the theory that guides management of people in the organization. Initially management theories were developed out of the practical experience of the managers in the industrial organization . Later, managers took inspiration from a variety of other academic disciplines, including science, sociology, anthropology, etc .

36. Evolution of Management Theories The classical theory of management Scientific Management Bureaucratic Management Administrative Management Neo-classical theory Human Relations Approach Behavioural Approach Modern Approach Quantitative Approach System Approach Contingency Approach Operational Approach

37. CLASSICAL APPROACHES Basic Assumption: People Are Rational People will rationally consider the opportunities available to them and do whatever is necessary to maximize their economic gain . Money is a motivating factor.

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

39. Bureaucracy Weber emphasized the need for a firmly defined hierarchy governed by clearly defined regulations and lines of authority . He considered the perfect organization to be a bureaucracy whose activities and objectives were reasonably thought out and whose divisions of labour were clearly defined . Weber also believed that technical capability should be emphasized and that performance evaluations should be made completely on the basis of merit. Presently, it is considered that bureaucracies are huge, impersonal organizations that put impersonal competence ahead of human needs.

40. Weber’s Bureaucracy E arlier business firms were unproductively managed, with decisions based on personal relationships and faithfulness. Weber proposed that a form of organization, called a bureaucracy, characterized by division of labour, hierarchy, formalized rules, impersonality, and the selection and promotion of employees based on ability, would lead to more well-organized management.

41. Division of work: There is a high degree of specialisation or division of labour in a bureaucratic organisation. Tasks are divided into very specialised jobs and each member performs his specialized function in a predictable manner . Rules and Regulations: The rules, regulations and procedures are clearly laid down by the top administration. Hierarchy of Authority: There is a hierarchy of authority in the organisation. Each lower position is under the control of a higher one. Thus, there is a unity of command.

42. Weber's model of bureaucratic management evidently advanced the development of vast corporations such as Ford. Bureaucracy provides a rigid model of an organization. It does not account for important human elements. The features of Bureaucracy are :- Rigidity, impersonality and higher cost of controls. Anxiety due to pressure of conformity to rules and procedure. Dependence on superior. Tendency to forget ultimate goals of the organization. Bureaucratic Model is preferred where change is not anticipated or where rate of change can be predicated.

43. Criticism of bureaucracy Too much emphasis on rules and regulations. It involves a lot of paperwork. Hence lot of wastage on time and money. The employee do not like belongingness to the organization. Employees become so used to the system that they refuse to be introduced to change and other new techniques. Delay in decision making process. No importance was given to informal groups. It mostly suitable for government organizations but not suitable for business organizations.

44. Disadvantages of Bureaucracy Rigidity in Operations: Rules and regulations in a bureaucracy are often rigid and inflexible. Strict compliance with rules and regulations discourages initiative and creativity. It may also provide a cover to avoid responsibility for failures. The bureaucratic structure is not effective in turbulent or dynamic environments. It can’t undergo the change required by the fast-changing environment. Delay and Red Tape: The rules may be followed in letter and not in spirit. Thus, the rules may become a source of inefficiency leading to delays in operations. The rules may be misused by the persons concerned with the implementation of rules. Red tape and technicalities may follow as a result

45. Goal Displacement: Goal displacement may take place in a bureaucratic organisation. The bureaucrats may give priority to rules and regulations or the secondary goals and forget about the primary goals. In other words, means become the ‘ends’ and the ends or goals become the ‘means’ leading to goal displacement . Ineffective Communication: The bureaucratic structure is tall consisting of several layers of executives. Thus , communication from the top level to the lowest level will take a very long time. Lack of personal touch: Bureaucracy is based on impersonal relationships. It does not allow inter-personal relations between employees and informal groups in the organisation.

46. Scientific management Organizational productivity can be increased by enhancing the competence of production processes . Main objective was improving economic efficiency, especially labor productivity. One best way to do a job by increasing productivity and reduction of effort Develop a science for every job, including rules of motion, standardized work implements, and proper working conditions. The development of true science of management,so that the best method for performing each task could be determine. Carefully select workers with the right abilities for the job. Carefully train these workers and provide proper incentives. Provide these workers with the necessary support.

