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Management is the art of getting things done through others and with formally organized groups. OR Management is the art and science of organizing and directing human efforts applied to control the forces and utilize the material of nature for the benefit of man. American society of mechanical engineers.

Functional concept-as a process, management is what a manager performs. William Spriegel

Management is the process by which a cooperative group directs action towards a

common goal.

Joseph Messie

Human Relations concept-Management is the art of directing and inspiring people. J.D Mooney, and A.C Railey

Leadership and decision making concept-Management is the art and science of decision-making and leadership.

Management means decision-making

Donald J Clough

Ross Moore

Productivity concept-Management is the art of knowing what to do ------------ in the

cheapest way.

F.W Taylor

Management is a technique of increasing productivity.

--Management means designing, organizing defining goals formulating policies and strategies in accordance with the prevalent environmental conditions and these environmental conditions are known as situations.

--Management is merging quality and variety with cost that is providing unlimited variety of goods, better quality and at lowest price level to the customers.

--Management is defined as a process of identifying problems and threats and taking care of these problems and threats in such manner that ultimately these turn out into opportunities which could benefit the organization in accomplishment of its objectives.


In latest view:

Now a days in corporate sector taking advantage of the opportunities does not matter. What matters is to convert or translate the opportunities then to face difficulties.

Definitions based on mixed views:

Good management achieves a social objective with the best use of human and material energy and time and with satisfactions for the participants and the public. Mary cursing Niles

Management is the direction of human behaviour towards a particular goal or objective.


On the basis of all the above-mentioned definitions it can be asserted. Management is the process which by planning, organizing, staffing, leading and controlling, a human group makes possible the maximum and efficient use of physical resources and helps in realizing the pre- determined objectives of any organization.

------In modern times when human needs are continuously rising, it is absolutely impossible to fulfill them single-handed. In such a situation the need of group activity is felt. Man cannot produce any single thing by himself alone and there is always the necessity of a human group whose activities and be named collective effort. Thus on human group produce one particular produce while another such group produce something different and hence, human needs are fulfill by collective efforts of different human groups. Now the question arises whether all the people’s comprising a particular human group are competent enough to achieve success in their activities without any outside discussion and control. The obvious to this all-important question can only be in the negative. The reason for such an answer is complex. So long particular human groups for into have their air aims, definite planning, proper distribution of work, defining rights and duties, establishing proper co- ordination among them, directing and controlling their activities, success cannot be achieved. These are the problems, which give rise to another question, which is equally important, and the question is how to overcome these problems? The answer to this really complex question in inherent in management. Through the medium of management all these above-mentioned problems can be solve. The activities of a human group can be efficiently managed on the pre-determined problems can be effectively achieved handling by a manager. It would not be out of place to mention here that the absence of proper management, the activities of a human group are like a ship without a captain. Thus it is evident that success of collective efforts requires some special power. AND THAT POWER IS THE MANAGER, who ensures the success of different activities by the


process of management. It is important to classify here that the importance of management is not limited to business alone but it is needed at all those places where human activities take place-for example: educational Institutions, Religious Institution, Govt. departments, unions, forces, families.

MEANING OF MANAGEMENT “Anything minus Management is nothing”

--‘Sherlekar and Sherlekar’—


The word “management” can be styled as MANAGE-MEN-T. That means manage men tactfully. Why manage men tactfully. This is with a view to get the things done being with them. Thus management means managing men tactfully to get the things done being with them. Thus management. In order to manage men tactfully, one has to understand the highly unpredictable and uncertain human nature owing to this management is very complicated and challenging activity. Some times it is known as a group of administration officers working in a particular institution and sometimes it means a process of planning, organizing, staffing, directing, co- coordinating and controlling. In the light of different opinions the meaning of management can be analyzed in the following ways:


Management as a process: some times it is defined as a process. A process has means that different activities like planning, organizing, staffing, leading, controlling through a definite process.


In other words, management is a definite process when coordinates different activities for the attainment of an aim or target set by an institution or organization.


Management as a discipline: management is fast emerging as a discipline. Discipline here means a separate and recognized subject, which has its own identity. Management is also being recognized as separate syllabi because it has its own thoughts, principles and methodology.


Management as a economic resource: economists have accepted management as a resource of production like other resources (land, labour, capital, material and machine). Production is not possible without these basic things.


Management as a noun: when it is addressed as a noun, it is related to those persons who get other people’s work completed. E.g. board of directors, managing, general manages etc.


Meaning of management at glance:


As an activity: getting things done through others being with them.


As a process: a series of interrelated functions performed in all organizational.


As a discipline: a subject of study drawing upon knowledge of others disciplines. A young and growing discipline.


As a group: a body of persons who perform the task of managing organization. An elite group in the society.

Nature or Characteristics of management:


Goal oriented.



Management is a







distinct entity.




Integrated process


Management is a




Social process







Activity based








Group activity
















It is needed at all






Multi disciplinary





























(xviii)It is an executive





































After a careful study of definitions we embark upon such features, which illustrate the nature of management. Such features are as follows:

(i) It is a process: process means a systematic method of doing some work. Management is recognized as a continuous process. It is that process in which work is done with others or it is got done from them. In order to achieve the pre-determined objective a


manager performs the work of planning, organizing, staffing, leading and controlling. A manager did these works in a continuous order. So, it is a process.


