Principles of Management note note notenote

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1. Principles of management

2. INTRODUCTION Every organization uses four kinds of resources i.e., Human, Financial, Physical, and Information, and management is all about achieving organizational goals using these resources effectively. The people who perform these functions are known as “managers” and collectively it is called “management”. The significance of management can be well realized by imagining a situation in which an organization has all the resources that it requires but no management In such a case, there will be a waste of resources and confusion, as nobody would know what to do. It is the management, that guides and controls the activities of human resources for the attainment of organizational goals.

3. Management is the process of getting things done with the aim of achieving goals effectively and efficiently. Management is universal in the modern industrial world and there is no substitute for good management. It makes human effects more productive and brings better technology, products, and services to our society. It is a crucial economic resource and a life-giving element in business. Without proper management, the resources of production ( men, machines and materials, money ) can not be converted into production.

4. MEANING OF MANAGEMENT : Management is the art of maximizing efficiency, as a social process, a method of getting things done through others a plan of action, and its direction by a cooperative group moving towards a common goal. Effective utilization of available resources to achieve the same objective is management. Management is a comprehensive function of Planning, Organising , Forecasting Coordinating, Leading, Controlling, and Motivating the efforts of others to achieve specific objectives. Management can precisely be called the rule–making and rule–enforcing body.

5. DEFINITIONS OF MANAGEMENT: According to Peter F. Drucker, “ A Multipurpose organ that manages a business and manages managers and manages workers and works’. According to Taylor:- “Management is the art of knowing what you want to do and then seeing that it is done in the best and cheapest way.” According to Henry Fayol:-“To manage is to forecast and to plan, to organize, to co-ordinate and to control.” According to Lawrence:-“Management is the accomplishment of results through the efforts of other people.” According to Harold Koontz, “ Management is the art of getting things done through and with formally organized groups “.

6. NATURE OF MANAGEMENT Management is an activity Management is a purposeful activity. Management is concerned with the efforts of a group Management applies economic principles. Management involves decision-making. Management is getting things done through others. Management is an integrating process. Management coordinates all activities and resources. Management is a universal activity. Management is dynamic, not rigid.

7. CHARACTERISTICS OF MANAGEMENT 1. Management is universal The principles and techniques of management have universal applications. They are not rigid. They can be modified and applied in different situations. 2. Management is goal-oriented The basic goal of management is to ensure efficiency & economy in the utilization of human, physical & financial resources. Managerial success is measured by the extent to which the objectives are achieved. Thus management is purposeful.

8. 3.Management is an intangible force Management is an unseen force that cannot be seen but its presence can be felt in the form of results, targets achieved according to plans, satisfied employees & orderliness in the organization. 4. Management is pervasive Management is an essential element of every organised activity irrespective of the size or type of organization i.e. Government, business, sports, university or hospital. It is also prevalent in all the levels of the organisation , and in all the departments.

9. 5. Management is a continuous process Management functions are continuous & never-ending. These functions are simultaneously performed by all managers all the time i.e. planning, organizing, staffing, directing & controlling. 6. Management is a dynamic function Management is a dynamic function as it has to adopt the changes according to the needs of the environment and growth of the business. 7. Management is multi-dimensional – It is multidimensional as it involves management of work, people and operations.

10. FUNCTIONS OF MANAGEMENT

11. 1. Planning:  Planning means deciding in advance what to do, how to do, when to do, and who is going to do it. In simple terms, planning means setting up goals, deciding the course of action, timeline of the work, etc., in advance for the success and growth of an organization. It is the first step in the process of management, and every other function of business management depends upon the planning function. For effective planning, an organisation has to analyze the external and internal environment, formulate plans, forecast the future, and decision-making process.  Eg:   setting up the sales target for the organization, formulating rules and regulations for the employees and the firm, etc.

12. 2. Organising : It involves assigning duties, grouping different tasks, and establishing authority and responsibility. Proper organizing in an organisation ensures its success by providing the course of action. According to the nature of the work of an organisation , different firms require different kinds of organisational structures. In simple terms, organising means dividing a whole task into small units of work, and then distributing them along with authority and responsibility. Eg:, the top managers of an organisation can allot different tasks to different departments of the organisation. The department heads can then allot the sub-units of the task to different employees based on their designation, qualification, expertise and skills.

13. 3. Staffing: Staffing means recruiting the right person for the right job and at the right time. The staffing process of business management involves recruitment, selection, development, appointment, and training of employees in an organization. The human resource department of an organization deals with staffing by ensuring that the employee selected for a specific job position has the right qualifications, skills, experience, expertise, and abilities. Eg: In an Ed-tech organization, the human resource department can look for educational qualifications, like graduation and post-graduation, and skills like communication, decision-making, problem-solving, and experience for the development of commerce courses as per the requirement of the job position.

14. 4. Directing: The work of an organization does not end at staffing. The organization has to guide, supervise, direct, inspire, motivate, and instruct the recruited employees. It is a process of directing includes taking the required steps to supervise, direct, and motivate employees to achieve the organisational goals, along with their personal objectives. A good leader must use criticism and compliments in such a way that it motivates the employees to work up to their full potential. Eg: Middle-level management can use positive reinforcement or negative reinforcement to motivate the employees in working towards the fulfilment of organisational goals accordingly.