47. Scientific Management Frederick Taylor is known as the father of Scientific Management. The only way to expand productivity is to raise the efficiency of workers. He published Principals of Scientific Management in which he proposed work methods designed to boost worker productivity . Scientific management refers to the application of science to management. Scientific management means knowing exactly what you want men to do and seeing that they do it in the best and the cheapest way . According to him, maximum output is achieved through division of labour and specialization . Scientific Management concentrates on technical aspects as well as on profit and economy.

48. Scientific Management S cience , not rule of thumb : Scientific investigation should be used for taking managerial decision rather than basing decision on opinion. Harmony , not discord : Under factory system manager serve as a link between business owner and workers. Taylor emphasised complete harmony between management and workers. Cooperation and not individualism : Taylor believed that the basic interest of worker and management is the same. Complete co-operation between labour and management to achieve the best possible result.

49. 4. Maximum output, in place of restricted output. Both the management and workers should try to achieve maximum output in place of restricted output . 5. Development of workers to their fullest capacity : Right men should be engaged in the right job.

50. Key concept of Scientific management Mental Revolution S tandardization T ime, motion and fatigue study D ifferential piece rate system Functional Foreman ship

51. Scientific Management S eparation of planning and doing: Prior to Taylor, an employee used to decide how they would do their work and what tools and machinery would be required. However, Taylor distinguished between the two tasks of planning and doing, emphasising that planning should be left to experts. F unctional F oremanship : Taylor launched functional foremanship for administration and direction. Under eight-boss-scheme of functional foremanship, four persons like route clerk, instruction card clerk, time and cost clerk and disciplinarian are associated with planning function, and the remaining four speed boss, inspector, maintenance foreman, and gang boss are concerned with operating function.

52. Scientific management which is also referred to Taylorism or the Taylor system is a theory of management that evaluates and synthesizes workflows , with the aim of improving labour productivity . Universal approaches of Scientific management are developed for Efficiency of workers, Standardization of job roles/activities and Discipline - the role of managers and the business hierarchy . conventional rules of thumb are substituted by accurate procedures developed after careful study of an individual at work . Many big and victorious organizations, such as McDonalds hamburger chain or call centres, utilised a modern version of scientific management.

53. Functional foremanship is an extension of the principle of ‘Division of work and specialisation’ to the shop floor level of a factory . It is a technique which aims to improve the quality of supervision on the shop floor by putting workers under eight specialist foremen. In this technique, planning is separated from execution so that the foremen under ‘planning incharge ’ may concentrate on planning the job of workers, and the foremen under ‘production incharge ’ may involve themselves in the execution of jobs .

54. Standardisation Standardisation is the process of setting standards for every business activity, process, raw materials, time machinery, and methods, to achieve efficiency . The process of defining and applying the “conditions” to ensure that a given range of requirements can normally be met with a minimum of variety and in reproducible and economic manner on the basis of the best techniques. It implies the physical attitude of products should be such that it meets the requirements and needs of the customers. Standardization is a means for achieving economics of production. Taylor advocated that tools and equipment's as well as working conditions should be standardized to achieve standard output from workers.

55. Differential Piece-rate System In order to encourage workers to give better performance, Taylor introduced differential piece-rate system. According to Taylor, the wage should be based on individual performance and on the position which a worker occupies . It is a technique which differentiates between efficient and less efficient workers . It rewards efficient workers and motivates the less efficient ones to improve their efficiency. In this wage system, there are two-piece rates – one for those workers who produce the standard output or more, and the other for those who produce less than the standard output.

56. Mental Revolution Scientific management involves a complete mental change of employees towards their work, toward their fellow-men and toward their employers. Mental revolution is also necessary on the part of management's side, the foreman, the superintendent, the owners and board of directions.

57. Time Study It determines the standard time taken to perform a well-defined job . Time measuring devices (e.g.., stopwatch) are used for each element of the task. The standard time is fixed for the whole task by taking several readings/observations . Time study measures how long it takes an average worker to complete a task at a normal pace . The objective of the time study is to determine the number of workers to be employed, frame suitable incentives schemes and determine labour costs.

58. Method Study Taylor suggested that management should find out ‘one best way’ to perform the task. The objective of the Method study is to find out the best way of doing a job so as to minimise the cost of production and maximise the quality and satisfaction of the customer.

