Principles

Of
Management

Aashiq

Gems b school
Contents :

Acknowledgement

Abstract

CENTRALISATION AND DECENTRALISATION

> Control of Personnel

> Motivation of Personnel

> Training of Personals

> Screening and selection of managerial personnel

> Sources of recruits of selection of managerial personnel

> Selection of Managerial Personnel

> Managerial job evaluation

> Managerial job descriptions and man specifications

> Analysis of Managerial Jobs

> Nature and importance or staffing

> Role of Functional Manager

> Matrix Organization

> Characteristics of committee organization

> Committee Organization

> Advantages and Disadvantages of functional organization

> Line and Staff Organization

> Advantages and Disadvantages of Line Organization

CONCEPT OF MANAGEMENT

> Systems Approach of Management Thought

> Human relations Approach of Management Thought

> Contribution of Henry Fayol of Classical Approach

> Harrington Emerson Contribution of Classical Approach

> Frank Gilbert Contribution of Classical Approach

> Taylor's Principles of Classical Approach

> Classical Approach of Management Thought

> Pre-Scientific Management

> Early Contribution

> Classification of Management Thought

> Development of management thought

> Managerial job in business

> Functions of management

> Fayol's principles of management

>
ACKNOWLEDGEMENT :
The Project work was carried out under the remarkable guidance of Dr. Lakshman
Lecturer , Great Eastern Management School. I am grateful for his guidance, valuable
Suggestions and for the constant encouragement and co-operation.
ABSTRACT :

The present study examines centralization and decentralization and concept of management
Subjective well being among Principles of management.
 Chapter 1 :

CENTRALISATION AND DECENTRALISATION

Introduction :

The terms centralization and decentralization, however, are used to give various connotations.
The semantic variations range from administrative, physical and functional centralization to
decentralization.

At the same time, decentralization is taken to mean separation of facilities, a type of

organization structure, and delegation of decision-making power. Its more common use in
management literature, however, shows extent of delegation of authority. Thus, centralization
can be defined as the delegation of authority to the lowest levels of management.

Centralization and decentralization describe the manner in which decision-making

responsibilities are divided among managers at different levels of managerial hierarchy.
Decentralization is different from delegation of authority. Delegation simply refers to the
entrustment of responsibility and authority from one individual to another, decentralization refers
to the systematic delegation of authority in an organization-wide context. Thus delegation is said
to be the process and decentralization as the result of process. There can neither be absolute
centralization nor absolute decentralization. The concepts of centralization and decentralization
are nor absolute decentralization. The concepts of centralization and decentralization are two
extreme points in matters of distributing authority in the organization structure, and in between
these two points, there may be a continuum of authority distribution

Control of Personnel

To control managers and their activities, the managerial performance is assessed in terms of
established standards, and any failing from the standard is assumed to be the result of
established standards, and any failing from the standard is assumed to be the result of faulty
decisions made by some managers.

This system of remote and indirect control fails to trace out the responsible managers in many
cases and to prevent recurrence of undesirable results in the organization. In the first place
standards cannot be established for measuring all activities of enterprise. Secondly, poor and
unsatisfactory performance may arise from some extraneous factors behind which managers
can take shelter to evade their unsatisfactory work; many minor deviations from the standard
are ignored as a matter of practical expediency. Fourthly, where undesirable performances
stem from the faulty decisions of top managers, no precise steps can be taken to ensure their
activities.

Motivation of Personnel

Motivation must begin with the managers who, in turn, are expected to motivate other
employees of the enterprise.

To motivate the managers, their basic wants and desires are to be satisfied by the enterprise.
Some of the important wants of the management personnel are: (a) opportunity for
development; (b) satisfactory spirit of the organization grounded in high standards of justice,
integrity and conduct; (c) status prestige and respect for the manager in the enterprise; (d)
freedom of operation within the framework of a clearly defined character of right, duties and
obligations; and (e) satisfying the rewarding job. If these wants are not fulfilled, management
members are bound to develop frustration, discontent, and even bitterness in course of time,
and as a result their performance will come down to safe mediocrity.

There are three vital areas in which managerial wants are highlighted by decisions for them.
First, placement decisions with respect to mangers should be made by systematic appraisal of
the manager’s performance, ability, potentiality and aptitude. Secondly, promotion decisions
become crucial to manger's motivation. Promotions must always be based upon measured
performance and proven ability. Thirdly, remuneration of mangers should be high enough to
give the necessary status and prestige in the organization. In respect of salary, what matters
more is not the absolute amount of remuneration but salary differentials between managers.

Training of Personals
Training may be given in a variety of way, partly within the organization and partly through
study courses at outside centers.

The training methods are to be specific to suit the needs of both candidates and the enterprise.
Combination of two or more methods has been found to yield satisfactory results. Some of the
important methods are job assignment, job rotation, internal coaching, study courses, case
studies, training positional; task force on special assignment, committees and junior boards,
conferences and seminar. Methods of training vary according to the three distinct levels of
management, viz., supervisory training, junior-executive training and senior executive training.

By job assignment, trainees are made familiar with the pattern of duties that they are going to
undertake and with the problems and situations that they are to cope with. Necessary
guidance an counseling are provided by senior managers through answering queries, making
suggestions and giving explanations in all phases of the job.