15. 5. Controlling: It means deciding the standards of organizational performance in advance, measuring the actual results, comparing the standard and actual performance, finding variations, and taking required corrective measures. Controlling is a continuous process as an organisation has to perform the process until it reaches the desired goals. Eg: an organization has set the standard sales as 50,000 units. However, the actual sales of the organization are 40,000 units. The variation in the actual and standard performance is 10,000 units. Now, the managers will look for the reasons behind the lack of 10,000 more units and then take corrective actions to attain standard sales.

16. SCOPE OF MANAGEMENT Clearly defined responsibilities, concepts, theories and principles related to managerial functions define the scope of management. Financial Management Marketing Management Personnel Management Production Management Office Management Material Management Customer Relationship Management

17. A) FINANCIAL MANAGEMENT Every enterprise prioritizes financial management because finances can get extremely tricky if not managed properly. Effective financial management ensures there are fair returns to stakeholders, proper estimation of capital requirements, and laying down optimal capital. Management of finances involves the following activities : Assessing financial needs Determining the sources of raising funds Taking the investment decisions i.e. capital  budgeting decisions Determination of the optimum capital structure Budgetary control

18. Proper utilization of funds Ensuring fair returns to the investors. Coordinating the various department’s financial needs. Preparation of analysis and interpretation of the financial statements. Negotiating for outside financing.

19. b) MARKETING MANAGEMENT The scope of management in marketing extends to planning, organizing, directing and controlling activities in the marketing department. Identifying customer requirements is crucial for providing business solutions. When a manager is fully aware of the benefits of the products and/or services the organization provides, they achieve better results. Marketing management ensures that available resources are properly utilized and the best possible outcomes are achieved.

20. Marketing management consists of the following activities: Identifying and assessing the needs of the consumer by conducting 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 media, publicity, maintaining public relations, etc. Making the marketing strategy. Choosing an appropriate marketing mix. Conducting market surveys at regular intervals.

21. c) PERSONNEL MANAGEMENT Personnel management—as the name suggests—deals with personnel or individuals in a business environment. It includes the recruitment, transfer, termination, welfare and social security of employees. This aspect of management is extremely important as employees form teams and teams drive an organization’s goals. Individual productivity also contributes to overall efficiency.

22. Personnel management involves the following activities: Manpower planning Recruitment of employees Selection of employees Training and development of employees Orientation of employees Compensation, promotion, and transfers of the employees Motivation of the employees Stress management of the employees Ensuring proper communication among the employees. Supervision the employees Ensuring health, welfare, and safety measures adopted for the employees. Controlling the performance of the employees.

23. d) PRODUCTION MANAGEMENT This type of management refers to the process of creating utilities. When you convert raw materials to finished products and oversee the planning and regulation, you’re engaging in production management. Without production, there isn’t any finished good or service and without it, organizations can’t generate interest or profits. The final product must fulfill customer requirements. The process includes quality control, research and development, plan layout and simplification.

24. e) OFFICE MANAGEMENT This includes controlling and coordinating all office activities to achieve an organization’s goals and targets. For example, an administration’s efficiency impacts a business significantly. The more organized the departments and responsibilities are, the more effective an organization is. The functions of office management involve: Maintaining and keeping records. Developing efficient system of communication. Establishing cordial relations between all sections of an enterprise. Keeping an up-to-date system of accounting.

25.  f) MATERIAL MANAGEMENT Materials form a major part of any product. It is very important for every firm to keep strict control of 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.

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

27. Management – As a Science Science is a systematic body of knowledge relating to a specific field of study that contains general facts which explains a phenomenon It establishes cause and effect relationship between two or more variables and underlines the principles governing their relationship These principles are developed through scientific method of observation and verification through testing.

28. Universally accepted principles: Scientific principles represent basic truth about a particular field of enquiry These principles may be applied in all situations, at all time & at all places

29. Experimentation and observation Scientific principles are derived through scientific investigations & researching i.e., they are based on logic Management principles are also based on scientific enquiry and observation They have been developed through experiments and practical experiences of large number of managers. Example: The principle that earth revolves the sun has been scientifically proved It is observed that fair remuneration to personal helps creating a satisfied work force.

30. Cause and effect relationship: When metals are heated, they are expanded. The cause is heating and the result is expansion. Similarly if workers are given bonuses fair wages they will work hard but when not treated in fair manner, reduces productivity of organisation.

31. Test of validity and predictability: Validity of scientific principles cab be tested at any time or any number of times i.e., they stand the time of test. More future events can be predicted with reasonable accuracy by using scientific principles. Examples: The chemical combination of Hydrogen and Oxygen will give water. Similarly principle of Unity of command can be tested by comparing two persons- one having single boss and one having two bosses, the performance of first person is better than second.

32. Conclusion: The reason for the in exactness of science of management is that it deals human beings and it is very difficult to predict their behaviour accurately. Since it is a social process, therefore it falls in the area of Social Sciences. Ernest Dale has called it as a Soft Science.

33. MANAGEMENT – AS AN ART An art requires the qualities : practical knowledge, personal skill, creativity, perfection through practice, goal oriented.

34. Practical knowledge: Every art requires practical knowledge therefore learning of theory is not sufficient It is very important to know practical application of theoretical principles Example: A Manager can never be successful just by obtaining degree in management; he must have also know to apply various principles in real situations by functioning a capacity of manager.

