• According to Peter Drucker, "Management is a multi-purpose organ that manages
business and manages managers and manages workers and work.“
• In simple words, "Management is the art of getting things done through people."
• The organization resources consist of five M’s —
• Man,
• Material,
• Money,
• Machine
• Methods.
• 5Ms are to be managed effectively and efficiently
The nature, main characteristics or features of
management:
1.Continuous and never ending process.
2.Getting things done through people.
3.Result oriented.
4.Multidisciplinary in nature.
5.A group and not an individual activity.
6.Follows established principles or rules.
7.Aided but not replaced by computers.
The nature, main characteristics or features of
management:
8. Situational in nature.
9. Need not be an ownership.
10.Both an art and science.
11.Management is all pervasive.
12.Management is intangible.
13.Uses a professional approach in work.
14.Dynamic in nature.
Roles of Manager
 Interpersonal: Coordinate and
interact with employee and
provide
direction
to
the
organization.
 Decisional
o Entrepreneur
o Disturbance handler
o Figurehead
o Resource allocator
o Leader
o Negotiator
o Liaison
 Informational
o Monitor
o Disseminator
o Spokesperson
Management Principle: AUTHORITY AND RESPONSIBILITY
• Authority
• Authority is the right or power assigned to an executive or a manager in order to achieve certain
organizational objectives.
• Authority is the power to give orders and get it obeyed or in other words it is the power to take decisions.
• According to Henri Fayol, "Authority is the right to give orders and the power to exact obedience."
• Responsibility
• Responsibility means state of being answerable for any obligation, trust, debt or something or in other
words it means obligation to complete a job assigned on time and in best way.
• According to Davis, "Responsibility is an obligation of individual to perform assigned duties to the
best of his ability under the direction of his executive leader."
Characteristics of Responsibility
 The essence of responsibility is the obligation of a subordinate to perform the duty assigned.
 It always originates from the superior-subordinate relationship.
 Normally, responsibility moves upwards, whereas authority flows downwards.
 Responsibility is in the form of a continuing obligation.
 Responsibility cannot be delegated.
 The person accepting responsibility is accountable for the performance of assigned duties.
 It is hard to conceive responsibility without authority.
• Authority and responsibility are closely related and this principle states that these two must go hand in hand.
It means that proper authority should be delegated to meet the responsibilities.
• A match should be there between these two because of two main reasons:- Firstly, if a person is given some responsibility without sufficient authority he can’t perform better, and also could
not accomplish the desired goal.
 Secondly, if there is excess authority being delegated to an individual without matching responsibility
then the delegated authority will be misused in one way or the other
• Positive impacts of this principle:




No misuse of authority.
Helps to complete job effectively and efficiently.
Individuals can be held accountable.
Systematized and effective achievement of organizational objectives.
• Consequences of violation of this principle:




Misuse of authority.
Responsibility can’t be discharged effectively.
No one can be held accountable.
Conflicts between management and employees.
Accountability
• Every employee/manager is accountable for the job assigned to him. He is supposed to complete
the job as per the expectations and inform his superior accordingly. Accountability is the liability
created for the use of authority. It is the answerability for performance of the assigned duties.
• Definition of Accountability
• According, to McFarland, "accountability is the obligation of an individual to report formally to his superior about the
work he has done to discharge the responsibility."
Management Theory
• Classical Approach — F. W. Taylor (Scientific Principles of Management)
• Henri Fayol’s Principles of Management
• Max Weber Bureaucracy Theory (not to be covered for test 1)
• Behavioral Approach (Hawthrone Experiment, Maslow’s need hierarchy and McGregor’s theory X
and Y)
• Contemporary Approach (Ouchi’s Z Theory and Contingency Management)
Scientific Principles of Management by F. W. Taylor
• He summed up his approach in these words:
 Science, not rule of thumb
 Harmony, not discord
 Co-operation, not individualism
 Maximum output, in place of restricted output
 The development of each man to his greatest efficiency and prosperity
The techniques which Taylor regarded as its essential elements or features may be classified as under:
• 1. Scientific Task and Rate-setting, work improvement, etc.