Under job rotation, a trainee is experienced in different activities so as to enrich his knowledge,
vision and capacity. The number of jobs and their sequence carefully chosen by senior
mangers, and the trainees are kept at each job for a fairly long period so that they can get into
the techniques and practices utilized by the enterprise to reach its objectives.

Internal coaching is provided by the trainee's superior to make him familiar with policies and-
procedures relating to specific work. In addition, management principles and techniques, in
general terms, are brought within the knowledge to trainees who are deficient techniques, in
general terms, are brought within the knowledge to trainees who are deficient in this respect. A
series of written instructions is used for management teaching within the enterprise.

Study courses are arranged with a formally organised institution which imparts training in
various aspects of the management study. As the management skill is in rudimentary in our
country special study appear to be more important for upgrading the management
competence.

Case studies provide sample though-provoking materials to trainees for the purpose of
increasing their analytical ability, they offer also an opportunity to master the art of utilizing
theoretical knowledge for practical purpose, there by bridging the gap between theory and
practice.
Committees and junior boards are constituted by some selected managers of the middle-level
group in order to prepare candidates for senior-executive positions.

Screening and selection of managerial personnel

The actual selection is based on the appraisal of three basic factors-ability, personality an
social traits.

Ability traits are composed of intelligence, education, training and experience of the candidate.
Personality traits centre round the power to get along with people and include the attributes of
firmness, determination, stability and leadership. Under social traits, the candidate's economic
position, community status, willingness to travel and radiness to shift residence to other place
are appraised. These three basic traits are examined by means of biographical records,
psychological test are put to a further study and observation at the interview stage.

Sources of recruits of selection of managerial personnel

There are three basic sources, from which managerial personnel can be obtained, viz.,
candidates from other companies, persons promoted from within the company, and fresh
graduate’s universities and technical institutions.

The first source is tapped sometime for securing managers of special ability in connection with
manufacturing and marketing activities. To tone up the
management efficiency an outsider is occasionally taken in at the top level for infusing new
blood, vigor and drive in the enterprise. The second source is much to the liking of employees
and acts as a strong incentive to satisfactory work performance. Most of the higher level jobs
are filled from promotions within the company. The third source is becoming popular with large
companies which have adopted programmes for management development. Fresh graduates
with wider outlook and satisfactory background knowledge prove to be excellent materials for
developing them into successful mangers.

Selection of Managerial Personnel

Selection of managerial personnel requires considerations of the sources of recruits and the
screening method applied
1. Sources of recruits
2. Screening and selection
Managerial job evaluation
Evaluation of managerial jobs is concerned with the ranking or gradation of such in terms of
known-how required, problems encounted and accountability involved.

The comparative worth of different jobs is indicated in respect of remuneration, status, prestige,
office facilities and other like thing. There are two usual methods for evaluating managerial jobs,
viz., (a) comparison method, and (b) job factor method. Under the comparison method, the
managerial jobs at different levels are compared to some key positions like the chief executive,
the accountant and the factory superintendent both within and outside the company but applying
subjective judgment, the job differences are expressed in salary differentials between
managers. Under the job factor method, the pertinents job factors like education, training,l
experience, responsibility and work conditions are assigned individual weights and points for
comparing managerial jobs on the basis of aggregate points these point-rating systems are
mostly used for lower-level jobs with a view to fixing their salary scales and levels.

Managerial job descriptions and man specifications

Position or job descriptions involve an analysis of responsibilities and duties associated with
various managerial positions in the organisation structure.

Job descriptions are spelled out in greater details so as to find out the exact scope of varying
jobs in the enterprise. Once job descriptions are prepared, an assessment of future managerial
requirements can be made from known retirements, projected expansions and anticipated
changes.

Analysis of Managerial Jobs

Staffing of executive personnel must be preceded by an analysis of managerial jobs.
Unless the content or the make up of managerial job is known, recruitment of managerial
personnel is not possible. The results of job analysis are usually indicated by the preparation of
position descriptions or job descriptions.

1. Managerial job descriptions and man specifications

2. Managerial job evaluation

Nature and importance or staffing

The systematic approach to the problem of selecting, training, motivating an retaining good
personnel in any organisation is referred to as staffing. The job of staffing is concerned with
recruitment and development of managers and their maintenance in a high spirit

It entails management manpower planning with a view to recruiting and training executives.
Also, it calls for the satisfaction of managerial wants through the provision of individual
motivation and the introduction of self-control on the part of mangers.

Management manpower planning involves an estimate of the present and future requirements
of executive positions in the enterprise. The demand for mangers has steadily grown in all
progressive and expanding enterprises during the past several decades. In addition to this
demand, existing managers require constant replenishment because of their retirement,
resignation, death or oven dismisal in some cases. Accordingly, management manpower
planning must be undertaken on a continuous basis. But without studying the organisation
structure and its job requirements, the managerial positions can neither be planned nor filled.
To make an effective manpower planning, organisation planning must begone through to find
out the exact time when a certain number and type of managerial personnel are required in the
enterprise.

