Principles of Management

PRINCIPLES OF MANAGEMENT

 

INTRODUCTION

A business develops in course of time with complexities. With increasing complexities managing the business  has become a  difficult task. The need of existence of management has increased tremendously. Management is essential not only for business concerns but also for banks, schools, colleges, hospitals, hotels, religious bodies, charitable trusts etc. Every business unit has some objectives of its own. These objectives can be achieved with the coordinated efforts of several personnel.

Management is a vital aspect of the economic life of man, which is an organised group activity. It is considered as the indispensable institution in the modern social organization marked by scientific thought and technological innovations. One or the other form of management is essential wherever human efforts are to be undertaken collectively to satisfy wants through some productive activity, occupation or profession.

DEFINITION OF MANAGEMENT

Peter F. Drucker defines, "management is an organ; organs can be described and defined only through their functions".

According to Terry, "Management is not people; it is an activity like walking, reading, swimming or running. People who perform Management can be designated as members, members of Management or executive leaders."

Ralph C. Davis has defined Management as, "Management is the function of executive leadership anywhere."

Henry Fayol, "To mange is to forecast and plan, to organize, to compound, to co-ordinate and to control."

Harold Koontz says, "Management is the art of getting things done through and within formally organized group."

CHARACTERISTICS OF MANAGEMENT

Management is a distinct activity having the following salient features:

1. Economic Resource: Management is one of the factors of production together with land, labour and capital. As industrialization increases, the need for managers also increases. Efficient management is the most critical input in the success of any organized group activity as it is the force which assembles and integrates other factors of production, namely, labour, capital and materials. Inputs of labour, capital and materials do not by themselves ensure production, they require the catalyst of management to produce goods and services required by the society. Thus, management is an essential ingredient of an organization.

     2. Goal Oriented: Management is a purposeful activity. It coordinates the efforts of workers to achieve the goals of the organization. The success of management is measured by the extent to which the organizational goals are achieved.

    3. Distinct Process: Management is a distinct process consisting of such functions as planning, organizing, staffing, directing and controlling. These functions are so interwoven that it is not possible to lay down exactly the sequence of various functions or their relative significance.

   4. Integrative Force: The essence of management is integration of human and other resources to achieve the desired objectives. All these resources are made available to those who manage. Managers apply knowledge, experience and management principles for getting the results from the workers by the use of non-human resources.

     5. System of Authority: Management as a team of managers represents a system of authority, a hierarchy of command and control. Managers at different levels possess varying degree of authority.

    6. Multi-disciplinary Subject: Management has grown as a field of study (i.e. discipline) taking the help of so many other disciplines such as engineering, anthropology, sociology and psychology. Much of the management literature is the result of the association of these disciplines.

   7. Universal Application: Management is universal in character. The principles and techniques of management are equally applicable in the fields of business, education, military, government and hospital.

 

MANAGEMENT FUNCTIONS /PROCESS OF MANAGEMENT

Koontz and O'Donnell divide these functions into planning organizing, staffing, directing and controlling.

1. Planning : Planning is the most fundamental and the most pervasive of all management functions. If people working in groups have to perform effectively, they should know in advance what is to be done, what activities they have to perform in order to do what is to be done, and when it is to be done. Planning is concerned with 'what', 'how, and 'when' of performance. It is deciding in the present about the future objectives and the courses of action for their achievement.

2. Organizing: Organizing involves identification of activities required for the achievement of enterprise objectives and implementation of plans; grouping of activities into jobs; assignment of these jobs and activities to departments and individuals; delegation of responsibility and authority for performance, and provision for vertical and horizontal coordination of activities. Every manager has to decide what activities have to be undertaken in his department or section for the achievement of the goals entrusted to him.

3. Staffing: Staffing is a continuous and vital function of management. After the objectives have been determined, strategies, policies, programmes, procedures and rules formulated for their achievement, activities for the implementation of strategies, policies, programmes, etc. identified and grouped into jobs, the next logical step in the management process is to procure suitable personnel for manning the jobs. Since the efficiency and effectiveness of an organization significantly depends on the quality of its personnel and since it is one of the primary functions of management to achieve qualified and trained people to fill various positions, staffing has been recognized as a distinct function of management.

4. Directing: Directing is the function of leading the employees to perform efficiently, and contribute their optimum to the achievement of organizational objectives. Jobs assigned to subordinates have to be explained and clarified, they have to be provided guidance in job performance and they are to be motivated to contribute their optimum performance with zeal and enthusiasm.