• 2. Planning the Task.
• 3. Vocational Selection and Training
• 4. Standardization (of working conditions, material equipment etc.)
• 5. Specialization
• 6. Mental Revolution.
Scientific Task and Rate-Setting (work study)
• (a) Methods Study: The management should try to ensure that the plant is laid out in the best manner and is
equipped with the best tools and machinery. The possibilities of eliminating or combining certain
operations may be studied.
• (b) Motion Study: It is a study of the movement, of an operator (or even of a machine) in performing an
operation with the purpose of eliminating useless motions.
• (c) Time Study (work measurement): The basic purpose of time study is to determine the proper time for
performing the operation. Such study may be conducted after the motion study. Both time study and motion
study help in determining the best method of doing a job and the standard time allowed for it.
• (d) Fatigue Study: If, a standard task is set without providing for measures to eliminate fatigue, it may
either be beyond the workers or the workers may over strain themselves to attain it. It is necessary,
therefore, to regulate the working hours and provide for rest pauses at scientifically determined intervals.
• (e) Rate-setting: Taylor recommended the differential piece wage system, under which workers performing
the standard task within prescribed time are paid a much higher rate per unit than inefficient workers who
are not able to come up to the standard set.
• Planning the Task: Having set the task which an average worker must strive to perform to get wages at the
higher piece-rate, necessary steps have to be taken to plan the production thoroughly so that there is no bottle
neck and the work goes on systematically.
• Selection and Training: Scientific Management requires a radical change in the methods and procedures of
selecting workers. It is therefore necessary to entrust the task of selection to a central personnel department.
The procedure of selection will also have to be systematized. Proper attention has also to be devoted to the
training of the workers in the correct methods of work.
• . Standardization: Standardization may be introduced in respect of the following:
• (a) Tools and equipment: By standardization is meant the process of bringing about uniformity. The
management must select and store standard tools and implements which will be nearly the best or the best
of their kind.
• (b) Speed: There is usually an optimum speed for every machine. If it is exceeded, it is likely to result in
damage to machinery.
• (c) Conditions of Work: To attain standard performance, the maintenance of standard conditions of
ventilation, heating, cooling, humidity, floor space, safety etc., is very essential.
• (d) Materials: The efficiency of a worker depends on the quality of materials and the method of handling
materials.
• Specialization: Scientific management will not be complete without the introduction of specialization. Under this
plan, the two functions of 'planning' and 'doing' are separated in the organization of the plant. The `functional
foremen' are specialists who join their heads to give thought to the planning of the performance of operations in the
workshop. Taylor suggested eight functional foremen under his scheme of functional foremanship.
• (a) The Route Clerk: To lay down the sequence of operations and instruct the workers concerned about it.
• (b) The Instruction Card Clerk: To prepare detailed instructions regarding different aspects of work.
• (c) The Time and Cost Clerk: To send all information relating to their pay to the workers and to secure proper
returns of work from them.
• (d) The Shop Disciplinarian: To deal with cases of breach of discipline and absenteeism.
• (e) The Gang Boss: To assemble and set up tools and machines and to teach the workers to make all their personal
motions in the quickest and best way.
• (f) The Speed Boss: To ensure that machines are run at their best speeds and proper tools are used by the workers.
• (g) The Repair Boss: To ensure that each worker keeps his machine in good order and maintains cleanliness around
him and his machines.
• (h) The Inspector: To show to the worker how to do the work.
• 6. Mental Revolution: At present, industry is divided into two groups – management and labor. The major
problem between these two groups is the division of surplus. The management wants the maximum possible
share of the surplus as profit; the workers want, as large share in the form of wages. Taylor has in mind the
enormous gain that arises from higher productivity. Such gains can be shared both by the management and
workers in the form of increased profits and increased wages.