Role of Functional Manager

A functional manager is charged with managing a functional entity in support of the system of
projects that are flowing through the organisation

In this context, the role of a functional manager is as follows:

1. A functional manager is responsible for one of the principle elements of the organisation,
such as production, marketing, finance, etc. He has to provide functional services in his
disciplines and for supporting all; the projects in the organisation.

2. The functional manger has line authority over this personnel in the project. He is
responsible through the chain of command for his department. A functional manager tends to
concentrate on the activities of his discipline.

3. Each functional manger tends to emphasise his own function. Sometimes, this tendency
creates conflict in the organisation. Since the responsibility of the functional manager is
limited to his area, he seeks to make that area as efficient and effective as possible, often
without regard to the effect of his function on others or on the basic task which the
organisation has to perform.

Matrix Organisation

Matrix organisation is the realization of a two-dimensional organisation which emanates

directly from the two dimensions of authority

Two complementary organisations- the pure project organisation and functional organisation-
are merged to create the matrix organisation. Sometimes matrix and project organisations are
considered as the same because of the same nature of authority relationships. For taking and
managing projects, separate identifiable units are created. In pure project organisation,
complete responsibilities for the task as well as all the resources needed for its
accomplishment are usually assigned to one project manager. In large projects, the
organisational units for projects resemble a regular division, relatively independent of any
other division. In matrix organisation, the project manager is usually not assigned complete
responsibility for resources. Instead, he shares them with the rest of the orgnaisation. Pure
project organisation is most effective when an organisation is dealing with a small number of
major projects. When the organisation has a variety of projects, ranging from large to small, it
is often desirable to use a matrix organisation. For programmes of major magnitudes, a
project type of management may be established, but the rest of the operations may be
carried out by the functional organisation. In such a case, there are well-established
functional departments which have skills and capabilities for preformance of a variety of
programmes. Essentially programmes flow through the functional complex and receive the
services of these specialised departments.

In matrix orgnaisation, a project manager is appointed to co-ordinate the activities of the

project. Personnel are drawn from their respective administrative department. Upon
completion of the project, these people may return to their original departments for further
reassignment. In the functioning of the matrix organisation, the unity of command principle is
violated. Each functional staff has two bosses-his administrative head and his project
manager.

Characteristics of committee organisation

On the basic of the definition, following broad characteristics of a committee any be spelled
out.

1. A committee is a group of persons there should be at least two persons. There is no

limitation on the maximum number of persons. However, if number of persons rises above
seven, communication tends to become centralized because committee members do not have
adequate opportunity to communicate directly with one another.

2. A committee is charged with dealing with specific problems and it cannot go in for actions in
all sphere of activities. There are strictly defined jurisdictions within which a committee is
expected to justify its existence. Beyond these limited spheres a committee is doomed to fail
as an organ of action.

3. Members of the committee have authority to go into details of the problems. This authority
usually is expressed in terms of one vote for each member.
4. A committee have the authority either to take a final decision or it may merely decision or it
may merely deliberate on problems without authority to decide.

5. A committee may be constituted at any level of organization. Moreover, the members of a

committee may be drawn from various levels. Usually in such a case, all the members of the
committee enjoy equal authority.

Committee Organisation

Organisation committees are quite popular at different levels for various functions. The board
of directors is a committee.

Similarly, there may be executive committee, finance committee, audit committee, bonus
committee, planning committee, grievance committee, etc. Exact definition of a committee is
difficult because there are many different kinds of committees and the concept of a committee
may be defined as a group of persons in an organization to another. However, a committee
may be defined as a group of persons in an organization for taking or recommending certain
decisions.

Advantages and Disadvantages of functional organization

The main advantages of functional organisation are the greater degree of specialisation,
increase in operational efficiency, economic flexibility, co-ordination within the function, and
projecting of outstanding skills.

The major drawbacks are the problems and difficulties of multiple command, indifferent
approach of managers, problems of co-ordination, and lack of well-defined responsibility.

Line and Staff Organisation

Line and staff organisation refers to a pattern in which staff specialists advice line managers
to perform their duties.
When the work of an executive increase, its performance requires the services of specialists
which he himself cannot provide because of his limited capabilities on these fronts.
Such advice is provided to line managers by staff personnel who are generally specialists in
their fields. The staff positions or departments are of purely advisory nature. They have right
to recommend, but have no authority to enforce their preference on other departments.

In actual practice, sometimes it is difficult to determine which departments are line or staff. The
problem can be usually solved by classifying activities within an organisation in two types: (i)
that which is objective (direct) in its contribution. to the organisations' overall objectives, and
(ii) that which is objective (indirect) in the contribution to the organisations' The departments
performing former group of activities are line ones, and those performing latter group of
activities are staff ones.

Advantages and Disadvantages of Line Organisation

The main advantages of line organisation are it is simplicity, clear authority and responsibility,
unified control, quick decisions, co-ordination, and discipline.
The disadvantages include no scope for specialisation, rigidity, unitary system, problems in
departmentation and red-tapism. In the modern business world. Its scope is limited only to
small organisations. In a large organisation, where high premium is placed on specialisation,
this form is totally unsuitable.

