Introduction Raghudathesh G P, Lata S H Asst Professor

MANAGEMENT & ENTREPRENEURSHIP (VTU) - 10AL51

UNIT - 1

MANAGEMENT: Introduction - Meaning - nature and characteristics of Management, Scope

and functional areas of Management - Management as a Science, Art or Profession Management
& Administration - Roles of Management, Levels of Management, Development of
Management Thought-Early Management Approaches-Modern Management Approaches.

7 Hours
TEXT BOOKS:

1. Principles of Management - P. C. Tripathi, P. N. Reddy; Tata McGraw Hill, 4th Edition,

2010.
2. Dynamics of Entrepreneurial Development & Management - Vasant Desai Himalaya
Publishing House.
3. Entrepreneurship Development - Small Business Enterprises - Poornima M Charantimath -
Pearson Education 2006.

Special Thanks To:

BY:
RAGHUDATHESH G P, LATA S H
Asst Professor
ECE Dept, GMIT
Davangere 577004
Cell: +917411459249
Mail: datheshraghubooks@gmail.com, lathah@gmit.ac.in
Website: raghudathesh.weebly.com
Quotes:
We make a living by what we get, but we make a life by what we give.
If you do not enjoy what you are doing, you will never be good at it.
Work hard on yourself not on your job. If you Work hard on your job you will make a
living but if you work hard on yourself you make a fortune.
Never be a good listener but a selective listener.
Be passionate as bad as you want to breathe to be successful.

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Introduction Raghudathesh G P, Lata S H Asst Professor

Introduction:
Managing is one of the most important activities of human life. Managing has become
essential to ensure the coordination of individual efforts. Principles of management are now
used not only for managing business but in all walks of life viz., government, military,
social & educational institutions.
Management is a critical element in the economic growth of a country. By bringing
together the 4 factors of production (viz., men, money, material, and machines),
management enables a country to experience a substantial level of economic development.
Management is the dynamic, life-giving element in every organization. It is this element that
coordinates current organizational activities & plans future ones.
According to Mary parker "Management is the art of getting things done through people". A
manager is one who contributes to the organizational goals directly or indirectly by directing
the efforts of others not by performing the task himself. On the other hand a person who is
not a manager makes his contribution to the organizational goals directly by performing the
task himself.
According to George R Terry, he defines "management as a process consisting of planning,
organizing, actuating & controlling, performed to determine & accomplish the objectives by
the use of people & resources".
Definition: Management in all business and organizational activities is the act of getting
people together to accomplish desired goals and objectives using available resources
efficiently and effectively.

Nature And Characteristics of Management:

Normally, the production process involves land, labour, capital, organization and
entrepreneurship. So long as these factors remain separated, there is no possibility for
production. Production is the result of their combined efforts. Thus success of production
depends on their effective combination and cooperation.
In today's complex business organization, it has become a difficult and challenging task to
strike an effective balance.
This calls for a special skill, Knowledge and characteristics to seek their fullest cooperation
to achieve the objectives set by an enterprise. Such skills and knowledge is the management.

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Introduction Raghudathesh G P, Lata S H Asst Professor

The following are some of the important Characteristics of management:

1. It should be stable.
2. It should be applicable to all kinds of organizations.
3. It is transparent.
4. Its approaches are to be clear and goal oriented.
5. It should have well defined goals, and effective means to accomplish the goals.
6. It should have good planning, organizing, staffing, directing and controlling
functions.
7. It should provide conductive atmosphere of work.
8. Finally, it should be simple yet effective.

Scope of Management:
Management is a must for every organization.
The existence of management ensures proper functioning & running of an enterprise.
Management plans the activities, coordinates & utilizes the resource effectively& efficiently
at minimum cost.
Every business needs direction, this direction is given by management.
The scope of management is not limited to only industries, but its scope can be extended to
the following important areas of life:
1. Development Management:
Development management deals with the coordination and management
processes of international development programs and projects.
2. Distribution Management:
A Distribution Management System is a collection of applications designed
to monitor & control the entire distribution network efficiently and reliably.
It acts as a decision support system to assist the control room and field
operating personnel with the monitoring and control of the electric
distribution.
3. Financial Management:

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Introduction Raghudathesh G P, Lata S H Asst Professor