Critiques of Taylor
1. Taylor promoted the idea that there is "one right way" to do something. This approach is at odds with the current
approaches. Taylor’s approach promotes tightly controlled procedures and environment and provides no flexibility
to the employees. Rigid, rules-driven organizations really struggle to adapt in rapidly changing environment.
2. Taylor breaks tasks down into tiny steps, and focuses on how each person can do his or her specific series of steps
best. Modern methodologies prefer to examine work systems more holistically in order to evaluate efficiency and
maximize productivity. The extreme specialization that Taylorism promotes is contrary to modern ideals of how to
provide a motivating and satisfying workplace.
3. Taylor’s approach separates manual from mental work, modern productivity enhancement practices seek to
incorporate worker's ideas, experience and knowledge into best practice.
4. Scientific management in its pure form focuses too much on the mechanics, and fails to value the people side of
work, whereby motivation and workplace satisfaction are key elements in an efficient and productive organization.
Henry Fayol’s principles of management
1. Division of work
2.
3.
4.
5.
6.
Authority
Discipline
Unity of command
Unity of direction
Subordination of individual
interest to the general
interest
7. Remuneration
8. Centralization
9. Scalar chain
10. Order
11. Equity
12. Stability of tenure of
personnel
13. Initiative
14. Espirit de corps
Henry Fayol’s principles of management
1.
Division of work
•
Work should be divided among individuals and groups to ensure that effort and attention are focused on special portions of the task.
•
When employees are specialized, output can increase because they become increasingly skilled and efficient
2.
Authority
•
3.
Discipline
•
4.
A successful organization requires the common effort of workers. Penalties should be applied judiciously to encourage this common effort.
Unity of command
•
5.
Workers should receive orders from only one manager. That is, employees should have only one direct supervisor.
Unity of direction
•
6.
The entire organization should be moving towards a common objective in a common direction. Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.
Subordination of individual interest to the general interest
•
7.
The interests of one person should not take priority over the interests of the organization as a whole. The interests of one employee should not be allowed to become more important than those of the group. This includes managers.
Remuneration
•
8.
Many variables, such as cost of living, supply of qualified personnel, general business conditions, and success of the business, should be considered in determining a worker’s rate of pay. Employee satisfaction depends on fair remuneration for
everyone. This includes financial and non-financial compensation.
Centralization
•
9.
the right to give orders and the power to exact obedience.
Fayol defined centralization as lowering the importance of the subordinate role. Decentralization is increasing the importance. The degree to which centralization or decentralization should be adopted depends on the specific organization in which the manager is working. This principle refers to
how close employees are to the decision-making process. It is important to aim for an appropriate balance
Scalar chain
• Managers in hierarchies are part of a chain like authority scale. Each manager possesses certain amounts of authority. The President possesses the most
authority; the first line supervisor the least. Lower level managers should always keep upper level managers informed of their work activities. The existence of a
scalar chain and adherence to it are necessary if the organization is to be successful. Employees should be aware of where they stand in the organization's
hierarchy, or chain of command.
Henry Fayol’s principles of management
10. Order
• For the sake of efficiency and coordination, all materials and people related to a specific kind of work should be
treated as equally as possible. The workplace facilities must be clean, tidy and safe for employees. Everything should
have its place.
11. Equity
• All employees should be treated as equally as possible. Managers should be fair to staff at all times, both maintaining
discipline as necessary and acting with kindness where appropriate.
12. Stability of tenure of personnel
• Retaining productive employees should always be a high priority of management. Managers should strive to minimize
employee turnover. Personnel planning should be a priority.
13. Initiative
• Management should take steps to encourage worker initiative, which is defined as new or additional work activity
undertaken through self-direction. Employees should be given the necessary level of freedom to create and carry out
plans.
14. Espirit de corps
•
Management should encourage harmony and general good feelings among employees. Organizations should strive to
promote team spirit and unity.