Chapter 2 :
CONCEPT OF MANAGEMENT
Intoduction :

Management is an activity process composed of some basic functions, for getting the objective
of any enterprise accomplished through the efforts of its personnel. Wherever and whenever
objectives are to be achieved through organized and co-operative endeavour, management
becomes essential for directing and unifying the group efforts towards a common purpose. As
human aims and beliefs are mostly realized through the establishment of diverse associations in
our society, management is universally needed for operating all such organisation.
Management, viewed as a functional concept, is of equal necessity to the educational religious,
charitable and other non-business institutions as it is required for business Organizations.
Furthermore, the greatest and the most comprehensive of our social organizations, viz., the
Government of all types needs management as others require, perhaps more than all other
social organizations. That the Government without requires a management process has been
apply pointed out in the statement: A Government without good management is a house built on
sand. Put in short, management is an essential accompaniment of all social organizations, and
it is to be found everywhere as a distinct, separate and dominate activity. The nature and
significance of the activity do not change even if it is called administration in some social in
situations and management in others.

Management is the only activating element of any enterprise for getting things done through it
personnel. The job of management is to provide dynamic leadership that combines the
productive but passive resources into a fruitful organization. Not only does it adapt itself to
existing opportunities, restrictions and pressures, but it exercises a positive influence as well as
to make the future events favourable for the enterprise. With a view to getting the expected
results and seeing that things happen as they should, management has to become a creator of
the economy rather then its creature. Management forges ahead through innovations in
operating situation and the adoptian of far-sighted planning. It visualize the future, initiates
changes and achieves the purpose of any enterprise under highly dynamic conditions. As an
activity process, management plans the future course of action, organizes people and their
work, directs the operation an controls the performance, and thus ensures the accomplishment
of enterprise objectives. Adaptations and innovations permeate through each of these phases of
the management process.

Management acts as a creative and invigorating force in the organisation. It creates result that is
bigger than the sum total of efforts put in by the group. Management adds real plus value to the
operation of any enterprise by enlisting as little extra value out of each person. It provides new
ideas, imaginations and visions to the group working an integrates its efforts in such a manner
as to account for better results. It ensures a smooth flow of work in the organization by focusing
on strong points, neutralizing weak link, overcoming difficulties and establishing team spirit.
Management strives to secure the maximum result by the use of minimum resources.

Systems Approach of Management Thought

The systems approach, also labeled as modern theory of management, is a relatively new
approach though neither the terms management and organization nor the system is a new
concept.

Over the past tow decades or so the systems approach has emerged as vigorous and lively.
Now, we are bombarded with reference to system in various walks of life. Everything is a
system and the system thinking is the by work. We have entered a period that forces man to
find more accurate answers to questions involving the 'wholeness' of an operation. This age of
synthesis forces management to think out in new and different ways- as suggested by the
systems approach. In this view the whole is not merely a combination of the system but distinct
from it s parts. Before analyzing how an organization functions as a system, it is imperative to
analyze the concept, and working of the system.

A system is defined as the assemblage of things connected or interdependent, so as to form a

complex unity; a whole composed of parts in orderly arrangement according to some scheme or
plan. This has been defined as 'an organized' or complex whole; an assemblage or combination
of things or parts forming a complex unitary whole.

Various authors on systems approach have attempted to develop a generalized theory which
can be applied to any system-physical, biological, or social. They have termed is as General
Systems Theory (GST). The theory is concerned with developing a systematic, theoretical
framework for describing the empirical world. Buckley describes its role as such, 'A which
functions as a whole by virtue of the inter-dependence of its parts I called a system and the
method which aims at discovering how this is brought about in widest variety of systems has
been called General Systems Theory. General Systems Theory seeks to classify systems by
the way their components are organized and to derive the laws, or typical patterns of behavior,
for the different classes of systems singled but by the taxonomy.

The first basic stage in system management is the determination of organization system. Since
organization is a deliberate and purposive creations, the basic objectives of the organization
should be determined before its creation. Determination of objectives is important because
every attempt is directed towards realization of these objectives. In the second stage, each
element of the organization is arranged in some combination to provide desired results.
Systems design provides the overall framework for implementing systems concepts. It includes
strategic and comprehensive planning for the entire organizational system, as well as the
development of operation and facilitating sun-system. The third stage-operation and control-
refers to conversion of inputs into outputs. Inputs may be in the form of information, materials,
and energy. The inputs are allocated to plan, though it is possible to eliminate parts of the
planning required during operations by designing system with predetermined input allocation
structuring the system to operate in a specified fashion and with more predictable results.
Operation of the system requires some sort of control, that is, a mechanism for output or related
characteristics, comparing he measurement with the standard, and activating the unit to adjust
inputs to correct the deficiency. This is necessary to maintain the equilibrium of the system near
the ideal point. The fourth stage pertains to review and evaluation, that is, to ascertain how well
the system has performed. This is different from the control in the sense that control refers to
operating efficiency, while the concept of review and evaluation is more comprehensive, and
always relates the functioning of the system to its objectives. The review and evaluation occur at
periodic intervals during the life cycle of a system and lead to design changes in the present
system or recommendations for changes which may be operated in future systems.
Human relations Approach of Management Thought

The classical approach which focused attention on the mechanical an physiological variables
of organizational functioning was tested on the field to increase the efficiency of organizations.