Financial Management means planning, organizing, directing and

controlling the financial activities such as procurement and utilization of
funds of the enterprise.
4. Marketing Management:
Marketing management is a business discipline which is focused on the
practical application of marketing techniques and the management of a
firm's marketing resources and activities.
5. Production Management:
Production Management refers to the application of management principles
to the production function in a factory. In other words, production
management involves application of planning, organizing, directing and
controlling the production process.
6. Office Management:
Office management is the administrative handling, controlling and
maintaining a balance process of work inside the office of an organization
whether big or small company/business.
7. Transportation Management:
A transportation management system is a subset of supply chain
management concerning transportation operations and may be part of an
enterprise resource planning system.
8. Purchase Management:
Purchasing management is the management of purchasing process, and
related aspects in an organization.
9. Sales Management:
Sales management is a business discipline which is focused on the practical
application of sales techniques and the management of a firm's sales
operations.
10. Supply chain Management:
Supply chain management is the management of a network of
interconnected businesses involved in the provision of product and service
packages required by the end customers in a supply chain, Its pans all

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Introduction Raghudathesh G P, Lata S H Asst Professor

movement and storage of raw materials, work-in-process inventory, and

finished goods from point of origin to point of consumption.
11. Personnel Management:
Personnel management can be defined as obtaining, using and maintaining a
satisfied workforce. It is a significant part of management concerned with
employees at work and with their relationship within the organization.
12. Business Management [Hospital management, Educational institutions, Hotel
management etc]:

Functions of Management:
There are 7 essential functions of management. They are:
1. Planning:
Planning is referred to as decision making.
It involves setting up of short & long term goals for organization, selecting
objectives, strategies & policies for accomplishing the planned goal.
Deciding in advance what to do, how to do, who has to do etc, planning
bridges the gap from where we are now to where we want to be in future.
Thus, planning is a function which is performed by managers at all levels-
top, middle & supervisory.
Top level managers are concerned with long range planning involving 5 to
10 years, middle level managers are concerned with medium range planning
involving few months to one year and lower level managers are concerned
with planning the activities of daily or week or up to a month.
2. Organizing:
Organizing involves in establishing an intentional structure of roles for
people to fill in an organization.
To organize a business well, its required to provide all useful things for its
proper functioning. They are raw materials, tools, capital & personnel.
3. Staffing:
Staffing is considered as an important function which makes pro ion for man
power to fill different position.

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In staffing, manger attempts to find the right person for each job.
It involves in building the human organization by filling, & keep filling the
staff. this is done by identifying work-force requirement taking inventory of
people available, recruiting new staff, selecting, placing, promoting,
apprising, planning their career, training the staff to accomplish their task
efficiently & effectively.
4. Directing:
Directing/leading move people towards the defined organization objective.
Directing involves three sub-functions namely:
a) Communication:
It is the process of passing and understanding information
from one person to another.
b) Leading:
leading/leadership is the process by which manager guides
and influences the work of his sub-ordinates.
c) Motivation:
It means arousing desire in the minds of employees in an
organization to perform their best to the enterprise.
Two broad categories of motivation are:
I. Financial Motivation: it takes the form of salary,
bonus, profit-sharing, rewards etc.
II. Non-Financial Motivation: it takes the form of job
security, promotions, recognition, praise etc.
5. Controlling:
It is a process in which manager must measure and correct the activities of
sub-ordinates to ensure that the work is going on as per the plans.
It measures performance against goals and plans, shows where deviations
exist and takes necessary corrective actions to meet the set goals or
standards.

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6. Innovation:
It means creating new ideas which may either results in the development of
new products or finding new users for the old ones.
7. Representation:
A manager is also required to spend a part of his time in representing his
organization before various outside groups which have some stake in the
organization like government offices, labor unions, financial institutions,
suppliers, customers etc.

Figure: Management Process

Roles of Management:
Manager in any organization plays a variety of roles responding to a particular situation. The
3 important roles played by a manager are:
1. Interpersonal roles:
This includes figurehead, leader & liaison roles.
In figurehead role, the manager will perform some duties that are casual &
informal ones like receiving & greeting the visiting dignitaries, attending to
social functions like wedding of an employee, entertaining customers by
offering parties & lunch etc.
As a leader very manager must motivate, direct & encourage his emloyees.
He must also reconcile their individual needs with the goals of the
organization.