Behavioural approach
• The behavioral management theory is often called the human relations movement because it addresses the
human dimension of work.
• Behavioral theorists believed that a better understanding of human behavior at work, such as motivation,
conflict, expectations, and group dynamics, improved productivity.
• Hawthrone Experiment
• The Hawthorne experiments consisted of two studies conducted at the Hawthorne Works of the Western
Electric Company in Chicago from 1924 to 1932.
• The first study was conducted by a group of engineers seeking to determine the relationship of lighting levels to worker productivity.
Surprisingly enough, they discovered that worker productivity increased as the lighting levels decreased — that is, until the employees
were unable to see what they were doing, after which performance naturally declined.
• A few years later, a second group of experiments began. Harvard researchers Mayo and F. J.
Roethlisberger supervised a group of five women in a bank wiring room. They gave the women special
privileges, such as the right to leave their workstations without permission, take rest periods, enjoy free
lunches, and have variations in pay levels and workdays. This experiment also resulted in significantly
increased rates of productivity.
Video on group dynamics discussion
https://news.stanford.edu/features/2015/decisions/group-dynamics.html
• In this case, Mayo and Roethlisberger concluded that the increase in productivity resulted from the
supervisory arrangement rather than the changes in lighting or other associated worker benefits. Because the
experimenters became the primary supervisors of the employees, the intense interest they displayed for the
workers was the basis for the increased motivation and resulting productivity.
• Essentially, the experimenters became a part of the study and influenced its outcome. This is the origin of the
term Hawthorne effect, which describes the special attention researchers give to a study's subjects and the
impact that attention has on the study's findings.
• The general conclusion from the Hawthorne studies was that human relations and the social needs of workers
are crucial aspects of business management. This principle of human motivation helped revolutionize theories
and practices of management.
Differentiate between
• Need
• Want
• Desire
• Physiological needs are those needs required for human survival such as air, food, water, shelter, clothing and sleep. As a manager,
you can account for physiological needs of your employees by providing comfortable working conditions, reasonable work hours
and the necessary breaks to use the bathroom and eat and/or drink.
• Safety needs include those needs that provide a person with a sense of security and well-being. Personal security, financial security,
good health and protection from accidents, harm and their adverse effects are all included in safety needs. As a manager, you can
account for the safety needs of your employees by providing safe working conditions, secure compensation (such as a salary) and
job security, which is especially important in a bad economy.
• Social needs, also called love and belonging, refer to the need to feel a sense of belonging and acceptance. Social needs are
important to humans so that they do not feel alone, isolated and depressed. Friendships, family and intimacy all work to fulfill social
needs. As a manager, you can account for the social needs of your employees by making sure each of your employees know one
another, encouraging cooperative teamwork, being an accessible and kind supervisor and promoting a good work-life balance.
• Esteem needs refer to the need for self-esteem and respect, with self-respect being slightly more important than gaining respect and
admiration from others. As a manager, you can account for the esteem needs of your employees by offering praise and recognition
when the employee does well, and offering promotions and additional responsibility to reflect your belief that they are a valued
employee.
• Self-actualization needs describe a person's need to reach his or her full potential. The need to become what one is capable of is
something that is highly personal. While I might have the need to be a good parent, you might have the need to hold an executivelevel position within your organization. Because this need is individualized, as a manager, you can account for this need by
providing challenging work, inviting employees to participate in decision-making and giving them flexibility and autonomy in their
jobs.
Theory X and Theory Y
• McGregor proposed that there were two types of managers: ones who assumed a negative view of their employees,
also known as the Theory X managers, and others who assumed a positive view of workers, or the Theory Y
managers. So grab your bomb repellent while we explore these two different types of managers by discussing the
assumptions of each.
• Theory X manager, believes that his workers:
•
Hate the idea of having to go to work and do so only to earn a paycheck and the security that it offers.