Surprisingly, positive aspects of these variables could not evoke positive response in work
behavior, and researchers tried to investigate the reasons for human behavior at the work.
They discovered that the real cause of human behavior was something more than
physiological variables. Such findings generated a new phenomenon about the human
behavior and focused attention of the human beings in the organizations. As such, this new
approach his been called 'human approach of management'.

Even in the writings of classical approach, notably, Taylor, Fayol, Henry Gantt, Follet, Urwick,
and others, the human element in the organisation was recognized, but they emphasized it
very little. The human relations approach was born out of reaction to classical approach and
during the last four decades, a lot of literature on human relations had been developed. The
essence of the human relations contributions is contained in two points; (I) organizational
situation should be viewed in social terms as well as in economic and technical terms, and (ii)
the social process of group behavior can be understood in terms of clinical method analogous
to the doctor's diagnosis of the human organism. Among human relations approach, there are
many contributions and many more researches are being carried on. These include
contributions form famous 'Hawthorne Experiments', many sociologists-Bakke , Selznic,
Homans , dubin , and Dalton; many psychologists-McGregor, Likert, Argyris, March and
Simon, Leavitt, Blake, Sayles, Brown, etc. There will be relatively lengthy discussion of the
results and implications of the Hawthorne studies because of their historical importance to the
behavioral approach to the analysis of management problems. In fact, for the first time, an
intensive and systematic analysis of human factor in organizations was made in the form of
Hawthorne experiments.

Contribution of Henry Fayol of Classical Approach

Perhaps, the real father of modern management theory is Henry Fayol. He was a French
mining engineer, who after obtaining engineering degree joined a French coal firm as
technician in 1880.

Fayol observed the organizational functioning from manager's point of view. He found that all
activities of the organisation could be divided into six groups:
1. Technical (relating to production)
2. Commercial (buying, selling, and exchange)
3. Financial (search of capital and its optimum use)
5. Accounting (including statistics)
6. Managerial (planning, organisation, command, co-ordination and control).

He points out that these activities exist in every organisation. He further observes that first five
activities. Fayol has divided his approach of studying management in three parts: (I)
managerial qualities and training. (ii) General principles of management, and (iii) elements of
management.

Harrington Emerson Contribution of Classical Approach

Emerson made scientific management more acceptable to people. He wrote a book in 1912
on 'Efficiency', in which he has given 12 principles of increasing efficiency.

These are
(1) ideals
(2) common sense
(3) competent counsel
(4) discipline
(5) fair deal
(6) reliable, immediate, adequate, and permanent records
(7) dispatching
(8) standards and schedules
(9) standardized conditions
(10) standardized operations
(11) standard practice instructions
(12) reward for efficiency.

Frank Gilbert Contribution of Classical Approach

Frank Gilbreath and his wife Lilian Gilbreath were contemporary of Taylor, but they worked
independently on time and motion study.
Besides time and motion study, they ave also developed a comprehensive body of planning
an control techniques for construction industry. In 1908, Frank Gilbreath published a book
'Field System' and Mrs. Lilian wrote a research paper on 'The Psychology of Management'.

Taylor's Principles of Classical Approach

Although Taylor's principles were intended for broad application, his emphasis was not on
general management; but on management at the shop level.

He was more concerned about the efficiency of workers and mangers at actual work and left
the principles of management which could be followed in other functional areas. These
principles, more specifically time, motion, and fatigue study, became the basis for some
time, but the much talked mental revolution could not take place. The adoption of scientific
management was resisted by manages on that plea that it involved extra costs on their part
in various experiments, and by workers also on the plea that by this method they could put
in more work, however, the profit did not go to them. Both the parties took a short-term view.

Classical Approach of Management Thought

Classical Approach of Management Thought

The approach has focused on on input-output mediators and given less attention to
constraining an facilitating factors in the external environment. The writers have dealt with
human motivation only in a very rudimentary manner.

In the classical approach, wherein organisation is treated as a machine, the efficiency of the
organisation can be increased by making each individual efficient in it. The emphasis is
more on specialisation of performance and co-ordination of various activities. In fact among
the classical writers, few emphasized on individual efficiency and others emphasized on
group efficiency. As such, it was given tow streams-scientific management and
administrative management. However, it should be made clear, here, that classical label
does not mean that views are static and time-bound many of their views still hold good
today.

Taylor and other contributories, notably Frank Gilbreath an Lilian Gilbreath, Henry Gantt,
Emerson, investigated the effective use of human beings in industrial organizations. In
industrial organizations. They studied primarily the use of human beings as adjuncts to
machines in performance of routine task. The area of human behavior in organizations
investigated by them was quite narrow, and the theories of human behavior in this approach
encompass primarily physiological variables. This is because of the historical accidents of
their positions and training in the industry and the type of problems they faced there.

Pre-Scientific Management

Though Frederic W. Taylor is known as the founder of scientific management, many

persons before him made considerable contribution to the development of management
thought.