59. Motion Study Motion study refers to the study of movements like lifting, putting objects, sitting, changing positions, etc. which are undertaken while doing a typical job . Motion Study: Motion study refers to an in-depth study of the movements of a worker while doing a task. The objective of motion study is to eliminate unproductive movements in doing a task to achieve efficiency and reduce the time required to do the task. The objective/aim of the motion study is to eliminate the unproductive or unnecessary motions/movements so that it takes less time to complete the job efficiently. Motion study is designed to determine the best way to complete a repetitive job.

60. Benefit of motion study Immediate elimination of non-value added activities Motion and time study can reduce and control costs, improve working conditions and environment, and motivate people. Time and motion study develop efficient and effective work methods ,establish time standards ,balance assembly lines, estimate labour costs, develop effective tooling, select proper equipment, and layout manufacturing facilities.

61. The objective of the Time and Motion study is to determine a “normal” or average time for a job, by using observers to record exactly how much time is being devoted to each task. Problem: Observers are not always competent or proficient in the job being observed.

62. Frank Gilbreth Frank Gilbreth is regarded as the father of motion study. He is responsible for inculcating in the minds of managers the questioning frame of mind and the search for a better way of doing things . Gilbreth also devised methods for avoiding wasteful and unproductive movements. He laid down how workers should stand, how his hands should move and so on . The one best way of doing a job is the way which involves the fewest motions performed in an accessible area and in the most comfortable position. The best way can be found out by the elimination of inefficient and wasteful motions involved in the work.

63. Work Study  Work-study helps the company to increase its productivity. Work-study is a combination of tools and techniques used to analyze that how work will be executed. It ensures that all the factors of production utilize in an effective manner. Work-study deals with the human being and their handling of other factors of production of the company. Work-study involves analyzing and evaluating the best method of doing the work and then develop a standard for performing the job. It helps in diving the work into small parts and then tries to complete the work in the shortest time with maintaining the quality of the product. It will increase the productivity of the company.

64. Fatigue Study Fatigue study helps in reducing fatigue among the workers. Fatigue , physical or mental, has an adverse effect on workers’ health and efficiency. The objective of the fatigue study is to determine the amount and frequency of rest intervals in completing a task Fatigue study seeks to find out the amount and frequency of rest intervals to be given to workers in completing a task. This would help the worker to regain his stamina and work with the same efficiency again

65. Scientific management has been criticised on the following grounds Mechanistic Approach: The main criticism is that scientific management ignores the human element in production and is devoid of human touch. It treats workers as factors of production and not as human beings. Too much emphasis is placed on technical aspects of work ignoring the human side.

66. Narrow View: Scientific Management is quite limited in scope. Taylor focused completely on efficiency on the shop floor. As consequence management became the study of shop management while the more general aspects were overlooked. Scientific management has thus been described as a theory of industrial engineering. It does not deal with the management of the total organisation. I mpractical : Many ideas of Taylor are said to be infeasible in practice. For example, planning cannot fully be separated from doing because these are two sides of the same job and are not different jobs. Similarly, functional foremanship is likely to create problems because it violates the principle of unity of command.

67. Unrealistic Assumptions: Scientific management is based on the assumption that people are rational and motivated by material gains. Taylor and his associates concentrated on the physical and economic needs of people. Workers also want job satisfaction, participation and recognition.

68. Henry Fayol's Administrative Management (1841–1925 ) Henry F ayol is known as the father of modern Management . He used the word Administration for Management. Fayol categorized activities of business enterprise into six groups such as Technical, Financial, Accounting, Security, and Administrative or Managerial . He stressed constantly that these managerial functions are the same at every level of an organization and is common to all firms. He wrote General and Industrial Management. His five function of managers were plan, organize, command, co-ordinate, and control.

69. Administrative Management Administrative Management emphasizes the manager and the functions of management . In contradiction of scientific management, which deals mainly with jobs and work at individual level of scrutiny, administrative management gives a more universal theory of management.

70. Principal of administrative management These 14 principles of management serve as general guidelines to the management process and management practice . Division of work : According to this principle, the whole work must be divided into small units and instead of assigning the whole work to one person, unit of work should be assigned to one person according to the capability, qualification and experience of the person. When a person is performing a part of job again and again, he will become perfect and specialized in doing that and the efficiency level will improve. Fayol advocates that this principle will be applicable in all types of jobs such as technical, managerial and skilled.