35. Personal Skill: Although theoretical base may be same for ever artist, but each one has his own style and approach towards his job. That is why the level of success and quality of performance differs from one person to another. Example: Several qualified exist but M.F Hussain is recognised for his style. Similar in case of manager.

36. Creativity: Every artist has an element of creativity in line. Management is also creative in nature like any other art. It combines human and non-human resources in an useful way so as to achieve desired results.

37. Perfection through practice: Practice makes a man perfect. Every artist becomes more and more proficient through constant practices Similarly managers learn through an art of trial and error initially but application of management principles over the years makes then perfect in the job of managing.

38. Goal Oriented: Every art is result oriented as it seeks to achieve concrete results In the same manner, management is also directed towards accomplishment of pre-determined goals Managers use various resources like men, money, material, machinery & methods to help in the growth of an organisation.

39. MANAGEMENT- AN ART AS WELL SCIENCE. It is considered as a science because it has an organised body of knowledge which contains certain universal truth. It is an art because managing requires certain skills which are personal of managers . Science teaches to “know ” and art teaches to “do”. A manager to be successful in his profession must acquire the knowledge of science an the art of applying it.

40. MANAGEMENT IS A PROFESSION Profession is an occupation carried by professionals like doctor, lawyer, architect, chartered accountant, cost accountant etc. It involves knowledge and application of it. Management as a profession is modern concept different from traditional one.

41. Characteristics of a profession :- 1. Systematic body of knowledge:- Professionals require expert knowledge in a particular discipline. E.g. a doctor requires knowledge of medicine; Chartered Accountant needs to have knowledge of Income Tax. 2. Formal Education:- A true professional needs to have formal education from the institution. E.g. Lawyer needs degree of law.

42. 3. Social Responsibility:- The professional are socially responsible while handling their tasks and responsibilities. Their aim should not be only profit maximization, but they have to follow certain rules for social responsibilities. 4. Independent Office:- Normally professionals practice from their independent office. 5. Specialization:- The professionals may specialize in a particular field. E.g. heart specialist, child specialist and ENT surgeon.

43. 6. Fees:- The professionals required license or a permission to practice. E.g. a doctor requires license to practice as a medical practitioner. The modern concept of management has developed as a profession because:- 1. Organization is a systematic body of knowledge. 2. Formal methods of acquiring knowledge and skill with the help of different institution. 3. Rise in professional management consultant. 4. Need for honesty.

44. 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 nonprofit 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. 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.

45. SIGNIFICANCE / ADVANATGES / IMPORTANCE OF MANAGEMENT 1] Management is goal oriented:- Management is concerned with achievement of specific goals. It is always directed towards the achievement of objectives. The success of management is measured by the extent to which objectives are achieved. 2] Management is associated with group efforts:- The business comes into existence with certain objectives that are to be Achieved by a group and not by one person alone. Management gets things done by, with, and through the efforts of group members. It coordinates its members' activities and actions towards a common goal.

46. 3) Management is intangible:- It is an unseen force, its presence can be evidence by the result of its efforts up to date order but they generally remain unnoticed, Whereas mismanagement is quickly noticed. 4] Management is an activity and not a person or group of persons:- Management is not people or not a certain class but it is the activity, it is the process of planning, organizing, directing, and controlling to achieve the objectives of the organization. 5) Management is situational:- Management does not advise the best way of doing things. A manager has to apply principles, approaches and techniques of management after taking into consideration the existing situations.

47. 6] Management is universal:- Most of the principles and techniques of management are universal in nature. They can be applied to government organizations, the military, educational institutes, religious institutes, etc. They provide working guidelines that can be adopted according to situations. 7] Management is concerned with people:- Since management involves getting things done through others only human beings perform this activity with the help of planning and control. The element man can not be separated from the management.

48. 8] Management is the combination of art, science, and profession:- Management makes use of science as well as art. It is a science because it collects knowledge with the methods and data, analyzes and measures it, and the decision is taken with the help of an experiment. It is a systematic body of knowledge. Art means the application of knowledge to solving various problems. In modern times there is a separation of ownership and management, so Professional experts are appointed.

49. DIFFERENCE BETWEEN MANAGEMENT AND ADMINISTRATION MANAGEMENT ADMINISTRATION 1. Focuses on achieving organizational goals through the coordination of resources and people. 1. Focuses on implementing policies and procedures set by management to ensure the smooth operation of the organization. 2. Involves decision-making, planning, organizing, and leading activities to achieve desired outcomes. 2. Involves executing and overseeing daily operational tasks and routine functions. 3. Emphasizes strategic thinking, setting objectives, and creating long-term plans for the organization. 3. Emphasizes efficiency, adherence to policies, and maintaining day-to-day operations.

50. 4. Involves the utilization of human, financial, and material resources to achieve organizational goals. 4. Involves allocating resources effectively, ensuring compliance, and handling administrative tasks. 5. Requires strong leadership skills, including motivating, inspiring, and guiding employees. 5. Requires strong organizational and coordination skills to ensure tasks are executed as per established procedures. 6. Deals with change management, innovation, and adapting to dynamic business environments. 6. Deals with implementing established processes and procedures consistently and efficiently.