Prominent among them were James Watt and Boulton, Owen, Babbage and Poor. Their
main contributions are as follows:

(i)James Watt and Boulton. These two men took charge of the management of the Soho
Engineering Foundry when it was established in 1796 in Great Britain. Watt was in charge of
organisation and administration, and Boulton was responsible for the sales or commercial
activities. They developed many management techniques. Prominent among them were
market research an forecasting in marketing ares; planned machine layout in terms of work-
flow requirements, production planning, production-process standards, and standardization
of product component in production area; calculation of cost and profit for each machine and
department in costing area; training and development of workers and executive, work study
and payment by results, welfare programme and constitution of a committee to administer it
in personnel area.

(ii) Robert Owen. He carried out most of his experiments in the area of personnel
management when he was engaged in managing the textile mills in Scotland between 1800
and 1828. Owen improved working conditions in the factory, provided meals to employees in
the factory, provided housing and marketing store facilities to the employees. His main
philosophy was that good personnel management paid dividends to the employer and it was
in essential part of every manager.

(iii) Charles Babbage. Babbage was a professor of Mathematics at Cambridge University

(1818-39) and took keen interest in the problems of manufacturing operations. He is best
remembered for his book 'On the Economy of Machinery and Manufactures' published in
1832. He was specially interested in the economics of division of labour and development of
scientific principles to govern a manager's use of facilities, materials and labour to get the
best possible results.

(IV) Henry Varnum Poor. He was editor of 'American Railroad Journal' in the latter half of
the nineteenth century. While on this position he watched and analyzed the progress of
American railroad system. He visualized the scope for effective management to bring the
railroad in the light direction. He gave many recommendations many of which might be
termed as most modern. He felt the need for a managerial system with a clear organisation
structure in which people have clear responsibility and can be held accountable.

Early Contribution

The early contributions have come mainly from Roman catholic Church, military
organizations and camera lists.

The contributions of Roman Catholic Church were the development of the hierarchy of
authority with its territorial organization, the specialization of activities along functional lines
and the early use of staff device for efficiency. The military organizations in the past have
emphasized what is called today as 'Unity of Doctrine' and the use of staff for line
personnel. The camera lists were a group of Austrian and German public administrators
and intellectuals from sixteenth to eighteenth centuries. They emphasized systematic
administration as a source of strength for the State.

Classification of Management Thought

Management is old as civilization and it has been of some concern to organized society
thought civilized history. Various examples exist today to remind us the result of the
organized activities of the past.

However, the principles of such organized activities are either not available or not
applicable in present day social structure. In fact, no organized effort towards developing
management principles was carried on before the present century and most of the earlier
contributions towards increasing the efficiency of organized groups were scattered.
Another significant point in the context of the development of thought is that the
contributions have been made by practicing managers as well as academicians. Thus the
total contribution is the result of practical experience as well as the organized researches.
If we analyze various thought from period point of view, the role of organized researches
successively increase in the development of management principles. For the sake of
analysis, the management thoughts have been classified as:

1.Classical approach

2. Human relations approach and

3. Systems approach

1. Classical approach

Starting with the early beginnings of management we come across the “Scientific
Management” also known as “Taylorism”, named after his founder and father Frederick
Winslow Taylor.
His theory was one of control and co-ordination. For an increase in production, managers
should take control of the whole process. They should observe their workers and analyze
each step in terms of time spent and energy expended and then uses the results to
determine the best methods for working processes. They should give workers the right
tools and equipment and a standardized method of doing the job. These persons do it like
they were asked to, not thinking about what they do and what for. Management will do all
the work which workers are not able to do. But acting in behalf of this theory manager's
supervised every step of the workers closer and closer, so that they had no more
autonomy at all. The workers got unhappy about the situation and thought that they know
more about their work then all the managers and experts.
Even today this theory of management is common in many places. Companies and
managers use time and motion studies to increase productivity of their workforce. They
hire the best qualified employees and design incentive systems based on output they are
bringing. ical approach.

2. Human relations approach

The human relations approach to management was originated in the 1930s as a reaction
against the mechanistic view of organizations and the pessimistic view of human nature
suggested by the classical approach. The human relations approach argues that people
are emotional rather than economic‐rational beings; organizations are cooperative social
systems rather than mechanical ones; and organizations are composed of informal
structures, rules, and norms as well as formal practices and procedures. The human
relations approach represents a distinct break from the classical approach. However, both
share two important similarities. First, they see organizations as closed and unchanged
entities. Second and relatedly, they believe that there is “one best way” of managing the
organization, regardless of the type, nature, or size of the organization, and that their way
is “the best way.”Important theoretical advancements in the human relations approach
include the famous Hawthorne experiments conducted by Elton Mayo, Chester Barnard's
cooperative system, Abraham Maslow's hierarchy of needs, Douglas McGregor's Theory
X–Theory Y, and Warren Bennis's “the death of bureaucracy.” Despite these intellectual
advancements, the human relations school remained operationally weak until the 1950s
and 1960s when the advent of the job design movement offered operational guidelines to
organizations

3. Systems approach

The systems approach to management is a concept which views a company as an

interconnected purposive system that consists of several business sections. It is a
management approach which enables the leadership to see the company as a unified
part or a major section of the larger outside corporate environment. Even a small activity
in a part has a substantial effect on other sections in the company. Such a system may be
biological, physical or social; and may enable the management to efficiently determine the
long-term goals of the company. The systems approach states that for realizing the
operations of an entity, it is essential to see the entity as a complete system.