71. Authority and responsibility: Authority means Right to command or power to take decision . Responsibility means obligation to complete the job assigned on time. Giving authority without fixing responsibility may lead to misuse of authority. At the same time, responsibility without adequate authority will make the subordinate ineffective Fayol suggested that there should be a balance between authority and responsibility.

72. Discipline Discipline denotes " respect for agreements which are directed at achieving obedience, application, energy and the outward marks of respect ". Discipline is the obedience to organisational rules and employment agreements, which are necessary for the working of the organisation. According to Fayol , discipline requires: Good superiors at all levels, Clear and fair agreements, and Judicious application of penalties

73. Unity of command This is the principle that an employee should receive orders from one superior only . According to Fayol, an employee should receive orders and instructions from one boss only because if they are receiving orders from more than one boss then they will get confused and will not be able to understand that whose orders must be executed first. Further, they will get a chance of excuse by saying that they were busy in executing the orders of other boss.

74. Unity of direction All the units of an organisation should be moving towards the same objectives through coordinated and focused efforts. Each group of activities having the same objective must have one head and one plan . This ensures unity of action and coordination.

75. Subordination of individual interest to general interest In any group the interest of the group should supersede that of the individual. When these are found to differ, it is the function of management to reconcile them . This is so because larger interests of various stakeholders, i.e., workers, owners, shareholders, creditors, customers and society cannot be sacrificed for one individual or a small group of individuals who want to exert pressure on the company. According to this principle, the interests of the organisation should take priority over the interests of any one individual employee.

76. Remuneration of personnel Fayol recognizes that salary and methods of payment should be fair and give the utmost satisfaction to worker and boss . Remuneration of employees should be just and equitable so as to give maximum satisfaction to both employees and the organisation. The fair wages is determined according to the following keeping in mind the minimum wage act of govt. The wages and salaries paid by the competitors Financial capacity of the concern This will ensure good relations between workers and management. Consequently, the working of the company would be smooth.

77. Centralization Centralization refers to concentration of authority of power in few hands at top level . Decentralisation refers evenly distribution of power at every level of management. Fayol says that an organisation should have a balance between complete centralisation and decentralisation . For example, the major decisions like setting up of goals, plans, policies and strategies can be centralised; but there can be a policy of decentralisation for the activities of routine work such as the purchase of raw materials, assignment of targets to workers, etc. An organisation can never be completely centralised or completely decentralised. As an organisation grows in size and complexity, there is a tendency to move towards decentralised decision-making. This is because , in large organisations, employees are more directly and closely involved with the business operations than the top management.

78. Scalar chain An organisation consists of superiors and subordinates. The formal lines of authority from highest to lowest ranks are known as the ‘Scalar Chain’. According to Fayol, ‘organisations should have a chain of authority and communication that runs from top to bottom and should be followed by managers and the subordinates .’ Fayol , insists that this chain must be chain means followed strictly and every communication must pass through every key of this chain. No skipping of any one key should be allowed.

79. According to Fayol , this chain should be violated in the normal course of formal communication. However, if there is an emergency then ‘F’ can directly contact ‘P’ through ‘Gang Plank’. There is a shorter route that has been provided so that communication is not delayed in case of an emergency.

80. Order Breaking this principle into 'Material order' and 'Social Order ', Fayol thinks of it as the simple edge of " a place for everything (everyone), and everything (everyone) in its place ". This is basically a principle of organization in the arrangement of things and persons . Order refers to orderly arrangement of men and materials. People and materials must be in suitable places at appropriate time. Like that every employee should be always available at allotted place or cabin. This principle ensures that wastage of time will be avoided in search of any material or any person so that smooth and systematic working in organisation will be achieved.

81. Equity Equity refers to kind, fair and equal treatment to employees. There should not be any discrimination on the basis of sex, religion, language, caste, belief, nationality etc . Employees will work with loyalty and devotion only when they are treated with equal justice.

82. Stability of tenure of personnel According to this principle, employees should not be transferred frequently without any proper reason. Because it takes some time to a person to learn and get settled on a job. Before they gets settled, if they are transferred , then they will not be able to contribute their best for organisation . Further the management must provide the feeling of job security among the employees. Because, with the feeling of insecurity, employees cannot contribute their maximum . According to Fayol, the employee turnover should be minimized to maintain organisational efficiency by way of avoiding frequent transfer and feeling of insecurity.