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In the role of liaison the manager works between the top management &
subordinate staff, he develops contacts with outside people & collects useful
information for the well being of the organization.
2. Informational roles:
Manager plays as monitor, spokesman & disseminator.
A manager monitors his environment & collects information through his
personal contacts with colleagues & subordinates.
As a spokesman, he communicates the information/goals of organization to
his staff & the progress of work to his supervisors. He also communicates
the performance of company to shareholders & the rules & responsibilities
to his subordinates.
As a disseminator, the manager passes some of the privileged information
directly to his subordinates (who would have no access to it) & to his boss.
3. Decisional roles:
There are 4 decisional roles played by manager, they are resource provider,
arbitrator (or disturbance handler), entrepreneur, negotiator.
As a resource provider, the manager divides the work, provides required
resources & facilities to carry out the allocated work & delegates required
authority among his subordinates. He decides who has to do what & who
gets what.
As arbitrator/disturbance handler, manager works like a problem solver.
He finds solution to various unanticipated problems anticipated problems
(like a strike may happen, a major customer may go bankrupt etc) both
within & outside the organization.
As an entrepreneur, a manger continuously looks for new ideas & tries to
improve the organization by going along with changing working
environments.
As a negotiator, he negotiates with the employees & tries to resolve any
internal problems like trade agreements, strikes & grievances of employees.

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Levels of Management:
There are 3 levels of management:
1. Top level Management:
Defines objectives and provides direction, it consists of Chairman, Directors,
Company Presidents, CEO's.
These are the people who make policies for the company, set goals &
targets.
They should possess Conceptual & Design skills.
2. Middle level Management:
Interprets and explains the policies framed by the top management.
It is the vast & diverse group that includes finance managers, marketing
managers, sales manager, and personnel manager.
They should possess Human skills.
3. Lower level Management ( First line managers or supervisors):
It is concerned with routine activities.
They are basically one step above the workers.
The lower level managers are the supervisors & foremen.
They should possess Technical skills.

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Managerial Skills:
A skill is an individual's ability to translate knowledge into action. Skill is not necessarily
inborn. It can be developed through practice & through relating to one's own personal
experience & background.
In order to be able to successfully discharge his roles, a manage should possess three major
skills. These are:
1. Conceptual skill:
Conceptual skill deals with ideas.
It refers to the ability of a manager to take a broad, farsighted view of the
organization & its future, his ability to think in abstract, his ability to analyze
the forces working in a situation, his creative, innovative ability & his ability
to assess the environment, the changes taking place in it.
In short, it is his ability to conceptualize the environment, the organization,
& his own job, so that he can set appropriate goals for his organization, for
himself & for his team.
This skill seems to increase in importance as manager moves up to higher
positions of responsibility in the organization.
2. Human Relations skill:
Human skill deals with people.
It is the ability to interact effectively with people at all levels. This skill
develops in the manager sufficient ability
To recognize the feelings & sentiments of others.
To judge the possible reactions to, & outcomes of various courses of action
he may undertake.
To examine his own concepts & values this may enable him to develop more
useful attitudes about himself.
This skill remains consistently important for managers at all levels.
3. Technical skill:
Technical skill deal with things.
The manager understands of the nature of job that people under him have to
perform.

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It refers to the person's knowledge & 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.
This type of skill & competence seems to be more important at lower levels
of management, its importance as a part of managerial role diminishes as a
manager moves to higher positions.
While both conceptual and technical skills are needed for good decision-making, human
skill is necessary for a good leader.

Management & Administration:

1. According to Sheldon, Spriegal, Milward:
Administration involves "thinking".
It is a top level function which centers around the determination of plans,
policies and objectives of a business enterprise.
Management involves "doing".
It is a lower level function which is concerned with the execution, direction
of policies and operation.
According to this concept, managers get salary & administration staff gets
dividends.
2. According to Brech and others:
Management is general term which includes administration.
Management covers entire portion of Planning, organizing, directing and
controlling.
Administration is a branch of management which involves planning &
controlling.
3. According to another view expressed by Peter Druckeris:
It is used in different fields; Administration is used in Governance of non-
business organization such as Government, army, church etc.
Management is used in Governance of business enterprises such as
Educational Institutions etc.