5. Coordination: Coordinating is the function of establishing such relationships among various parts of the organization that they all together pull in the direction of organizational objectives. It is thus the process of tying together all the organizational decisions, operations, activities and efforts so also achieve unity of action for the accomplishment of organizational objectives.

6. Controlling:

Controlling is the function of ensuring that the divisional, departmental, sectional and individual performances are consistent with the predetermined objectives and goals. Deviations from objectives and plans have to be identified and investigated, and correction action taken. Deviations from plans and objectives provide feedback to managers, and all other management processes including planning, organizing, staffing, directing and coordinating are continuously reviewed and modified, where necessary.

 

NATURE OF MANAGEMENT

Management has been conceptualized as the social process by which managers of an enterprise integrate and coordinate its resources for the achievement of common, explicit goals. It has developed into a body of knowledge and a separate identifiable discipline during the past six decades. Practice of management as an art is, of course, as old as the organized human effort for the achievement of common goals.

Management has also acquired several characteristics of profession during recent times. Large and medium-sized enterprise in India and elsewhere are managed by professional managers – managers who have little or no share in the ownership of the enterprise and look upon management as a career.

 

Management as a Science: Development of management as a science is of recent origin, even though its practice is ages old. Fredrick W. Taylor was the first manager-theorist who made significant contributions to the development of management as a science. He used the scientific methods of analysis, observation and experimentation in the management of production function. A perceptive manager, as he was, he distilled certain fundamental principles and propounded the theory and principles of scientific management.

Another characteristic of science in management is that it uses the scientific methods of observation, experimentation and laboratory research. Management principles are firmly based on observed phenomena, and systematic classification and analysis of data. These analyses and study of observed phenomena are used for inferring cause-effect relationships between two or more variables. Generalizations about these relationships result in hypotheses. The hypotheses when tested and found to be true are called principles. These principles when applied to practical situations help the practitioner in describing and analyzing problems, solving problems and predicting the results.

Management as an art:

Just as an engineer uses the science of engineering while building a bridge, a manager uses the knowledge of management theory while performing his managerial functions. Engineering is a science; its application to the solution of practical problems is an art. Similarly, management as a body of knowledge and a discipline is a science; its application to the solution of organizational problems is an art.

Management as a Profession:

We often hear of professionalisation of management in our country. By a professional manager, we generally mean a manager who undertakes management as a career and is not interested in acquiring ownership share in the enterprise which he manages.

According to McFarland a profession possess the following characteristics: (i) a body of principles, techniques, skills, and specialized knowledge; (ii) formalized methods of acquiring training and experience; (iii) the establishment of a representative organization with professionalisation as its goal; (iv) the formation of ethical codes for the guidance of conduct; and (v) the charging of fees based on the nature of services.

 

MANAGEMENT VS. ADMINISTRATION

(i) Administration is concerned with the determination of policies and management with the implementation of policies. Thus, administration is a higher level function.

(ii) Management is a generic term and includes administration.

(iii) There is no distinction between the terms management and administration and they are used interchangeably. This controversy is discussed as under in three heads:

 (i) Administration is a Higher Level Function:

Oliver Shelden subscribed to the first viewpoint. According to him, "Administration is concerned with the determination of corporate policy, the coordination of finance, production and distribution, the settlement of the compass of the organization and the ultimate control of the executive. Management proper is concerned with the execution of policy within the limits set up by administration and the employment of the organization in the particular objects before it... Administration determines the organization; management uses it. Administration defines the goals; management strives towards it".

(ii) Management is a Generic Term :

The second viewpoint regards management as a generic term including administration. According to Brech, "Management is a social process entailing responsibility for the effective and economical planning and regulation of the operation of an enterprise in fulfillment of a given purpose or task. Administration is that part of management which is concerned with the installation and carrying out of the procedures by which the programme is laid down and communicated and the progress of activities is regulated and checked against plans".

(iii) Management and Administration are Synonymous:

The third viewpoint is that there is no distinction between the terms 'management' and 'administration'. Usage also provides no distinction between these terms. The term management is used for higher executive functions like determination of policies, planning, organizing, directing and controlling in the business circles, while the term administration is used for the same set of functions in the Government circles. So there is no difference between these two terms and they are often used interchangeably.