51. 7. Requires a broader scope of knowledge and skills, including strategic planning, problem-solving, and team building. 7. Requires attention to detail, organizational skills, and familiarity with administrative systems and processes. 8. Focuses on achieving efficiency, effectiveness, and profitability within the organization. 8. Focuses on ensuring compliance, maintaining records, and enforcing policies and regulations. 9. Managers are responsible for setting goals, defining objectives, and monitoring performance. 9. Administrators are responsible for implementing policies, enforcing rules, and maintaining order. 10. Management is more concerned with the overall success and growth of the organization. 10. Administration is more concerned with the day-to-day operations and smooth functioning of the organization.

52. DEVELOPMENT OF MANAGEMENT THOUGHT The Industrial Revolution in the early 19th century brought monumental changes in the workplace. As factories were the primary source of employment, management theorists studied the operations and workforce present on the factory floors. There were times when the demand was high but the lack of productivity and efficiency held workplaces back. The Industrial Revolution gave birth to multiple management theories and concepts that developed over time and are still relevant today.

53. a) Classical Theory of Management 1. Scientific Management 2. Administrative Management b) Neoclassical Theory Of Management 1. Human Relations Management 2. Behavioral Management c) Modern Theory Of Management 1. Systems Approach 2. Contingency Approach

54. (SCIENTIFIC MANAGEMENT) CONTRIBUTION OF F.W. TAYLOR Scientific management is a part of early management approaches. The chief contributor to scientific management is F. W. Taylor. He is known as the Father of Scientific Management (1856 to 1915) and was born in USA. He did most of his schooling in France & Germany. He couldn’t finish his graduation and join Midvale Co. (Steel Work). He worked there for 6 years. In 1884 he raised to the position of Chief Engineer, as mean while he obtained Masters degree in Physics, Mathematics & Engineering.

55. In 1898, he joined Bethlehem Steel Co. where he did his experiment to increase the loading capacity of each worker with regards to material handling equipment. At first one worker was engaged in loading 12.5 tones of iron. But with the help of time & motion study he proved that one man can load 47.48 tons because of the change in the size of the spade & systematic arrangement of instruments. With the help of proper planning, an organization can earn more profit. Initially, the workers in that company were 500 to 600 because of this the strength of workers reduced to 140 and profit increased by 78,000 dollars.

56. Contribution of F. W. Taylor :- 1) At Midvale Steel Co. he improved proper distribution of work for each worker. 2) In Midvale Steel Co. he analyzed the work done by workers in specific jobs & allotted standard time. 3) He also made experiments on time study & motion study to decide the workload of each worker. 4) In Bethlehem Steel Co. he had made experiments with material handling equipment for increasing the capacity of each worker. 5) In 1901, he presented a paper on differential piece rate system. 6) In 1906, he published an article on the art of cutting metals. 7) In 1903, he presented important paper on shop management – In which he explained gang boss, speed boss, repair boss & inspector.

57. Meaning of Scientific Management It refers to the use of scientific and standardized tools, methods and trained workers in all organisational activities in order to increase the total production with minimum cost and wastage. Definition: According to Fredick Winslow Taylor, “ Scientific management means knowing exactly what you want men to do and seeing that they do it in the best and the cheapest way’’,

58. PRINCIPLES OF SCIENTIFIC MANAGEMENT : (1) SCIENCE NOT RULE OF THUMB: --This principle says that we should not get stuck in a set routine with the old techniques of doing work, rather we should be constantly experimenting to develop new techniques that make the work much simpler, easier, and quicker. --Taylor believed that there was one best method to maximize efficiency and that even a small production activity like loading match sticks into box could be scientifically planned and managed. --This method involved the investigation of traditional methods through work-study, unifying the best practices, and developing a standard method, which would be followed throughout the organization.

59. 2) HARMONY, NOT DISCORD: --As per this principle, such an atmosphere should be created in the organization that labor (the major factor of production) and management consider each other indispensable. --There should be complete harmony between the managers and the workers. -- Management should share the gains of the company and at the same time, workers must work hard to change the company for good . EXAMPLE : In Japanese companies paternalistic style of management is in practice. There is complete openness between management and workers. If at all the workers go for a strike they wear a black badge but work more than normal working hours to gain the sympathy of management.

60. 3) COOPERATION, NOT INDIVIDUALISM : --According to this principle, all the activities done by different people must be carried on with a spirit of mutual cooperation. --Competition should be replaced by Cooperation. --Taylor has suggested that the manager and the workers should jointly determine standards. This increases involvement and thus, in turn, increases responsibility. In this way we can expect miraculous results. --This can be achieved by : Rewarding the employees for their suggestions. Workers not going on unnecessary strikes and making unreasonable demands. Open communication between management and all staff. Equal division of work and responsibility between workers and management.

61. (4) DEVELOPMENT OF EACH AND EVERY PERSON TO HIS OR HER GREATEST EFFICIENCY AND PROSPERITY : --According to this principle, the efficiency of each and every person should be taken care of right from his selection. --A proper arrangement for everybody’s training should be made. --It should also be taken care of that each individual should be allotted work according to his ability and interest. Such a caring attitude would create a sense of enthusiasm among the employees and a feeling of belongingness too.