This classification is based on the grouping of various thoughts which have similarity in
the approach of how managers get the things done. The classification in not very rigid
suggesting that the thoughts can be classified in some other ways. Before we proceed to
the study of management in an organized way, let us have a look on the early
contributions mostly in scattered way.

Development of management thought

Although the systematic management has a recent origin, the practice of management is
as old as human society.

Human beings, being gregarious in nature, have been living in groups since the very
beginning. The history of human beings is full of evidence of organizational activity that
indicates a knowledge of many to the ideas later expressed by the pioneers of scientific
management. However, the study of how managers achieve the results is predominantly
a twentieth century phenomenon.

Managerial job in business

All social institutions, whether they are business or non business ones, require the
same process of management of achieving their objectives.

But there are some special considerations that put the business enterprises in a class
by itself from other social institutions. The criteria of efficiency, productivity and
accountability are not so exacting and demanding in the case of other social institutions
as in the case of business. Leaving aside communist countries where totalitarian
planning takes place, the very survival of business depends upon the fulfillment of
objectives in the face of competition and many other odds.

The manager performs three types of work simultaneously-managing a businest

managing managers and managing workers and work. Almost every decision or action
a, manager takes affects all these facts. Managing a business is the task pertaining to
the economic performance of the enterprise and calls for the supply of goods and
services at acceptable prices. To be effective, a manager must be creator rather than' a
creature of the economy. Secondly, managing mangers is necessary for making a
productive organisation out of human and material resources. It involves co-ordination
of efforts and functions of managerial personnel, setting goals for them and directing
their activities Finally, managing workers and work is concerned with organizing and
directing the employees and their work. It calls for the evaluation of the worker both as
a human being and as a resource.

Managers are supposed to confine themselves to managerial duties. But in actual

practice, all managers do a lot of non-managerial duties in addition to their managerial
duties. The lower an level of managers, the managerial content of the job gradually
shrinks and non-management duties in predominate. Even the top job are not immune
from non-managerial duties. To take some examples, sales calls on important
customers are usually made by the sales manager, although such duties are not
managerial in character. The chief executive of a company is very often found to
undertake public relations activities by way of making public addresses, having press
conferences and going through other like non-managerial duties. A supervisor at the
bottom performs many non-managerial duties like making reports, preparing invoices,
operating equipment, and so on.

Functions of management

There are four basic functions of management, viz., planning, organization, direction
and control.

These functions are closely interlinked and interwoven in character. All executives or
mangers, regardless of their area and position, a are o discharge these functions.
These functions are the identifying marks by which a manger can be differentiated
form a non-manager. Of the four functions, however, the upper or top executives are
mostly preoccupied with the first two functions-planning and organization, while the
lower-ranking executives are largely busy with direction and largely busy with direction
and control. But the thinking functions of planning and organisation cannot be
separated in to water-tight compartments from the doing functions of direction and
control. Irrespective of their levels and spheres of activity, executives are required to
perform all the four functions in varying degrees.

1. Planning Is the rational and orderly thinking about ways and means for the
realization of certain goals. It involves thought and decision pertaining to a future
course of action. It anticipates and precedes action rather than making a reflective
thinking abut the past events. Absence of planning before doing implies rashness,
imprudence or shortsightedness in the performance of work. Before undertaking any
work, is to be done, and who is to do the work. In considering these points, managers
have to clarify objectives or goals and to evolve policies and procedures for guiding
those who do the work; they have to chart the proposed lines of action with proper
time schedules for the execution of work. For providing a factual basis for future
action, managers have to map out a programme indicating the best course of action to
be followed, fixing the targets and standards of work performance there in and
evolving the strategies and remedies for possible hindrances to the smooth flow of
work. In other words, programmes provide a complete road map for the guidance of
managers to get things done through operators.
In a sense, planning and decisions making are synonymous. Like decision making,
planning is made for providing guide to action in problem areas. There is much
common ground between the steps planning and of decision making-diagnosis of the
problem, development of alternative, evaluation of alternative and selection of the best
course of action. The decision phase of planning is so important that many writers
have treated planning as a synonym of decision making.

2. Organization Provides the mechanism or apparatus for purposive, integrated and

co-operative action by two or more persons with a view to implementing any plan.
With a few persons, organization calls for the allocation of tasks to individuals and the
requires the efforts of many people, several departments come into existence under
the charge of different managers who are tied together neatly by authority
relationships for integrated action. That is, organization involves the division and
subdivision of activities, into departments, sections and jobs as well as the integration
of activities and positions into a co-ordinate whole. The division of activities entails
three thing, viz., determination of
total activities, grouping of such activities and assignment of jobs to both managers
and operators. The integration of activities is effected through positions which are
bound together in a consistent pattern by the fabric of inter-relationships among
enterprise functions, jobs and personnel. Delegation of authority is the cement that
holds the positions together as one entity.

The concept of organization has a number of implications. First, it has two aspects:
technical or mechanistic aspect pertaining to activities and social or humanistic aspect
pertaining to people. For the personal contentment and social satisfaction of people,
organization calls for the matching of jobs with individuals and vice-versa. Secondly,
as a mechanism for action, organization is required to be changed when either the
volume and nature of action or the personnel change. Although some amount of
reorganization takes place with every personnel change, upper-level personnel
change is more significant in effect. Thirdly, delegation of authority takes place not
only between management members, but it extends to operators as well. In addition
to managerial jobs, the operating jobs are also put to the same process of delegation.