 

LEVELS OF MANAGEMENT

The real significance of levels is that they explain authority relationships in an organization. Considering the hierarchy of authority and responsibility, one can identify three levels of management namely:

(i)Top management of a company consists of owners/shareholders, Board of Directors, its Chairman, Managing Director, or the Chief Executive, or the General Manager or Executive Committee having key officers.

(ii)Middle management of a company consists of heads of functional departments viz. Purchase Manager, Production Manager, Marketing Manager, Financial controller, etc. and Divisional and Sectional Officers working under these Functional Heads.

(iii)Lower level or operative management of a company consists of Superintendents, Foremen, Supervisors, etc.

1. Top Management:

Top management is the ultimate source of authority and it lays down goals, policies and plans for the enterprise. It devotes more time on planning and coordinating functions. It is accountable to the owners of the business of the overall management. It is also described as the policy making group responsible for the overall direction and success of all company activities. The important functions of top management include:

(a) To establish the objectives or goals of the enterprise.

(b) To make policies and frame plans to attain the objectives laid.

(c) To set up an organizational frame work to conduct the operations as per plans.

(d) To assemble the resources of money, men, materials, machines and methods to put the plans into action.

(e) To exercise effective control of the operations.

(f) To provide overall leadership to the enterprise.

2. Middle Management:

The job of middle management is to implement the policies and plans framed by the top management. It serves as an essential link between the top management and the lower level or operative management. They are responsible to the top management for the functioning of their departments. They devote more time on the organization and motivation functions of management.

The following are the main functions of middle management:

(a) To interpret the policies chalked out by top management.

(b) To prepare the organizational set up in their own departments for fulfilling the objectives implied in various business policies.

(c) To recruit and select suitable operative and supervisory staff.

(d) To assign activities, duties and responsibilities for timely implementation of the plans.

(e) To compile all the instructions and issue them to supervisor under their control.

 3. Lower or operative management:

It is placed at the bottom of the hierarchy of management, and actual operations are the responsibility of this level of management. It consists of foreman, supervisors, sales officers, accounts officers and so on. They are in direct touch with the rank and file or workers. Their authority and responsibility is limited. They pass on the instructions of the middle management to workers.

 

MANAGERIAL SKILLS

A skill is an individual's ability to translate knowledge into action. Hence, it is manifested in an individual's performance. Skill is not necessarily inborn. It can be developed through practice and through relating learning to one's own personal experience and background. In order to be able to successfully discharge his roles, a manager should possess three major skills. These are conceptual skill, human relations skill and technical skill.

Conceptual skill deals with ideas, technical skill with things and human skill with people. While both conceptual and technical skills are needed for good decision-making, human skill in necessary for a good leader.

Technical skill is the manager's understanding of the nature of job that people under him have to perform. It refers to a person's knowledge and proficiency in any type of process or technique. In a production department this would mean an understanding of the technicalities of the process of production.

Human relations skill is the ability to interact effectively with people at all levels. This skill develops in the manager sufficient ability (a) to recognize the feelings and sentiments of others; (b) to judge the possible actions to, and outcomes of various courses of action he may undertake; and (c) to examine his own concepts and values which may enable him to develop more useful attitudes about himself. This type of skill remains consistently important for managers at all levels.

THE MANAGER AND HIS JOB

Management performs the functions of planning, organizing, staffing, directing and controlling for the accomplishment of organizational goals. Any person who performs these functions is a manager. The first line manager or supervisor or foreman is also a manager because he performs these functions. The difference between the functions of top, middle and lowest level management is that of degree.

Role Performed by Managers

1. Interpersonal Roles Figurehead:

In this role, every manager has to perform some duties of a ceremonial nature, such as greeting the touring dignitaries, attending the wedding of an employee, taking an important customer to lunch and so on.

Leader: As a leader, every manager must motivate and encourage his employees. He must also try to reconcile their individual needs with the goals of the organization.

Liaison: In this role of liaison, every manager must cultivate contacts outside his vertical chain of command to collect information useful for his organization.

2. Informational Roles

Monitor: As monitor, the manager has to perpetually scan his environment for information, interrogate his liaison contacts and his subordinates, and receive unsolicited information, much of it as result of the network of personal contacts he has developed.

Disseminator: In the role of a disseminator, the manager passes some of his privileged information directly to his subordinates who would otherwise have no access to it.