62. MECHANISM OF SCIENTIFIC MANAGEMENT: 1. Separation of Planning & Doing:- Before Taylor’s scientific management, a worker used to plan his work & instruments necessary for that. The supervisors’ job was to see how the workers were performing. This creates a lot of problems. Taylor has separated planning & doing authority.

63. 2. Functional Foremanship:- Separation of planning from doing resulted in development of a supervision system. Functional foremanship is essentially an administration system that is somewhat based on the principle – ‘Division of Labor’, to establish specialization in an organizational setup. In a functional organization, the available work is divided into different parts and are delegated to workers who are somewhat specialized in them. 

64. A) Planning Department: The Planning Department is Headed by a Planning Manager. Route Clerk- This person is in charge of deciding a day’s work and is also responsible for ensuring the work sequence is maintained and completed properly. Time and Cost Clerk- This clerk is mostly responsible for deciding the entire time frame of the designated work. Also, the cost of producing a product is decided by them. Instruction Clerk- The instruction clerk is accountable for preparing instruction cards containing information about the kind of work, procedures to apply, and equipment and raw materials to be used. Discipline Officer- This officer ensures that delegated tasks are performed in a disciplined manner.

65. b) Production Department: Speed Boss- Primary task is to make sure that workers are on par with the work schedule. The speed boss is also responsible for identifying the reasons that tend to slow down work productivity and formulating suitable solutions to remedy them. Repair Boss- Is responsible for keeping all equipment in good working condition and solves problems promptly Inspector/supervisor:- An inspector checks the quality of goods produced and compares them with the standard quality. An inspector has the power to initiate corrective measures if there is a lag in quality. 

66. Gang Boss- He/she serves as the leader of a gang of workers. A gang boss is mostly responsible for ensuring that equipment and workers are suitable for producing the required units of products. It is under his supervision to check if raw materials have been made available to workers

67. 3. Job Analysis:- It is related to finding out the best way of doing it. It means that the least movements in Doing the job. It will lead to complete production in less time & a lesser cost. It includes:- A) Time Study:- It means determining the time required to complete a job in a particular time. The movement which takes minimum time is the best one. B) Motion study:- It means the study of movement while performing a job i.e. elimination of wasteful movement in performing a job, only necessary movements are engaged.

68. C) Fatigue Study:- It shows the amount & frequency of rest required while completing the work. After a certain period of time, workers feel fatigued & can’t work at full capacity. Therefore they require rest in between. When rest is allowed they start working at full capacity. D) Standardization:- As far as possible standardization should be maintained in respect of instruments & tools, period of work, amount of work, working conditions, cost of production etc. These all things are fixed in advance on the basis of job analysis

69. E) Scientific Selection & Training of Workers:- Taylor has suggested that workers should be selected on a scientific basis Taking into account their education, work experience, attitude & physical Strength. F) Financial Incentives:- Financial incentives help to motivate workers to maximum efforts. Higher wages lead to an increase in efforts. He applied a differential piece rate system. According to His workers have to complete the work within a specified time and then only he will get wages at a higher rate per piece & and one who does not complete a job gets a lower rate. Wages should be based on individual performance & not on the position occupied.

70. G) Economy:- Techniques of cost estimated & control should be adopted. Waste should be controlled properly. Profit will be achieved with the elimination of wastage. H) Mental Revolution:- Scientific management depends upon mutual co-operation between workers & management. Taylor says great revolution takes place in the mental attitude of two parties under scientific management. He has given a systematic design of work. Labor management, and co-operation required a complete mental change on the part of both parties. The workers have specific duties towards management & vice-versa.

71. Criticisms :- In the beginning Taylor’s scientific management was considered as something unique. But after some time it was subjected to several criticism. 1) Taylor’s scientific management was related to production management. It takes a practical view of management & focuses attention only on production management. Taylor’s study of management has become the study of lower level management. He stressed efficiency on a lower level. He has neglected marketing, financial, and decision-making aspects completely. 2) Scientific management is applicable to large-scale organizations. It involves high expenditure. It is a luxury for small-scale organizations. It involves research, experiment & analysis. It is difficult for small-scale organizations. 3) It was also argued that devices of work analysis, time study & motion & fatigue study can’t be applied in practical life.

72. 4) The idea of the best way of doing a job was also criticized. Everyone has his own. In the natural style of work & he can give his best only if he is allowed to work in his style. The maximum efficiency will be attained by the group & not by individual workers. 5) Wages of workers are not increased in direct proportion to productivity. It leads to the exploitation of workers. 6) People are not ready to use the word ‘scientific’. The scientific does not have any significance. Management is a social science and not an exact science.

73. ADMINISTRATIVE MANAGEMENT (CONTRIBUTION OF HENRY FAYOL) Henry Fayol has been considered the real father of modern management. He was a French industrialist and graduated as a mining engineer in 1860. In 1908, Fayol contributed his famous “functional approach” to the management literature. Fayol’s writings were first published in 1908 in French, but up to 1918, it was not translated into English. His ideas were accepted after his death in 1925. Henry Fayol has written a book for his contribution in which he has explained, the problems of managing & an organization from a top management point of view. He has used the term administration instead of management. When he retired in the year 1918, the company was in excellent condition. Henri Fayol recognized the need for principles of management. He identified  14 Principles of Management . These principles are:

74. 1. Division of Work: It refers to dividing the work into different individuals. Fayol recommended that work of all kinds must be divided and allocated as per the competence, qualification, and experience of individuals. According to Fayol, “Division of work intends to produce more and better work for the same effort. Specialization is the most efficient way to use human effort.”  Example:  a bank has several operations, like collection and payment of cash, issuing cheque books, etc. All those activities are divided and allocated to a different person in the bank. This method of doing work also improves their efficiency and makes them experts in their field. 