•
Are inherently lazy, lack ambition and prefer to be directed on what to do rather than assume responsibility on their own.
•
Are self-centered and care only about themselves and not the organization (or its goals), making it necessary for the manager to coerce, control,
direct or threaten with punishment in order to get them to work towards organizational goals.
•
They also dislike change and tend to resist it at all costs
• Theory Y manager, believes her employees:
•
Accept work as a normal part of their day, and it's right next to recreation and rest.
•
They are not lazy at all. In fact, when the proper motivations and rewards are in place, employees are not only willing but purposely driven to
seek out responsibility and challenges on their own.
•
They're full of potential, and it's through their own creativity, ingenuity and imagination that organizational goals are met
• Theory Y: Yoko assumes that her employees are full of potential and that it is her role as a manager to help develop
that potential so that the employee can work towards a common organizational goal. Yoko must also try to harness
the motivational energy of her employees through things such as giving them more autonomy, responsibility, power,
trust and feedback and involving them in the decision-making process
• Theory X: Results-driven and deadline-driven, to the exclusion of everything else, intolerant, issues deadlines and
ultimatums, distant and detached, aloof and arrogant, elitist, short temper, shouts, issues instructions, directions,
edicts, issues threats to make people follow instructions demands, never asks, does not participate, does not teambuild, unconcerned about staff welfare, or morale, proud, sometimes to the point of self-destruction, one-way
communicator poor listener, fundamentally insecure and possibly neurotic, anti-social, vengeful and recriminatory,
does not thank or praise, withholds rewards, and suppresses pay and remunerations levels, scrutinises expenditure to
the point of false economy, seeks culprits for failures or shortfalls, seeks to apportion blame instead of focusing on
learning from the experience and preventing recurrence, does not invite or welcome suggestions, takes criticism
badly and likely to retaliate if from below or peer group, poor at proper delegating - but believes they delegate well,
thinks giving orders is delegating, holds on to responsibility but shifts accountability to subordinates, relatively
unconcerned with investing in anything to gain future improvements and unhappy.
Contemporary approach- theory Z
• Theory Z was developed by not by Mcgregor, but by William Ouchi, in his book 1981 'Theory Z: How American
management can Meet the Japanese Challenge’
• By the 1980s, Japan was known for the highest productivity anywhere in the world, while America's productivity
had fallen drastically.
• The word "Wa" in Japanese can be applied to Theory Z because they both deal with promoting partnerships and
group work.
• The word "Wa" means a perfect circle or harmony, which influences Japanese society to always come to a solution
via teamwork.
• Theory Z essentially advocates a combination of all that's best about theory Y and modern Japanese management
and places a large amount of freedom and trust with workers, and assumes that workers have a strong loyalty and
interest in team-working and the organization
• Theory Z management tends to promote:
• Stable employment
• High productivity
• High employee morale and satisfaction
• The secret to Japanese success, according to Ouchi, is not technology, but a special way of managing people.
"This is a managing style that focuses on a strong company philosophy, a distinct corporate culture, longrange staff development, and consensus decision-making" (Ouchi, 1981). Ouchi claims that the results show:
• Lower turnover
• Increased job commitment
• Dramatically higher productivity
• The most important pieces of this theory is that management must have a high degree of confidence in its
workers in order for this type of participative management to work. This theory assumes that workers will be
participating in the decisions of the company to a great degree.
• Theory Z stresses the need for the workers to become generalists, rather than specialists, and to increase their
knowledge of the company and its processes through job rotations and constant training
• Promotions tend to be slower in this type of setting, as workers are given a much longer opportunity to
receive training and more time to learn the ins and outs of the company's operations.
• The desire, under this theory, is to develop a work force, which has more loyalty toward staying with the
company for an entire career. It is expected that once employees do rise to a position of high level
management, they will know a great deal more about the company and how it operates, and will be able to use
Theory Z management theories effectively on the newer employees.