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Administration is the function in industry concerned with the determination of corporate

policy, the coordination of finance, production and distribution, the settlement of compass of
the organization under ultimate control of the executives.
Management is the function in industry concerned with the execution of policy within the
limits setup by administration & the employment of the organization for the particular object
set before it.

Difference Between Administration and Management:

Management as a Science, Art or Profession:

Management as science: In science we learn "why" of a phenomenon. Science is a
systematized body of knowledge.
We call a discipline scientific if its
1. Methods of inquiry are systematic and empirical.
2. Information can be ordered and analyzed;
3. Results are cumulative and communicable.

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Systematic means, being orderly and unbiased. Scientific information collected in the raw
form is finally ordered and analyzed with statistical tools.
Science is also cumulative in that what is discovered is added to that which has been found
before. We build upon the base that has been left by others.
Science denotes two types of systematic knowledge
Natural or exact:
1. In exact or natural science (such as physics and chemistry) we can study the
effect of any one of many factors affecting a phenomenon.
2. Ex.: we can study in the laboratory, the effect of heat on density by holding
other factors (like humidity, pressure etc.) constant
Behavioral or inexact:
1. It is not possible to study the effect of any one of many factors affecting a
phenomenon.
2. In management we have to study man and number of factors affecting him.
3. Ex.: we cannot study the effect of monetary incentives on worker's
productivity, because in addition to monetary incentives other inseparable
factors like leadership styles, workers need hierarchy and leadership styles
will also have simultaneous effect on productivity.
Management is in the category of behavioral science.
Management as an art: In art we learn the "how" of a phenomenon. Management is the art
of getting things done through others in dynamic situations.
A manager has to coordinate various resources against several constraints to achieve
predetermined objectives in the most efficient manner.
Manager has to constantly analyze the existing situation, determine objectives, seek
alternatives, implement, and control and make decision.
The theoretical lessons on principles, concepts and techniques learnt by a manager in
classroom is not enough to get the aimed results unless he possess the skill (or art) of
applying such principles to the problems. The knowledge has to be applied and practiced.
It is like the art of musician or painter who achieves the desired results with his own skill
which comes by practice.

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Management as a profession: We can see that management is partly an art and partly a
science. Management does not possess the characteristics of a profession.
A profession is expected to have
1. Organized& systematic knowledge
2. Formalized methods of acquiring training & experience
3. Ethical code to regulate the behavior of the members of the profession
4. Charging of fees based on service
Unlike medicine & law, management does not have any fixed norms of managerial
behavior. There is no uniform code of conductor licensing of managers.
Lawyers & doctors take up profession after obtaining valid academic qualification whereas
a manager job is not restricted to individuals with a special academic degree only.
Based on above facts it can be concluded that management is not a profession.
Nowadays, it has become essential to acquire management degrees or training in
management to be called as a good manager.
There is increased demand for qualified managers with MBA degree. But degree in
management does not by itself make an individual a professional manager, there have been
good examples of efficient managers without any professional managerial degree.
So, management has become a profession than art or science.

Development of Management thought:

The evolution of management can be divided into 3 parts:
1. Early Classical Approach:
Represented by scientific management, administrative management &
bureaucracy
2. Neo classical Approach:
Represented by human relations movement & behavioral approach
3. Modern Approach:
Represented by quantitative approach, systems approach and contingency
approach

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Scientific Management:
Frederick Winslow Taylor (1856-1915) is considered as father of Scientific Management.
Scientific management is classified into following:
1 Time and Motion Study
2 Differential Payment
3 Drastic Reorganization of Supervision
4 Scientific Requirement & training
5 Intimate friendly cooperation between the management and the workers

1 Time and Motion Study:

In time & motion study Taylor recorded the time required for each motion of a job
with the help of stop watch.
Shorter and few motions were developed.
Unwanted motions were eliminated.
The best way of doing a particular job was arrived at.
With this the time required to complete one job was calculated called standard time.
2 Differential payment:
Time and motion study & establishment of standard time further helped in arriving
at the production rate of a particular piece or job.
Taylor introduced payment plan called differential piece work", he linked the
incentives with production.
As per this, a worker gets a minimum guaranteed wage if he produces a standard
number of pieces and if he produces more than this standard number, he is paid
incentive.
It was thought that this would motivate workers to produce more.
3 Drastic Reorganization of Supervision:
Taylor observed that the worker himself had to plan his work & do the job.
The supervisors work was just to allocate the work to be done.
But, Taylor advocated that the planning of work, selection of tools & sequences of
doing work are to be done by foremen(supervisor) & the worker has to simply carry