75. 2. Authority and responsibility: According to this principle, there should be a proper balance between authority and responsibility. Authority is the duty, that a subordinate is expected to perform. Authority and responsibility go hand in hand. Authority without responsibility leads to irresponsible behavior, while responsibility without authority will make a person ineffective. According to Fayol, “Authority is the right to give orders and obtain obedience, and responsibility is the corollary of authority. The two types of authority are official authority, which is the authority to command, and personal authority, which is the authority of the individual manager.” Example: if a foreman is given the responsibility to produce 50 units per day, then he must be given the required authority to achieve this target. If he is not given authority to draw raw material from the stores, then he cannot be blamed.

76. 3. Discipline: Discipline refers to obedience to the rules and regulations of the organization. Discipline requires good supervision at all levels of management. According to Fayol, good supervision at all levels, clear and fair rules, and a built-in system of penalties will help to maintain discipline. It is a must for all levels of management. Example : Employees must be disciplined to work effectively and efficiently to meet their promises of bonuses, increments, and promotions. Its smoothness systemizes the functioning of an organization by providing better relations between management and employees.

77. 4. Unity of Command: According to this principle, each subordinate should receive orders and be accountable to only the superior. No person can serve several masters at the same time. If an employee gets orders from two superiors at the same time, then the principle of unity of command is violated, and he will find it very difficult to decide whom he has to obey first. So, to avoid confusion, employees should receive an order from one superior. Example: there is a salesperson who is asked to clinch a deal with a buyer and he is allowed to give a 12% discount by the marketing manager. But the finance department tells him not to offer more than a 6% discount. In this case, there is no unity of command, which will lead to confusion and delay.

78. 5. Unity of Direction: It implies that there should be one head and one person for proof of activities having the same objectives. According to this principle, all the activities should be carried under the direction of one head, and there should be effective coordination in all the activities. This principle ensures unity of action and avoids unnecessary duplication of work. E xample :  if an organization has four departments for different activities, then each department must be directed by one superior, and its employees should give their whole efforts to achieving the plan of the organization. Each division should have its own charge, plans, and execution resources. There should not be an unnecessary duplication of efforts and a waste of resources.

79. 6. Subordination of Individual Interest to General Interest: According to this principle, the interest of the organization as a whole must prevail over the interest of the individual. It must be the interest of the organization that should be placed above the interest of employees. It is the duty of the manager to reconcile them. If reconciliation is impossible, then general interest must supersede individual interest. A manager must sacrifice his interest. Example: there is a company that wants maximum output from its employees by providing lower salaries. There are employees on the other hand who want to get the maximum salary while working the least. In both situations, the interests of the company will supersede the interests of any one individual. The interests of the workers and stakeholders are more important than the interests of any one person.

80. 7. Remuneration of Employees: According to this principle, remuneration should be fair and satisfactory to both employees and the organization. This principle leads to harmonious relations in the organization. Fair remuneration should be determined based on government rules related to wages, the financial position of the organization, the nature of work, and the cost of living. Employees should be paid reasonable wages for their service, which should provide them with a moderate standard of living.  Example: if an organization earns higher profits, then it should share some of its parts with the employees in the form of a bonus.

81. 8. Centralization and Decentralization: Centralization refers to the concentration of authority at the top level, and decentralization means distribution at all levels of management. According to this principle, there should be a proper balance between centralization and decentralization. The degree of centralization and decentralization depends on various factors, such as the experience of the employees, the ability of subordinates, the size of the organization, etc. Too much centralization leads to loss of control of top management. Therefore an optimum balance should be maintained according to the need of the organization. E xample :  Authority to make vital decisions must be given to the top management, whereas authority related to operational activities must be given to the middle and lower level.

82. 9. Scalar Chain: According to this principle, there is a scalar chain of authority and communication that moves in a straight line from the superior to the lowest subordinate. Henri Fayol permitted a shortcut of chain in case of urgency known as  gang plank.  Gang plank allows direct communication between two employees of the same level.  Example :  E wants to communicate with I for some important work. The message should orderly move from E to D, then to C, B, A, and then down from A to F then to G, H and finally to I. This will take lots of time so to avoid this delay in work, Fayol suggested the concept of Gang Plank. In this concept ‘E’ can communicate directly with ‘I’ on an urgent matter, the gang plank allows two employees of the same level to communicate directly with each but each must enforce to its superior.

83. 10. Order: According to this principle, there should be a proper place for everything and everyone. Henry Fayol emphasized two types of order:  material order  and  social order . In material order, there must be a plan for everything. It ensures a place for various material tools. In the social order, there must be an appointed place for every employee, which ensures a proper and fixed place/cabin for each employee. E xample:  there should be a specific place for foremen in a factory so that the work can be done easily.