Contingency management
• Contingency management is based on the principle that behavior is a function of its consequences. That is,
what people do – how they behave – is related in a predictable way to the consequences of their behavior. For
example, if an action is followed by a positive consequence (positive for that person), then the individual is
likely to repeat that action. In contrast, if an action is followed by a negative consequence (negative for that
person), then the individual is unlikely to repeat the action. Negative consequences include both no response
(e.g., the person’s action is ignored) and punishing responses.
Management by objectives (MBOs)
• A management model that aims to improve performance of an organization by clearly defining objectives that are agreed to by both
management and employees
• According to the theory, having a say in goal setting and action plans should ensure better participation and commitment among employees,
as well as alignment of objectives across the organization.
• Key Concepts
• The core concept of MBO is planning, which means that an organization and its members are not merely reacting to events and problems but
are instead being proactive. MBO requires that employees set measurable personal goals based upon the organizational goals. For example, a
goal for a civil engineer may be to complete the infrastructure of a housing division within the next twelve months. The personal goal aligns
with the organizational goal of completing the subdivision.
• Advantage — It provides a means to identify and plan for achievement of goals. If you don't know what your goals are, you will not be able
to achieve them. Planning permits proactive behavior and a disciplined approach to goal achievement. It also allows you to prepare for
contingencies and roadblocks that may hinder the plan. Goals are measurable so that they can be assessed and adjusted easily. Organizations
can also gain more efficiency, save resources and increase organizational morale if goals are properly set, managed and achieved.
• Disadvantage — Application of MBO does take some concerted effort. You cannot rely upon a thoughtless, mechanical approach. You should
note that some tasks are so simple that setting goals makes little sense and becomes more of silly annual ritual. For example, if your job is
snapping two pieces of a product together on an assembly line, setting individual goals for your work borders on the absurd.
Organization structures
Flat
Line
Line
•
•
•
•
•
Merits
✔ It is the simplest kind of organizational structure.
✔ Strict authority results in a stronger discipline.
✔ There is clarity in the structures of authority and responsibility.
✔ As the control rests with one superior, it accords him the flexibility to adjust the
department.
• ✔ There are good career advancement prospects for individuals who deliver quality work.
•
•
•
•
•
•
Demerits
✗ There are chances of the department head being biased.
✗ The department head may be burdened with lots of work.
✗ Communication only happens from top to bottom.
✗ Superiors with authority can misuse it for their benefit.
✗ Decisions are taken by a single person and can go wrong.
Line and Staff
Line and Staff
•
•
•
•
•
Merits
✔ It enables the employees to perform at a faster rate.
✔ It helps employees to accept responsible jobs and specialize in a particular area.
✔ It helps line managers to concentrate on the task at hand.
✔ It results in less operational wastage and increases productivity.
•
•
•
•
•
Demerits
✗ Confusion may be created among employees.
✗ There are too many levels of hierarchy.
✗ As staff specialists exist, it is costlier than a simple line organization.
✗ Decision-making may be time-consuming.
Functional structure
Functional structure
• Merits
• ✔ It has high degrees of specialization.
• ✔ It has clear lines of authority.
• ✔ It facilitates easy accountability for the work.
• ✔ It accords a high level of speed and efficiency.
• ✔ The need for duplication of work is eliminated.
• ✔ All the functions command equal importance.
• Demerits
• ✗ Communication has several barriers which makes coordination difficult.
• ✗ More focus is laid on individuals rather than the organization.
• ✗ The decisions taken by a single person may not always work in favor of the organization.
• ✗ As the organization expands, it gets difficult to exercise control on its operations.
• ✗ There may be lack of teamwork between different departments or units.
• ✗ As all the functions are separated, employees may not gain knowledge about other specializations.
Divisional structure
Product structure
Matrix structure
Video links
• https://www.youtube.com/watch?time_continue=1&v=ISk64bJ35yM
&feature=emb_logo (industry 4.0)