Spokesman: In this role, the manager informs and satisfies various groups and people who influence his organization. Thus, he advises shareholders about financial performance, assures consumer groups that the organization is fulfilling its social responsibilities and satisfies government that the origination is abiding by the law.

3. Decisional Roles

Entrepreneur: In this role, the manager constantly looks out for new ideas and seeks to improve his unit by adapting it to changing conditions in the environment.

Disturbance Handler: In this role, the manager has to work like a fire fighter. He must seek solutions of various unanticipated problems – a strike may loom large a major customer may go bankrupt; a supplier may renege on his contract, and so on.

Resource Allocator: In this role, the manager must divide work and delegate authority among his subordinates. He must decide who will get what.

Negotiator:

The manager has to spend considerable time in negotiations. Thus, the chairman of a company may negotiate with the union leaders a new strike issue; the foreman may negotiate with the workers a grievance problem, and so on.

 

Characteristics of Professional Managers

1. Managers are responsible and accountable: Managers are responsible for seeing that specific tasks are done successfully. They are usually evaluated on how well they arrange for these tasks to the accomplished. Managers are responsible for the actions of their subordinates. The success or failure of subordinates is a direct reflection of managers' success or failure.

2. Managers balance competing goals and set priorities: At any given time, the manager faces a number of organizational goals, problems and needs all of which compete for the manager's time and resources (both human and material). Because such resources are always limited, the manager must strike a balance between the various goals and needs.

3. Managers think analytically and conceptually: To be an analytical thinker, a manager must be able to break a problem down into its components, analyze those components and then come up with a feasible solution.

4. Managers are mediators: Organizations are made up of people, and people disagree or quarrel quite often. Disputes within a unit or organization can lower morale and productivity, and they may become so unpleasant or disruptive that competent employees decide to leave the organization.

5. Managers make difficult decisions: No organization runs smoothly all the time. There is almost no limit to the number and types of problems that may occur: financial difficulties, problems with employees, or differences of opinion concerning an organization policy, to name just a few. Managers are expected to come up with solutions to difficult problems and to follow through on their decisions even when doing so may be unpopular.

 

ADMINISTRATIVE THEORY OF MANAGEMENT

A body of principles of management has been developed by Henri Fayol, the father of modern management. Fayol wrote perceptibly on the basis of his practical experience as a manager. Although, he did not develop an integrated theory of management, his principles are surprisingly in tune with contemporary thinking in management theory. Fayol held that there is a single "administrative science", whose principles can be used in all management situations no matter what kind of organization was being managed. This earned him the title of "Universality". He, however, emphasized that his principles were not immutable laws but rules of thumb to be used as occasion demanded.

Fayol held that activities of an industrial enterprise can be grouped in six categories: (i) technical (production), (ii) commercial (buying, selling and exchange), (iii) financial (search for and optimum use of capital), (iv) security (protection of property and persons), (v) accounting (including statistics); and (vi) managerial. However, he devoted most of his attention to managerial activity. He developed the following principles underlying management of all kinds of organizations:

 

1. Authority and Responsibility are Related: Fayol held that authority flows from responsibility. Managers who exercise authority over others should assume responsibility for decisions as well as for results. He regarded authority as a corollary to responsibility.

2. Unity of Command: This principle holds that one employee should have only one boss and receive instructions from him only. Fayol observed that if this principle is violated authority will be undermined, discipline will be jeopardy, order will be disturbed and stability will be threatened. Dual command is a permanent source of conflict. 

3. Unity of Direction: This means that all managerial and operational activities which relate a distinct group with the same objective should be directed by "one head and one plan. According to Fayol, there should be, "one head and one plan for a group of activities having the same objective". It, however, does not mean that all decisions should be made at the top. It only means that all related activities should be directed by one person.

4. Scalar Chain of Command:  According to Fayol scalar chain is the chain of superiors ranging from the ultimate authority to the lowest ranks. The line of authority is the route followed via every link in the chain by all communication which start from or go to the ultimate authority.

5. Division of Work: This is the principle of specialization which, according to Fayol, applies to all kinds of work, managerial as well as technical. It helps a person to acquire an ability and accuracy with which he can do more and better work with the same effort

6. Discipline: Discipline is a sine qua non for the proper functioning of an organization. Members of an organization are required to perform their functions and conduct themselves in relation to others according to rules, norms and customs. According to Fayol, discipline can best be maintained by: (i) having good superiors at all levels; (ii) agreements (made either with the individual employees or with a union as the case may be) that are as clear and fair as possible; and (iii) penalties judiciously imposed.