83. Initiative Initiative means eagerness to initiate action without being asked to do so. In other words, it means taking the first step with self-motivation . Fayol suggested that employees in the organisation must be encouraged to take some initiative in making and executing plan by way of welcoming suggestions, ideas and opinions of employees. Suggestions which result in substantial cost or time reduction should be rewarded.

84. Esprit de corps Esprit de corps means “Union is Strength ”. Management should promote a team spirit and harmony among employees . A manager should replace “I” with “WE” in all their conversations . Management must develop a feeling of belongingness among the employees as they must feel themselves as members of organization’s team and not as individuals .

85. Critical Evaluation of Fayol’s principle Vague : Some of the concepts have not been properly defined. For example, the principle of division of work does not tell how the task should be divided. Again, to say that an organisation needs coordination is merely to state the obvious. In the words of Herbert Simon, “administrative theory suffers from superficially , over simplification and lack of realism ”.

86. Inconsistency: Principles of the administrative theory were based on personal experience and limited observations . They are generalizations and lack empirical evidence. They have not been verified under controlled scientific conditions. Some of them are contradictory. For example, the unity of command principle is incompatible with the division of work. The theory does not provide guidance as to which principle should be given precedence over the other .

87. Pro-management bias: Administrative theory does not pay adequate attention to workers. Workers are treated as biological machines or inert instruments in the work process. Historical value: Fayol’s theory was relevant when organizations operated in a stable and predictable environment . It seems less appropriate in the turbulent environment of today. For example, present-day managers cannot depend entirely on formal authority and must use persuasion to get the work done. Similarly , the theory views organizations as power centres and does not recognize the role of a democratic form of organization

88. Technical Competence: Selection and promotion of jobholders are based on their technical competence . Qualifications are prescribed for each job/position. Special training is given to provide knowledge of rules and administrative processes. Record Keeping: Every decision and action is recorded in a wide array of written documents and preserved in its original as well as draft form. The official records serve as the memory of the organization and make it independent of the individuals . Impersonal Relations: A notable feature of bureaucracy is that relationships among individuals are governed through the system of official authority and rules. Official positions are free from personal involvement, emotions, and sentiments. Thus, decisions are governed by rational factors rather than personal factors. This impersonality concept is used in dealing with organizational relations as well as relations between organizations and outsiders.

89. Neo classical theory Human factors are regarded as the most important elements in the organization. Focus was on “Man behind the machine”. R eferred to as human relations of thoughts. The basic assumption of this theory is that the physiological and social aspects of a worker as an individual and his workgroup ought to be focused on . Business Organizations are identified as a social system. The theory revealed the importance of social and psychological factors in determining the worker's productivity and satisfaction. The management aims to develop social and leadership skills along with technical skills. It must be done for the welfare of the workers and the organization. Morale and productivity work together in an organization.

90. Human Relations Approach The human rationalists which is also denotes to neo-classicists, focused as human aspect of business. These theorists emphasize that organization is a social system and the human factor is the most vital element within it. The human relations approach implies modifications in the structure of the organization itself, in the nature of work, and in the association between manager and assistant. Each of these changes depends upon assumptions about the individual, the organization, and communication, just like any other theory of organizations.

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

92. Behavioural Science The behavioural science approach was a natural development of the human relations movement. It concentrated on applying conceptual and analytical tools to the problem of understanding and foresees behaviour in the place of work. The behavioural science approach has contributed to the study of management through its elements of personality, attitudes, values, motivation, group behaviour, leadership, communication, and conflict, among other issues.

93. Hawthorne Studies Elton Mayo and others conducted experiments that was known as Hawthorne experiments and explored informal groupings, informal relationships, patterns of communication, and patterns of internal leadership. Elton Mayo is usually popular as father of Human Relations School. The Hawthorne experiment consists of four parts. These parts are briefly described below:- Illumination Experiment. Relay Assembly Test Room Experiment. Interviewing Programme. Bank Wiring Test Room Experiment . These studies were conducted to determine the effect of better physical facilities on worker’s output.