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out the work without wasting his time as to how to do that and also there should be
separate for each function of job.
4 Scientific Recruitment & training:
Taylor suggested the need for scientific selection, training & development of worker
to carry out a specific task in a more productive way i.e, management should
develop & train every worker to bring out his best.
5 Intimate friendly cooperation between the management and the workers:
Taylor believed that good cooperation between the management & workers would
lead to increased profit for both.
For the above suggestion to succeed "a complete mental revolution" on part of
management & labour is required.
Rather than quarrel over whatever profits there were, they should both try to increase
production. By doing so, profits would be increased to such an extent that labour &
management would no longer have to compete for them.
Limitations of Scientific management:
1 Taylor's belief that economic incentives are strong enough to motivate workers for
increased production proved wrong. No man is entirely an "economic man", that is,
a man's behavior is not always dictated by his financial needs. He has many other
needs also such as security needs, social needs or egoistic needs which motivates
him far more potently than his desire for money.
2 Taylor's time and motion study is not accepted as entirely scientific. This is because
two time studies done by two separate individuals may time the same job entirely
different, because no two individuals can be expected to work in the same way at the
same rhythm, with the same attention and the same learning speed.
3 In Drastic Reorganization of Supervision, that is, having a man take orders from 7 to
8 bosses resulted in confusion, besides increasing the overhead cost.
4 Advances in methods and better tools and machines eliminated some workers who
found it difficult to work on that.

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Administrative Management:
Henri Fayol (1841-1925) is considered as father of administrative management.
Principles of administrative management:
1 Division of work
2 Authority & responsibility
3 Discipline
4 Unity of command
5 Unity of direction
6 Subordination of individual interest to general interest
7 Remuneration
8 Centralization
9 Scalar chain
10 Order
11 Equity
12 Stability of tenure of personnel
13 Initiative
14 Esprit de Corps

1 Division of work:
Division of work in the management process produces more & better work with the
same effort.
Various functions like planning, organizing, directing & controlling cannot be
performed efficiently by a single person, they must be entrusted to specialist in
related fields.
2 Authority & responsibility:
Manager should have the right to give orders & power to exact obedience.
A manager may exercise formal authority & also personal power. Formal authority
is derived from his official position, while personal power is the result of
intelligence, experience, ability to lead, past service etc.
An individual who is willing to exercise authority, must also be prepared to bear
responsibility to perform the work in the manner desired.

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3 Discipline:
Discipline is essential for smooth running of business.
Discipline means the obedience to authority, respect for agreements, sincere efforts
for completing the given job, respect for superiors etc.
The best means of maintaining discipline are good supervisors at all levels, clear &
fair agreements between the employees & the employer& judicious application of
penalties.
4 Unity of command:
Each employee should receive instructions about a particular work from one
superior only, if employee was to report to more than one superior, he would be
confused due to conflict in instructions & also it would be difficult to pinpoint
responsibility to him.
5 Direction:
It means that there should be complete identity between individual & organizational
goals on one hand & between departmental goals on the other. They should not pull
in different directions.
6 Subordination of individual interest to general interest:
In a business, an individual is always interested in maximizing his own satisfaction
through more money, recognition, status etc.
This is against the general interest which lies in maximizing production. Hence there
is need to subordinate the individual interest to general interest.
7 Remuneration:
The remuneration paid to the personnel of the firm should be fair, it should be based
on general business conditions, cost of living, productivity & capacity of firm to pay.
Fair remuneration increases workers efficiency.
8 Centralization:
If subordinates are given more importance in the management & organization of the
firm, it is decentralization.
The management must decide the degree of centralization or decentralization of
authority on the basis of the nature of circumstances, the type of the activities & the
nature & organizational structure.