7. Subordination of Individual Interest to General Interest: The interest of the organization is above the interests of the individual and the group. It can be achieved only when managers in high positions in the organization set an example of honesty, integrity, fairness and justice.

8. Remuneration: Employees should be paid fairly and equitably. Differentials in remuneration should be based on job differentials, in terms of qualities of the employee, application, responsibility, working conditions and difficulty of the job. It should also take into account factors like cost of living, general economic conditions, and demand for labour and economic state of the business.

9. Centralization: Fayol believed in centralisation. He, however, did not contemplate concentration of all decision making authority in the top management. He, however, held that centralisation and decentralization is a question of proportion. In a small firm with a limited number of employees, the owner-manager can give orders directly to everyone.

10. Order: Order, in the conception of Fayol, means right person on the right job and everything in its proper place. This kind of order depends on precise knowledge of human requirements and resources of the concern and a constant balance between these requirements and resources.

11. Equity: It means that subordinates should be treated with justice and kindliness. This is essential for eliciting their devotion and loyalty to the enterprise. It is, therefore the duty of the chief executive to instill a sense of equity throughout all levels of scalar chain.

12. Stability of Tenure of Personnel: The managerial policies should provide a sense of reasonable job security. The hiring and firing of personnel should depend not on the whims of the superiors but on the well-conceived personnel policies.

13. Initiative: It focuses on the ability, attitude and resourcefulness to act without prompting from others. Managers must create an environment which encourages their subordinates to take initiative and responsibility. Since it provides a sense of great satisfaction to intelligent employees, managers should sacrifice their personal vanity in order to encourage their subordinates to show initiative.

14. Esprit de Corps: Cohesiveness and team spirit should be encouraged among employees. It is one of the chief characteristics of organized activity that a number of people work together in close coopearation for the achievement of common goals. An environment should be created in the organization which will induce people to contribute to each other's efforts in such a way that the combined effort of all together promotes the achievement of the overall objectives of enterprise.

 

SIGNIFICANCE OF MANAGEMENT

Management is concerned with acquiring maximum prosperity with a minimum effort. Management is essential wherever group efforts are required to be directed towards achievement of common goals. In this management conscious age, the significance of management can hardly be over emphasized. It is said that, anything minus management amounts to nothing. Koontz and O' Donnel have rightly observed "there is no more important area of human activity than management since its task is that of getting things done through others."

The significance of management in business activities is relatively greater. The inputs of labour, capital and raw material never become productive without the catalyst of management. It is now widely recognized that management is an important factor of growth of any country. The following points further highlight the significance of management:

1. Achievements of group goals: Management makes group efforts more effective. The group as a whole cannot realize its objectives unless and until there is mutual co-operation and co-ordination among the members of the group. Management creates team work and team spirit in an organization by developing a sound organization structure.

2. Optimum utilization of resources: Management always concentrates on achieving the objectives of the enterprise. The available resources of production are put to use in such a way that all sort of wastage and inefficiencies are reduced to a minimum. Workers are motivated to put in their best performance by the inspiring leadership.

3. Minimization of cost: In the modern era of intense competition, every business enterprise must minimise the cost of production and distribution. Only those concerns can survive in the market, which can produce goods of better quality at the minimum cost. A study of the principles of management helps in knowing certain techniques used for reducing costs.

4. Change and growth: A business enterprise operates in a constantly changing environment. Changes in business environment create uncertainties and risk and also produce opportunities for growth. An enterprise has to change and adjust itself in the ever changing environment. Sound management moulds not only the enterprise but also alters the environment itself to ensure the success of the business.

5. Efficient and smooth running of business: Management ensures efficient and smooth running of business, through better planning, sound organization and effective control of the various factors of production.

6. Higher profits: Profits can be enhanced in any enterprise either by increasing the sales revenue or reducing costs. To increase the sales revenue is beyond the control of an enterprise. Management by decreasing costs increases its profits and thus provides opportunities for future growth and development.

7. Provide innovation: Management gives new ideas, imagination and visions to an enterprise.

8. Social benefits: Management is useful not only to the business firms but to the society as a whole. It improves the standard of living of the people through higher production and more efficient use of scarce resources. By establishing cordial relations between different social groups, management promotes peace and prosperity in society.