94. Illumination Experiment: This experiment was conducted to establish relationship between output and illumination. When the intensity of light was increased, the output also increased. The output showed an upward trend even when the illumination was gradually brought down to the normal level. Therefore, it was concluded that there is no consistent relationship between output of workers and illumination in the factory. There must be some other factor which affected productivity.

95. Relay Assembly Test Room Experiment: This phase aimed at knowing not only the impact of illumination on production but also other factors like length of the working day, rest hours, and other physical conditions. In this experiment, a small homogeneous work-group of six girls was constituted. These girls were friendly to each other and were asked to work in a very informal atmosphere under the supervision of a researcher. Productivity and morale increased considerably during the period of the experiment. Productivity went on increasing and stabilized at a high level even when all the improvements were taken away and the pre-test conditions were reintroduced. The researchers concluded that socio-psychological factors such as feeling of being important, recognition, attention, participation , cohesive work-group, and non-directive supervision held the key for higher productivity .

96. Mass Interview Programme: The objective of this programme was to make a systematic study of the employees' attitudes which would reveal the meaning which their "working situation" has for them. The researchers interviewed a large number of workers with regard to their opinions on work, working conditions and supervision. Initially, a direct approach was used whereby interviews asked questions considered important by managers and researchers. The researchers observed that the replies of the workmen were guarded. Therefore, this approach was replaced by an indirect technique, where the interviewer simply listened to what the workmen had to say. The findings confirmed the importance of social factors at work in the total work environment.

97. Bank Wiring Test Room Experiment: This experiment was conducted by Roethlisberger and Dickson with a view to develop a new method of observation and obtaining more exact information about social groups within a company and also finding out the causes which restrict output. The experiment was conducted to study a group of workers under conditions which were as close as possible to normal. This group comprised of 14 workers. After the experiment, the production records of this group were compared with their earlier production records. It was observed that the group evolved its own production norms for each individual worker, which was made lower than those set by the management. Because of this, workers would produce only that much, thereby defeating the incentive system. Those workers who tried to produce more than the group norms were isolated, harassed or punished by the group. The findings of the study are:- Each individual was restricting output. The group had its own "unofficial" standards of performance. Individual output remained fairly constant over a period of time. Informal groups play an important role in the working of an organization.

98. Contributions of the Hawthorne Experiment A business organization is basically a social system. It is not just a techno-economic system. The employer can be motivated by psychological and social wants because his behaviour is also influenced by feelings, emotions and attitudes. Thus economic incentives are not the only method to motivate people. Management must learn to develop co-operative attitudes and not rely merely on command. Participation becomes an important instrument in human relations movement. In order to achieve participation, effective two-way communication network is essential. Productivity is linked with employee satisfaction in any business organization. Therefore management must take greater interest in employee satisfaction. Group psychology plays an important role in any business organization. We must therefore rely more on informal group effort .

99. Maslow's theory Maslow’s theory is recognized as Hierarchy of Needs. It is illustrated in a pyramid. I mportance of human's psychological and physical needs. It can be used in business by managers to better understand employee motivation . Maslow's hierarchy include physiological needs (food and clothing), safety needs (job security), social needs (friendship), self-esteem, and self-fulfilment or actualisation. Maslow's Hierarchy of Needs relates to organizational theory and behaviour because it explores a worker's motivation.

100. In the organizational situation, if an employee's lower need on the hierarchy is not met, then the higher ones are ignored. For example, if employees are worried that they will be fired, and have no job security, they will be concerned about friendship and respect . Some people are prepared to work just for money, because of friends, or the fact that they are respected by others and recognized for their good work. In the organizational situation, if an employee's lower need on the hierarchy is not met, then the higher ones are ignored. For example, if employees are worried that they will be fired, and have no job security, they will be concerned about friendship and respect . Money is an encouraging element but not the only motivator of human behaviour. Man is diversely motivated and socio psychological factors act as important motivators.

101. The final level of psychological development that can be achieved when all basic and mental needs are fulfilled and the "actualization" of the full personal potential takes place.

102. Douglas McGregor theory of X and Y T here is need to motivate employees through authoritative direction and employee self-control . Theory X is a management theory focused more on classical management theory and assumes that workforce need a high amount of supervision because they are inherently lazy. It presupposes that managers need to motivate through coercion and punishment. Theory Y is a management theory that assumes employees are determined, self-motivated, exercise self-control, and generally enjoy mental and physical work duties.