84. 11. Equity According to this principle, there should not be any discrimination among employees based on religion, caste, language, or nationality. Equity ensures coordinated relations between superiors and subordinates. It leads to the smooth and successful working of the enterprise. It improves the satisfaction and motivation of the employee, creating relations between manager and employees. E xample: workers doing similar jobs in the same organization should be paid the same wages irrespective of their sex, caste, religion, and language. 

85. 12. Stability of Personnel According to this principle, there should be a proper effort to achieve stability and continuity of employment. Fayol said that employees should be kept in their position for a reasonable time to show result stability create a sense of belonging, and workers are encouraged to improve their quality of work.  This will increase the efficiency of employees, and it will also increase the reputation of the organization. Unnecessary labor turnover creates an atmosphere of disbelief. Continuous changes in employees disturb the working environment. Example :  new employees must be given ample time to adapt to the new culture and environment of the workplace.

86. 13. Initiative: According to this principle, workers should be encouraged and should be given an opportunity to take the initiative in making and executing the plan. Henri Fayol suggested that employees at all levels should be encouraged to take initiative in work. It motivates employees to work better and to take more interest in the organization. The initiative is a powerful motivator of human behavior and a source of strength for the organization. This increases the mental growth and feeling of belongingness in employees. It increases the commitment of employees toward the organization. A lack of initiatives may create an atmosphere of non-cooperation. For example,  organizations must have an employee suggestion system so that they have a feeling of belongingness. 

87. 14. Espirit De Corps: According to this principle, management should take reasonable steps to develop a sense of belongingness and a feeling of team spirit amongst employees. In order to achieve the best possible result, individual and group efforts need to be integrated. Production is teamwork and it requires the full support of all members. For this purpose, a manager should replace ‘I’ with ‘We’ in his conversations to bring a team spirit among the employees. This will develop an atmosphere of mutual trust. It will help in achieving group goals, leading to cordial relations between management and workers.  Example:  authority and responsibility meant empowering managers, but now it means empowerment of employees because of flat organizational structures that are gaining ground. -

88. CONTINGENCY APPROACH TO MANAGEMENT The contingency approach in management emerged from the valuable research conducted by renowned experts such as Tom Burns, G.W. Stalker, Joan Woodward, Paul Lawrence, Jay Lorsch, James Thompson, and others. These scholars explored the relationships between organizational structure and environmental conditions, shedding light on the importance of aligning management practices with specific situational factors.

89. In the 1950s, Burns and Stalker conducted an analysis of British and Scottish firms, identifying two distinct organizational structures: mechanistic and organic. They also observed two types of environments: stable and dynamic. They found that organizations operating in stable environments typically adopted a mechanistic structure, while those in dynamic environments preferred an organic structure. Joan Woodward made significant contributions in the 1960s by examining the impact of technology on organizational structures. Her study encompassed approximately 100 industrial firms in the U.K. Woodward discovered that the type of technology employed in the production process, whether unit/small batch, mass/large batches, or continuous process, played a substantial role in determining various structural aspects such as span of control, the utilization of committees, and participative decision-making.

90. The contingency approach in management recognizes that effective management practices are contingent upon the specific characteristics of the situation, including the environment, technology, and complexity. The valuable research conducted by Burns, Stalker, Woodward, Lawrence, Lorsch, Thompson, and other experts has significantly contributed to our understanding of the contingency approach and its application in modern management practices.

91. Features of the Contingency Approach to Management Situational Focus: The contingency approach recognizes that management is situational. The effectiveness of any technique or measure depends on the specific situation at hand. Different conditions and complexities require different approaches and techniques. B) Fit the Situation: Management should match or “fit” its approach to the requirements of the particular situation. To be effective, management policies, practices, and strategies must align with the environmental changes and demands. The organization’s structure, leadership style, and control systems should be designed to fit the specific situation.

92. C) Environmental Adaptation: Management’s success relies on its ability to cope with the environment. Managers should sharpen their diagnostic skills to anticipate and understand environmental changes. They need to be proactive and adaptive in response to dynamic external factors. D) No Universal Best Way: The contingency approach emphasizes that there is no one best way to manage. Management principles and techniques cannot be universally applied without considering the specific circumstances. Different situations require different approaches and strategies.

93. Limitations of Contingency Approach to Management A) Complexity and Subjectivity: The contingency approach acknowledges the complexity of managerial decision-making and the subjective nature(not based on personal opinions… based on objective fact) of the situational analysis. It can be challenging for managers to accurately assess and interpret the various situational factors that influence management strategies. B) Limited Universal Principles: The contingency approach recognizes that there are very few universal principles and techniques that can be applied in all conditions. This means that managers may not have a standardized set of guidelines to rely on, and decision-making becomes more context-dependent.

94. C) Reliance on Managerial Skills: The contingency approach places a significant emphasis on managers’ skills in situational analysis and decision-making. This reliance on managerial capabilities can pose challenges if managers lack the necessary expertise or experience to effectively assess and respond to situational demands. D) Complexity of Interactions: The contingency approach acknowledges the relationships between subsystems within an organization and between the organization and its environment. However, these interactions can be complex and dynamic, making it challenging to fully understand and manage the contingencies that arise.