9. Useful for developing countries: Management has to play a more important role in developing countries, like India. In such countries, the productivity is low and the resources are limited. It has been rightly observed, "There are no under-developed countries. They are only under-managed ones".

10. Sound organization structure: Management establishes proper organization structure and avoids conflict between the superiors and subordinates. This helps in the development of spirit of cooperation and mutual understanding, and a congenial environment is provided in the organization.

 

EVOLUTION OF MANAGEMENT THOUGHTS

CONTRIBUTION OF LEADING THINKERS

1. Classical School: The classical development of management thoughts can be divided into- the scientific management, the organizational management, the behavioural management and the quantitative management. The first two (scientific management school and organizational) emerged in late 1800s and early 1900s were based on the management belief that people were rational, economic creatures choose a course of action that provide the greatest economic gain. These schools of management thoughts are explained as below:

(A) Scientific Management School: Scientific management means application of the scientific methods to the problem of management. It conducts a business or affairs by standards established by facts or truth gained through systematic observation, experiments, or reasoning. The followings individuals contribute in development of scientific management school of management thoughts. They dedicated to the increase in efficiency of labour by the management of the workers in the organization’s technical core. They are:

I. Charles Babbage (1792-1871): He was professor of mathematics at Cambridge University from 1828 to 1839. He concentrated on developing the efficiencies of labour production. He, like Adam Smith, was a proponent of the specialization of labour, and he applied mathematics to the efficient use of both production materials and facilities. He wrote nine books and over 70 papers on mathematics, science and philosophy. He advocated that the managers should conduct time studies data to establish work standards for anticipated work performance levels and to reward the workers with bonuses to the extent by which they exceed their standards. His best known book is ‘On the Economy of Machinary and Manufacturers’ published in 1832. He visited many factories in England and France and he found that manufacturers were totally unscientific and most of their work is guess work. He perceived that methods of science and mathematics could be applied to the operations of factories. His main contributions are as follows:

·         He stressed the importance of division of and assignment to labour on the basis of skill.

·         He recommended profit-sharing programs in an effort to foster harmonious management-labour relations.

·         He stressed the means of determining the feasibility of replacing manual operations with machines.

II. Fredrick W. Taylor (1856-1915): He is known as ‘father of scientific management’. His ideas about management grew out of his wide-ranging experience in three companies: Midvale Steel Works, Simonds Rolling Mills and Bethlehem Steel Co. As an engineer and consultant, Taylor observed and reported on what he found to be inexcusably inefficient work practices, especially in the steel industry. Taylor believed that workers output was only about one-third of what was possible. Therefore, he set out to correct the situation by applying scientific methods.

Taylor’s philosophy and ideas are given in his book, ‘Principles of Scientific Management’ published in 1911. Taylor concluded that scientific management involves a completer mental revolution on the part of both workers and management, without this mental revolution scientific management does not exist.

III. Henry Gantt (1861-1919): He was a consulting engineer who specialized in control system for shop scheduling. He sought to increase workers efficiency through scientific investigation. He developed the Gantt Chart  that provides a graphic representation of the flow of the work required to complete a given task. The chart represents each planned stage of work, showing both scheduled times and actual times. Gantt Charts were used by managers as a scheduling device for planning and controlling work. Gantt devised an incentive system that gave workers a bonus for completing their job in less time than the allowed standards. His bonus systems were similar to the modern gain sharing techniques whereby employees are motivated to higher levels of performance by the potential of sharing in the profit generated. In doing so, Gantt expanded the scope of scientific management to encompass the work of managers as well as that of operatives.

IV. Frank (1868-1924) and Lillian (1878-1972) Gilbreth: Frank Gilbreth, a construction contractor by back ground, gave up his contracting career in 1912 to study scientific management after hearing Taylor’s speak at a professional meeting. Along with his wife Lillian, a psychologist, he studied work arrangements to eliminate wasteful hand-body-motion. Frank specialized in research that had a dramatic impact on medical surgery and, through his time and motion findings, surgeons saved many lives. Lillian is known as ‘first lady of management’ and devoted most of her research to the human side of management. Frank Gilbreth is probably best known for his experiments in reducing the number of motions in bricklaying.