3. Direction is largely a function of human relations and motivation. This function is,
of course, denoted variously by different writers, such as command, leadership,
motivation, execution or actuating. The organizational mechanism is to be energized,
activated or put into action for carrying out the management plan. This is what is
actually done through directing function to set the organization in motion. But human
beings are not inanimate cogs in a machine; they have emotions, aspirations,
sentiments, capacity to participate or to withhold such participation. Like a machine,
they could not be ordered to do a predetermined work. With the purpose of inducing
the members of the organization to put forth their best endeavor, managers direct the
employees through the medium of leadership, guidance, supervision, communication
and counseling. Direction involves personal and social-group relationships. The
working terms are inspired and motivated to do the work willingly and whole-heartedly
because of providing desirable job satisfaction and wanted team spirit.

4. Control ensures qualitative and quantitative performance of work in the

organization for completing plans and achieving objectives. Under the control function,
measuring standards or yardsticks are established and communicated to managers
so that they can regulate employee performance and can work by self-control.
Moreover, control brings to light any management lapses that hinder satisfactory work
progress, and thus it provides the managers with an opportunity to take remedial
action before it is too late. The control function furnishes new data and facts that
enable the managers to verify the accuracy of their decisions with regard to planning,
organizing and directing functions. Controlling as a process involves measurement,
evaluation and correction of performance in the light of standards established through
planning. That planning and controlling are inter-dependent can be explained form the
nature of either functions. As control forces events to conform to plans, three can exist
no control without planning. Likewise, plans are not capable of self-achieving without
the exercise of controlling function. In the past, control was work-focused rather than
work-focused.

Fayol's principles of management

Fayol evolved fourteen principles of management which may be briefly stated as

follows

1. Division of work. The object of division of work is to derive the benefits from the
principle of specialization which can be applied not only in technical work, put in all
other work as well. Unlike Taylor, Fayol pointed out that division of work has its
obvious limits.

2. Authority and responsibility. Authority and responsibility are correlated terms;

responsibility is the essential counterpart of authority and they go hand. An ideal
manger is expected to have official authority arising from official positions as well as
his inherent personal authority. Such person authority is “compounded of intelligence
experience, moral worth, ability to lead, past services, etc.”

3. Discipline. “Discipline is in essence obedience, application, energy, behavior, and

outward marks of respect” shown buy employees. “Discipline is what the leaders
make it” through the observance of agreements, because agreements spell out to
formalities of discipline. Three requisites of discipline are (a) good supervisors at all
levels, (b) clear and fair agreements, and (c) judicious application of penalties of
sanctions.

4. Unity of direction. This principle requires than employee should receive orders
form one superior only. Dual command wreaks havoc in all concerns, “since authority
is undermined, discipline in jeopardy, order disturbed and stability threatened.”
5. Unity of direction. Fayol discussed this principle of unity of direction in a different
way from that of unity of command. While unity of direction is concerned with the
functioning of the body corporate, unity of command is only concerned with the
functioning of personnel at all levels. For the accomplishment of a group of activities
having the same objective, there should be one head and one plan. “A body with two
heads is in the social as in the animal sphere a monster, and has difficulty in
surviving.

6. Subordination of individual interest to general interest. Common interest must

prevail over individual interest, but some factors like ambition, laziness, weakness
and others tend to reduce the importance of general interest.

7. Remuneration of personnel. As the prices of services rendered remunerations

should be fair and satisfactory to both the parties.

8. Centralization. “Everything which goes to increase the importance of the

subordinate's role is decentralization, everything which goes to reduce it is
centralization.” The question of centralization or decentralization holds the key to the
utilization of all faculties of the personnel.

9. Scalar chain. It is the chain of superiors or the line of authority form the highest
executive to the lowest one for the purpose of communication. The need for swift
action should be reconciled with due regard to the line of authority by using “gang
plank” or direct contact.

10. Order. This is a principle of organization relating to things and persons material
order requires “a place for everything and everything in its place” and social
demands the engagement of “the right man in the right place.”

11. Equity. Equity is greater than justice, since it” results from the combination of
kindliness and justice.” The application of equity requires much good sense,
experience and good nature with a view to securing devotion and loyalty form
employees.

12. Stability of tenure of personnel. Stability of tenure is essential to get an

employee accustomed to doing a new work and to enable him in performing it well.
Instability of tenure is an evidence of bad running of affairs.

13. Initiative. The freedom to purpose a plan and to execute it is what is known as
initiative that increases zeal and energy on the part of human beings. Since initiative
is one of “the keenest satisfactions for an intelligent man to experience.” Fayol
advised managers to secure as much initiative from employees as possible.

14. Esprit de corps. This is an extension of the principle of unity of command

whereby team work is ensured. To maintain proper esprit de corps in the
organization, personality politics and abuse of written and communications are to to
be guarded against.

REFERENCES :

http://www.bookrags.com

http://www.wikipedia.org
http://www.freemba.in