95. HUMAN RELATION APPROACH CONTRIBUTION OF ELTON MAYO (HAWTHORNE EXPERIMENTS) George Elton Mayo was an Australian psychologist, sociologist, and organization theorist. He was a professor of Industrial Research at the Harvard Graduate School of Business. He is one of the founders of the Human Relations Movement. He was the first person to plea for the understanding of workers' problems in the context of the growth of science and technology. He wished the management to understand the problems of workers and make efforts to redress them. Hawthorne experiments were conducted from 1924 to 1932 at a plant of Western Electric Company, Chicago was manufacturing Telephone System Bell. It employed 30,000 employees at the time of the experiment. The experiment was conducted in 4 phases.

96. Phase I: Illumination Experiments (1924-27): (Physical, conducting, lighting effect) It was undertaken to find out how a change in light and physical factors affects production. In this phase two groups were divided. One is the experimental group and the other one is a control group Higher illumination will help in increasing the production decrease in lighting will lead to a reduction in production. Surprisingly, productivity increased even when the level of illumination was decreased. Thus, the researchers had to conclude that illumination affected production only marginally and there must be some factor which produced this result. Therefore, another phase of experiments was undertaken.

97. (b) Phase II: Relay Assembly Test Room Experiment (1927-28): Under this study, two small groups of six female telephone relay assemblers were put in separate rooms under close observation and control. Frequent changes were made in working conditions such as working hours, rest periods, hot lunch etc. Over the two years period, it was concluded that social or human relationships among workers exercised greater influence on the productivity of workers than working conditions. This special attention and treatment given to workers developed a sense of group pride and belongingness which motivated them to increase their performance. It was, thus, concluded that socio-psychological factors like feeling of importance, recognition, attention and participation, small informal cohesive work groups, non-directive supervision, etc -played a key role in increasing productivity.

98. Changes made in phases 2 Incentives system was changed Each girl’s extra pay was based on the other 5 rather than the output of the large group Productivity increased compared to before 2 ) Two five minutes rest: One in the morning and the other in the evening session was introduced It was later increased to 10 minutes Productivity was increased 3 ) The rest period was reduced to 5 minutes but frequently was increased The productivity decreased slightly The girls complained that frequent rest intervals affected the rhythm of the work.

99. 4 ) The number of rest was reduced to two of 10 minutes each But in the morning coffee or soup was served with a sandwich And in the evening snacks were provided The productivity increased 5) Changes in working hours and workday were introduced Like eliminating Saturday Allowing women to leave early from 5.00 p.m to 4.00 pm Productivity also increased.

100. As each change was introduced, absenteeism decreased, morale increased and less supervision was required. The researchers decided to revert back to the original position which is no rest and no benefits Productivity increased further instead of going down. It was concluded that productivity increased not because of positive changes in physical factors but because of a change in the girls attitude towards work and their work group. They developed a feeling of stability and a sense of belongingness They developed a sense of responsibility and self-discipline.

101. Phase III: Mass Interviewing Program (1928-30): During the course of the experiment, about 20,000 interviews were conducted from 1928 to 1930. to study the human behaviour in the company For determination of employee’s attitude towards company such as supervision, insurance plan, promotion, wages, etc. & yes & no type of questions were asked. During the course of an interview, it was discovered that workers’ behavior was influenced by group behavior. The program indicated that productivity can be increased if people are allowed to talk freely. However, this conclusion was not very satisfactory and, therefore, researchers decided to conduct another series of experiments. As such, a detailed study of a shop situation was started to find out the behavior of workers in small groups.

102. Phase IV: Bank Wiring Observation Room Experiment (1931-32): This experiment was carried out from 1931 to 1932 with a view to analyzing the functioning of small groups and their impact on individual behavior. The group was formed consisting of 14 male members, 9 wire men, and two inspectors. Hourly wage rate was based on the average output of each worker and bonus was based on the productivity of a group of workers. It was found that the group has established its own standards of output and social pressure was exercised. It was found that the group evolved its own production norms, which were much lower than that set by the authority. This was done deliberately by the group to protect the slow workers. The group norm was so strictly adhered to by most of the group members that nobody dared to violate it for fear of being ostracized by the group. An individual who had emerged as the informal leader controlled the group.

103. Fear of unemployment: if there would be more production per head, some of the workers would be put out of employment. Fear of raising the standards: Workers thought if they reached the standard set by the management, they would again raise the standard. Protection of slower workers: The workers were friendly on and off the job. The faster workers protected the slower workers by not over–producing. Satisfaction on the part of management: Management seemed to accept a lower production rate as no one was fired for restricted output.

104. Findings/Implications of Hawthorne studies

105. Criticism:- 1) The Hawthorne experiment is criticized because there is no scientific base. It is based on social relationships. 2) It was also pointed out that this experiment does not have any guarantee because it has a limited scope. 3) The human relationship approach is criticized on several bases. It is observed that this approach tries to soft-corner the requirements of the organization. No attempt was made to understand human behavior in the workplace. 4) As a result of the impact of the human relation approach, human relations become fad and fashion with many people in the organization. They believe that happy workers are productive workers. This is not always true.

106. 5) With the passage of time both managers & workers begin to realize the disadvantage of the situation. 6) When decisions are made secretly is important which is not possible in the Hawthorne experiment. However, the human relationship approach should not be totally neglected. Human Psychology is basically sound & and should be properly understood.