 

(B) Organizational School: The organizational school of management placed emphasis on the development of management principles for managing the complete organization. The contributors of organizational schools are:

I Henri Fayol (1841-1925): was a Frenchman with considerable executive experience who focused his research on the things that managers do. He wrote during the same period Taylor did. Taylor was a scientist and he was managing director of a large French coal-mining firm. He was the first to envisage a functional process approach to the practice of management. His was a functional approach because it defined the functions that must be performed by managers. It was also a process approach because he conceptualized the managerial job in a series of stages such as planning, organizing and controlling. According to Fayol, all managerial tasks could be classified into one of the following six groups:

Ø  Technical (related to production);

Ø  Commercial (buying, selling and exchange);

Ø  Financial (search for capital and its optimum use);

Ø  Security (protection for property and person);

Ø  Accounting (recording and taking stock of costs, profits, and liabilities, keeping balance sheets, and compiling statistics);

Ø  Managerial (planning, organizing, commanding, coordinating and control);

 

He pointed out that these activities exist in every organization. He focused his work on the administrative or managerial activities and developed the following definition:

Ø  Planning meant developing a course of action that would help the organization achieve its objectives.

Ø  Organizing meant mobilizing the employees and other resources of the organization in accordance with the plan.

Ø  Commanding meant directing the employees and getting the job done.

Ø  Coordinating meant achieving harmony among the various activities.

Ø  Controlling meant monitoring performance to ensure that the plan is properly followed.

 

II Max Weber (1864-1920): He was a German sociologist. Writing in the early 1900s, Weber developed a theory of authority structures and described organizational activities on the basis of authority relations. He described an ideal type of organization that he called a bureaucracy, a form of organization characterized by division of labour, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships. Weber recognized that this ideal bureaucracy didn’t exist in reality. He used it as a basis for theorizing about work and the way that work could be done in large groups. His theory became the model structural design for many of today’s large organizations.

 

Scientific Management Approach

The impetus for the scientific management approach came from the first industrial revolution. Because it brought about such an extraordinary mechanization of industry, this revolution necessitated the development of new management principles and practices. The concept of scientific management was introduced by Frederick Winslow Taylor in USA in the beginning of 20th century. He defined scientific management as,” Scientific management is concerned with knowing exactly what you want men to do and then see in that they do it in the best and cheapest way”.

Elements and Tools of Scientific Management: The features of various experiments conducted by Taylor are as follows:

• Separation of Planning and doing: Taylor emphasized the separation of planning aspects from actual doing of the work. The planning should be left to the supervisor and the workers should emphasize on operational work.

• Functional Foremanship: Separation of planning from doing resulted into development of supervision system that could take planning work adequately besides keeping supervision on workers. Thus, Taylor evolved the concept of functional foremanship based on specialization of functions.

• Job Analysis: It is undertaken to find out the best way of doing things. The best way of doing a job is one which requires the least movement consequently less time and cost.

• Standardization: Standardization should be maintained in respect of instruments and tools, period of work, amount of work, working conditions, cost of production etc.

• Scientific Selection and Training of Workers: Taylor has suggested that the workers should be selected on scientific basis taking into account their education, work experience, aptitudes, physical strength etc.

• Financial Incentives: Financial incentives can motivate workers to put in their maximum efforts. Thus, monetary (bonus, compensation) incentives and non monetary (promotion, upgradation) incentives should be provided to employees.

 

Criticism of Scientific Management: The main grounds of criticism are given below:

·         Taylor advocated the concept of functional foremanship to bring about specialization in the organization. But this is not feasible in practice as a worker can’t carry out instructions from eight foremen.

·         Workers were hired on a first-come, first-hired basis without due concern for workers ability or skills.

·         Scientific management is production oriented as it concentrates too much on the technical aspects of work and undermines the human factors in industry. It resulted in monotony of job, loss of initiative, over speeding workers, wagereductions etc.

·         Training was haphazard at best, with only minimal use of basic apprentice system.

·         Tasks were accomplished by general rule of thumb without standard times, methods or motion.

·         Managers worked side-by-side with the workers, often ignoring such basic managerial function of planning and organizing.

 

Administrative Approach to Management

The advocates of this school perceive management as a process involving certain functions such as planning, organizing, directing and controlling. That’s why it is called as ‘functional approach’ or ‘management process’ approach. Fayol’s contributions were first published in book form titled ‘Administration Industrielle at Generale’ in French Language, in 1916. He defined management in terms of certain functions and then laid down fourteen principles of management which according to him have universal applicability. Thus, he was a pioneer in the field of management education. In brief, Fayol’s views on management command acceptability even today because they are much in tune with the requirements of management in the present day world.