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9 Scalar chain:
Scalar chain means the hierarchy of authority from the highest executive to the
lowest one for the purpose of communication.
It states the superior-subordinate relationship & the authority of superiors in relation
to subordinates at various levels, the orders or communication should pass through
the proper channels of authority along the scalar chain.
10 Order:
To put things in order needs effort. Management should obtain orderliness in work
through suitable organization of men & materials.
The right place for every man should be observed by the management, so there is
need for scientific selection of competent personnel, correct assignment of duties to
personnel & good organization.
11 Equity:
It means equality or fair treatment. Employees expect management to be equally just
to everybody.
It requires managers to be free from personal likes or dislikes.
Equity ensures healthy relations between management & labour which is essential
for the successful working of the enterprise.
12 Stability of tenure of personnel:
In order to motivate workers to do more & better work, it is necessary that they
should be assured security of job by management.
If they have fear of insecurity of j ob, their morale will be low & they cannot give
more & better work & also they will not have any sense of attachment to the firm &
they will always be on the lookout for a job elsewhere.
13 Initiative:
Initiative means freedom to think out & execute a plan.
Fayol advises manager to give their employees sufficient scope to show their
initiative.
Employees should be encouraged to make all kinds of suggestions to conceive &
carry out their plans, even when some mistakes result.

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14 Esprit de Corps:
This means team spirit.
Since union is strength, the management should create team spirit among the
employees.
Only when all the personnel put together as a team, there is scope for realizing the
objectives. Harmony & unity among the staff are a great source of strength.
Limitations of Administrative management:
1 It leads to formation of small work groups
2 It results in dissatisfaction of workers because it does not provide them the
opportunity to use all their abilities.
3 Many of the principles are full of contradictions and dilemmas.
4 Ex: unity of command.

Bureaucracy:
Max Weber is known as father of Bureaucracy.
The business & government organizations are distinguished into 3 basic types of
administration
1 Leader-oriented:
In leader-oriented, there is no delegation of management function, all
employees serve as loyal subjects of a leader.
2 Tradition-oriented:
In tradition-oriented managerial position are handed down from generation
to generation who are rather than what you can do becomes the primary
criteria.
3 Bureaucratic:
In Bureaucratic administration, delegation of management responsibilities is
based on the person's demonstrated ability to hold the position, a person
cannot claim a particular position either because of his loyalty to the leader
or because the position has been traditionally held by members of his family.
People earn positions because they are presumed to be capable of filling
them.

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Weber considered this last type as the ideal type of administration.

Important features of Bureaucratic administration:
1. There is insistence on following Standard Rules: Weber believed that the
authority in an organization should not be governed by the personal preferences of
the employer but it should be governed by the standard rules.
2. There is a systematic division of work: This increases production by improving
efficiency and saving time.
3. Principle of Hierarchy is followed: Each lower officer is under the control and
supervision of higher one.
4. It is necessary for the individual to have knowledge and training in the application of
rides.
5. Administrative acts, Decisions and Rules are recorded in writing.
6. There is Rational Personnel Administration: People are selected on the basis of their
credentials and merit and are paid according to their position in the hierarchy.
Limitations of Bureaucratic Administration:
1. Over conformity to rules: In bureaucratic organization employees observe "stick to
the rule" policy because they fear being penalized for the violation of these rules.
2. Buck-passing: In situations where there are no rules, employees are afraid of taking
decisions independently as they may be punished for the wrong decisions. They,
therefore either shift decisions or postpone them.
3. Categorization of queries: In bureaucratic organization probable queries coming
from outside are generally classified in advance into few broad categories. Answers
for each category are also prepared in advance. On receiving a query the employees
job is simply to determine its category.
4. Displacement of goals: The leaders of an organization may begin to devote more &
more of their attention & resources to preserve & maintain the organization itself
rather than its initial purpose.
5. No real right of appeal: The clients of a bureaucratic organization feel dissatisfied
because they have no real right of appeal. Superiors often don't agree with the
viewpoint of their subordinates.

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6. Neglect of informal groups: Worker forms informal groups which play a very
important role all organizations. Bureaucratic organization often ignores the
existence of informal groups.
7. Rigid structure: Precise description of work & over conformity to rules make
bureaucratic structures rigid. Such structures do not cope well with today's changing
environment. Organizations today need flexible structures to be able to frequently
interact with their environment.
8. Inability to satisfy the needs of mature individuals: A mature individual wants
independence, initiative, self-control, opportunity to use all his skills & information
to plan his future. But the hierarchy & control features of a bureaucratic organization
work against these needs.