103. The theory that employees are capable of being ambitious and self-motivated under suitable conditions, contrasted with Theory X. Theory Y is in line with behavioural management theories. Theory X and Theory Y relates to Maslow's hierarchy of needs in how human behaviour and motivation is the main priority in the workplace in order to maximize output.

104. Two factor theory A subset of Maslow’s hierarchy theory A ccording to Herzberg, the opposite of satisfaction is “No satisfaction” and opposite of dissatisfaction is “no dissatisfaction”. Hygiene factors : Hygiene factors are those which decrease job satisfaction. Hygiene factors are extrinsic to the job, and function in “the need to avoid unpleasantness”. Motivating Factors : T hose factors which are related to job

105. Modern Approach Assumption : People are complex . A focus on total systems and contingency thinking, and an awareness of global developments in management. Modern Approaches to management respect the Classical, Human Resources, and Quantitative schools. But they recognize that no one approach applies universally in all situations, or the exclusion of the others . Focuses on the development of each factor of workers and organization.

106. Rensis Likert’s Management System Trust Motivation Ambition System 1 Exploitative Authoritative No trust Fear ,threats and punishments Little interaction, always mistrust System 2 Benevolent Authoritative Master / Servant Rewards and punishment Little interaction, always caution System 3 Consultative Substantial but incomplete trust Rewards, punishment, some involvement Moderate interaction, some trust System 4 Participative-democratic Complete trust Goals based on participation and improvement Extensive interaction, friendly, high trust

107. Lyndall Fowners Urwick POSDCORB was developed by Gulick and Urwick . Urwick integrated Fayol’s 14 principles, Taylor’s management principle and the ideas of Follet to form his 29 Principles There is too much duplications on URWICK’s principle He proposed 6 principles of management. Principles of investigation, principles of objective, principles of organization, principles of direction, principles of experiment and principles of control.

108. Peter . F.Drucker’s Contribution Drucker introduced the idea of decentralization. Drucker was against of bureaucratic management and was in favour of federalism. It refers to centralised control in a decentralised structure. He coined the term “Management by objectives” which says an equilibrium is required to be achieved between the objectives of employees and the objectives of the organization.

109. Contingency Approach This approach of management thought focuses on management principles and concepts that have no general and universal application under all conditions . Theorists stated that there is not effective way of doing things under all business conditions. Methods and techniques which are extremely effective in one situation may not give the same results in another situation . Contingency Approaches to management assert that there is no one best way to manage, and that what is best depends in any given circumstance on the nature of the situation. In short, Contingency approach depends upon the situation.

110. Rensis Likert His principles based on four System such as supportive relationships between organizational members, multiple overlapping structures, with groups consisting of superiors and their subordinates, group problem solving by consensus within groups and overlapping memberships between groups by members who serve as linking pins.

111. The contingency approach is associated with applying management principles and processes as dictated by the sole characteristics of each situation. It depends on various situational factors, such as the external environment, technology, organizational characteristics, characteristics of the manager, and characteristics of the subordinates. Contingency theorists often implicitly or explicitly disapprove the classical approach as it focuses on the universality of management principles.

112. Quantitative Approach of Management Thought Mathematical approaches to management problems The use of quantitative techniques to improve decision making by applying statistics, optimization models, information models, computer simulations. Also called Management Science and Operations Research Uses mathematical models such as PERT, CPM, games theory, probability sampling to solve organizational problems.

113. Quantitative Approaches Applied mathematics can solve management problems. Techniques and Applications Mathematical forecasting Linear programming Inventory modelling Network models Queuing theory Simulation

114. S ystems approach System is any set of distinct parts that interact to form a complex whole. The organization is seen as a collection of interrelated parts that function together to achieve a common purpose. A system must have some specific components , units or sub units. System theory treats an organization as either an open or closed system. A closed system is not affected by its environment while an open system is.

115. Feedback loops provide information to the organization by connecting the outputs to its inputs. An organization is also a system with parts such as employees, assets, products, resources, and information that form a complex system. The systems approach deals with the thoroughly understanding the organization as an open system that converts inputs into outputs . Input resources are equipment, natural resources and the work of employees.