Fayol’s General Principles of Management

• Division of Work: The object of division of work is to produce more and better work with the same effort. It is accomplished through reduction in the number of tasks to which attention and effort must be directed.

• Authority and Responsibility: Authority is defined as ‘the right to command and the power to make oneself obeyed’. Responsibility coexists with authority and is its other side. Fayol made a distinction between official authority and personal authority, the latter stemming from the manager’s own intelligence, integrity, experience, personality, knowledge and skills.

• Discipline: It implies respect for agreements designed to secure obedience. It must prevail throughout an organization to ensure its smooth functioning. Discipline requires clear and fair agreements, good supervision and judicious application of penalties.

• Unity of Command: Every employee should receive orders and instruction from only one superior and a subordinate should be accountable to only one superior.

• Unity of Direction: Each group of activities having one objective should be unified by having one plan and one head.

• Subordination of Individual to General Interest: The interest of any one employee or group of employees should not take precedence over the interests of the organization as a whole.

• Remuneration of Personnel: The amount of remuneration and the methods of payment should be just and fair and should provide maximum possible satisfaction to both employees and employers.

• Centralisation: It refers to the degree to which subordinates are involved in decision making. Whether decision making is centralized (to management) or decentralized (to subordinates) is a question of proper proportion. The task is to find the optimum degree of centralization for each situation.

• Scalar Chain: The scalar chain is the chain of superiors ranging from the ultimate authority to the lowest ranks. Communication should follow this chain. However, if following the chain creates delays, cross-communications can be followed if agreed to by all parties and superiors are kept informed.

• Order: It is a rational arrangement for things and people. Fayol emphasized both material order and human order. In material order, there should be a place for everything and everything should be in its proper place. In human order, there should be an appointed place for everyone and everyone should be in his and her appointed place.

• Equity: Managers should be kind and fair to their subordinates. The application of equity requires good sense, experience and humanistic attitude for soliciting loyalty and devotion from subordinates.

• Stability of Tenure: High employee turnover is inefficient. Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies.

• Initiative: Subordinates should be provided with an opportunity to show their initiative as a way to increase their skills and to inculcate a sense of participation.

• Espirit de Corps: Union is strength, and it comes from the harmony and mutual understanding of the personnel. Management should not follow the policy of ‘divide and rule’. Rather it should strive to maintain team spirit and co-operation among employees so that they can work together as a team for the accomplishment of common objectives.

Criticism: Fayol’s work has been criticized on the following grounds:

Ø  His theory is said to be too formal. There is no single classification of managerial functions acceptable to all the functional theorists. There is also lack of unanimity about the various terms such as management, administration etc.

Ø  He did not pay adequate attention to workers.

Ø  The fundamentalists considered their principles to be universal in nature. But many of the principles have failed to deliver the desired results in certain situations.

Ø  There is a vagueness and superficiality about some of his terms and definition.

 

 

 

 

 

 

Human Relation Approach to Management

The criticism of the Scientific and Administrative Management as advocated by Taylor and Fayol, respectively, gave birth to Human Relation Approach. The behavioural scientists criticized the early management approaches for their insensitiveness to the human side of organization. The behavioural scientists did not view the employees mechanically in work situation, but tried to show that the employees not only have economic needs but also social and psychological needs like need for recognition, achievement, social contact, freedom, and respect.

Human relations school regards business organization as a psycho-social system.

Elton Mayo of Harvard and his associates conducted a famous study on human behaviour at the Hawthorne plant of the Western Electric Company and this study formed the foundation of this school of management thoughts. The basic hypotheses of this study as well as the basic propositions of the Human Relation Approach are the following:

Ø  The business organization is a social system.

Ø  The employees not only have economic needs but also psychological needs and social needs, which are required to be served properly to motivate them.

Ø  Employees prefer self-control and self-direction.

Ø  Employee oriented democratic participative style of management is more effective than mechanistic task oriented management style.

Ø  The informal group should be recognized and officially supported.

The human relations approach is concerned with recognition of the importance of human element in organizations. It revealed the importance f social and psychological factors in determining worker’s productivity and satisfaction. It is instrumental in creating a new image of man and the work place. However, this approach also did not go without criticism. It was criticized that the approach laid heavy emphasis on the human side as against the organizational needs. However, the contribution of this approach lies in the fact that it advises managers to attach importance to the human side of an organization.