Modern Approaches:
Three Types namely:
1. Quantitative approach
2. Systems approach and
3. Contingency approach

1. Quantitative approach:
Focus of quantitative approach is on decision making-to provide quantitative tools &
techniques for making objectively rational/logical decisions.
Objective rationality implies an ability & willingness to follow reasoned,
unemotional, orderly & scientific approach.
This approach has been widely used in planning & control activities where problems
can be precisely identified & defined in quantitative terms.
Its uncommon in areas such as organizing, staffing & leading the organization
where the problems are more human than technical.

2. System approach:
The following are key concepts of this approach:

1. A system is a set of interdependent parts:

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An organization is a system composed of 4 interdependent parts namely task,

structure, people & technology.
The task refers to the main purpose of the organization.
The structure refers to formal division of authority & responsibility,
communication channels & workflow. The people subsystem refers to the
employees with their motives, attitudes.
The technology subsystem refers to the tools & equipment, techniques used
by organization.
2. Central to the systems approach is the concept of "holism":
It means that no part of the system can be accurately analyzed apart from the
whole system. Conversely, the whole system cannot be accurately analyzed
without understanding all its parts.
Each part bears a relation of interdependence to every other part.
The system approach tries to give the manager a way of looking at the
organization as a whole, i.e, he must understand the company as a while, as
the activity of any one part of the company affects the activity of every other
part.
3. A system can be either open or closed:
An open system is one which interacts with its environment. A closed
system is one which is independent of the environment.
All living systems are dependent upon their environment for information,
material & energy.
These enter the system from the environment as inputs & leave the system as
outputs. Hence they are called as open systems.
The inputs of business organization are raw material, power, finance,
equipment, technology, new products etc. the organization changes the input
into outputs of goods, services & satisfaction. The transformation process is
known as throughput.
4. Every system has a boundary:
The concept of boundary is useful in several ways, it helps a system in
determining where it ends & where the other system begins.

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It divides those elements that are a part of a system from those that are a part
of its environment.
It enables a system to protect its transformation process from the unexpected
change in the situation of its environment.

3. Contingency approach:
The contingency approach suggests that the task of managers is to identify the
correct techniques that will suit a particular situation & apply them to solve a
problem.
The techniques & methods that are highly effective in one particular situation
may be failure in similar situation other area
Contingency approach suggests that the task of managers is to try to identify
which technique will, in a particular situation best contribute to the attainment of
management goals.
Contingency views are applicable in designing organizational structure, in
deciding the degree of decentralization, motivational & leadership approaches.
It is also applicable in establishing the communication systems, resolving
conflicts, training the employees etc.

Neo Classical approaches:

There are two types:
1. Human relations movement:
The experiments are classified into following 4 parts
1. Illustrative Experiments:
In this phase, experiments were done on a group of workers.
They set up 2 groups of workers in different buildings namely, the control group
and the test group.
In these set of experiments, researchers modified the level of illumination i.e. the
intensity of light, to determine its effect on productivity.
Illumination was not changed for the control group throughout the course of the
experiments, while it was changed constantly for the test group.

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The post- test productivity of 2 groups was compared & it was found that
illumination affected production only manually.
2. Relay Assembly Test room:
This phase aimed at knowing not only the impact of illumination on production
but also other factor's like length of the working day, rest hours, and other
physical conditions.
In this experiment, a work-group of six women who were friendly to each other
were selected and asked to work in a very informal atmosphere under the
supervision of a supervisor.
Productivity and morale increased considerably during the period of the
experiment.
Productivity went on increasing and stabilized at a high level even when all the
improvements were taken away and the pre-test conditions were reintroduced.
The researchers concluded that socio-psychological factors such as feeling of
being important, recognition, attention, participation, cohesive work-group, and
non-directive supervision held the key for higher productivity.
3. Interviewing Program:
The objective of this program was to make a systematic study of the employees
attitudes which would reveal the meaning which their "working situation" has
for them.
The researchers interviewed around 20,000 workers with regard to their opinions
on work, working conditions and supervision.
Initially, direct questions were asked relating to the type of supervision, working
conditions, living conditions etc.
The researchers observed that the replies of the workmen were guarded.
Therefore, this approach was replaced by an indirect technique, where the
interviewer simply listened to what the workmen had to say, the workers were
free to talk about their favorite topics.
The findings confirmed the importance of social factors at work in the total
working environment.

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4. Bank Wiring Observation Room:

The experiment was conducted to study a group of workers under conditions
which were as close as possible to normal.
This group comprised of 14 workers.
After the experiment, the production records of this group were compared with
their earlier production records.
It was observed that the group evolved its own production norms for each
individual worker, which was made lower than those set by the management.
Because of this, workers would produce only that much, thereby defeating the
incentive system.
Those workers who tried to produce more than the group norms were isolated,
harassed or punished by the group. The findings of the study are:-
1. Each individual has restricting output.
2. The group had its own unofficial standards of performance.
3. Individual output remained fairly constant over a period of time
4. Informal groups play an important role in the working of an organization
5. The group had its own unofficial standards of performance.
6. Individual output remained fairly constant over a period of time.
7. Informal groups play an important role in the working of an organization

Behavioral approach
They tried to study workers in terms of their behavior.
Maslow proposed a theory of hierarchy of needs which stated that human needs can be
represented in hierarchy and people needs change to next level of hierarchy as soon as
current level of needs are met.
At the lowest level of needs are
1. Physiological Needs- comprising of food, shelter
2. Security needs - which consists of job, social and other securities
3. Esteem needs- refer to those needs perceived to be desirable by the individual or
group
4. Self-actualization needs that have inner motive from the individual.

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Question Bank:
1. Define management precisely. Explain the characteristics and levels of management.
2. Define management. Explain the nature and characteristics of management.
3. Briefly explain the functional areas of management.
4. Briefly explain, whether management is a science, art or a profession.
5. Define management. Explain the contributions & limitations of Taylor to the scientific
management.
6. Distinguish between administration and management.
7. Explain the roles of management.
8. Explain Fayols 14 principles of admimstrative management.
9. Explain the important features of bureaucratic administration.
10. Write a short note on Human relations movement.
11. Briefly explain the concept of modern management approaches.

VTU QUESTIONS:
1. Define Management. July 2015 (02 M)
2. Explain roles of Management July 2015 (06 M)
3. Explain early management approach. July 2015 (12 M)
4. Define Management. Write various characteristics. July 2013 (05 M)
5. Write various roles of Manager. July 2013 (05 M)
6. Explain any two important Management approaches. July 2013 (10 M)
7. Explain different levels of Management. July 2012 (10 M)
8. Explain what is scientific Management. July 2012 (10 M)
9. Define Management. Briefly discuss the process of management. July 2012 (08 M)
10. Distinguish between administration and management. July 2012 (04 M)
11. List 14 principles of administrative management and elaborate any two. July 2012(08 M)
12. Define Management. Explain its function. July 2012 (10 M)
13. Distinguish between administration and management. July 2012 (05 M)

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Introduction Raghudathesh G P, Lata S H Asst Professor

14. Briefly explain the contributions of F.W Taylor to the scientific management. July 2011
(05 M)
15. Explain different skills and their importance at different levels of management. July
2011 (08 M)
16. What are the nature and characteristics of management? July 2011 (07 M)
17. Define Management. Explain the contributions of F.W Taylor to the scientific
management July 2011 (10 M)
18. Briefly explain, whether management is a science or art. July 2010 (10 M)
19. What is management? Write various characteristics of management. July 2010 (07 M)
20. Explain how management is a science or art or profession. July 2010 (06 M)
21. Explain in briefly the various roles or manager plays. July 2010 (07 M)
22. Define Management. Distinguish between administration and management. July 2010
(04 M)
23. Comment on the true nature of management. Is it a science or art? July 2010 (08 M)
24. Explain the contributions of F.W Taylor to the theory of management. January 2010 (08
M)
25. What is scope of Management? January 2010 (05 M)
26. Bring out the difference between management and administration. January 2010 (05 M)
27. Explain modern approaches to management. January 2010 (10 M)
28. Explain the functions of Managers. January 2010 (05 M)

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