Group efforts: management always efforts to group efforts and does not apply to an individuals. A group rather than an individual can easily and effectively attain management of an enterprise.


It is a social process: management is called a social activity because it is connected with the people working in a human group and which requires organizing their efforts. Any activity, which is connected with the people living in society, is called a social activity. In this context management is also described as a social activity.


Attainment of pre-determined objectives: group efforts in management are always directed towards the achievement of some pre-determined objectives; with out objectives management would be difficult if not impossible.


Management has a distinct entity: in view of the widening scope of business it is not possible for an owner to perform all functions himself. We can say that specially qualified experts are needed for managing the company.


Management is a universal activity: it is clear that management is not only connected with business but also with non-business activities also, which is also important. Management is everywhere.


Management as a profession: when we have recognized the distinct entity of management, there should not be any doubt or hesitation to call it a profession. The quality of a profession is that he must posses some special qualifications or ability for which he is paid remuneration. The knowledge of management is also a qualification and managers also get their remuneration for it. Hence, management is considered a profession.


Management is an intangible force: management is a force, which is not visible. It can only be feel or realized on the basis of the success of an organization.


It is a combination of multiple functions: the basic function of management is to achieve the objectives of the organization successfully. That is why a manager has to perform various function like planning, organizing, staffing, leading and controlling etc. hence management does not mean one particular job but it happens to be a combination of various jobs.

MANAGEMENT – Art, Science and Profession:

As a science: systematic body of knowledge, universal principles, scientific experiments, cause and effect relationship, validity and predictability.

As an art: practical knowledge, personal skill, creativity and continuous practice.


As a profession: specialized body of knowledge, formal education service motive, representative association and code of conduct management is not a full-fledged profession.



Main features of art are:


Art involves the application of knowledge and skills to achieve desired results.


Art is essentially creative and the success of an artist is measured by the results he achieves.


Art is a personalized process as every artist has his own style or approach.


Art prescribes row to do things and it can be improved through continuous practice.

Management is essentially an art because:

Firstly, the process of management involves the use of knowledge and skills in solving various problems. It seeks to achieve concrete practical results that is output, profits, growth etc.

Secondly, Management is creative as the manager creates new things and improves upon the old things.

Thirdly, Management is a personalized process every manager has his own approach and techniques to solve problems, depending upon the environment in which he works.

Lastly, the manager gets perfection in the art of managing through continuous practice. Thus management fully lives up to the description of an Art and therefore it is an art.


Art implies the application of knowledge and skills to bring about the desired results.


1. Practical knowledge: every art signifies practical knowledge. An artist must not only learn the theory but also its application in practice. Similarly a person cannot become a successful manager simply by reading the theory if must also learn to apply his knowledge in solving managerial problems in practical life. A manager is judged not just by his technical knowledge but his efficiency in applying that knowledge.

2. Personal skill: every artist has his own style and approach to his job. This is level of their personal skill. Similarly every manager has his individual approach and style on solving managerial problems. The success of a manager depends on his personality in addition to his technical knowledge.



Result oriented approach: art seeks to achieve concrete results. Every manager applies certain knowledge and skills to achieve the desired results. He uses CM’s to the growth of his organization.

4. Creativity: art is basically creative therefore every piece of art requires imagination and intelligence to create. A manager effectively combines and coordinates the factors of production to create goods and services.

5. Improvement through practice: every artist becomes more and more efficient through constant practice. Similarly a manager gains experience through regular practice and becomes more effective.


One cannot become efficient and effective manager simply by learning. Management principles by heart it also requires practical application of those results.


Main features of science are:


Science is a systematized body of knowledge.


It is based on cause and effect relationship.


The scientific study is based on observation and experiments.


The principles of science have universal validity and applicability.

Management is a science because:

According to the given information about science, management is also a systematized body of knowledge. It consists of various concepts, principles and techniques developed through observation and experience. These principles are universal in nature and establish on cause and effect relationship. But the methods of observation followed by management are not purity objective because the subjects are human beings whose behaviors cannot be predicted with absolute accuracy. Thus management cannot be regarded as an exact science like physics and chemistry. It deals with the study of behavior of human beings, which is subject to constant changes and difficult to predict. Thus management cannot be regarded as exact science like physics, chemistry etc. therefore management may be called an inexact science, as is the case with other social science like psychology, sociology.

OR Science means a systematic body of knowledge pertaining to a specific field of study. It contains general principal and facts which explains a phenomenon.



1. Systematic body of knowledge: management is a systematic body of knowledge consisting of general principles and techniques. These help to explain events and serve as guidelines for managers in different types of organization.

2. Universal application: scientific principles represent basic facts about and a particular field of enquires. These principles may be applied in all situations and at all times. Management contains some fundamentals principles, which can be universally applied. These principles are flexible and need to be modified in different situations.

3. Scientific enquiry and experiment: scientific principles and derived through scientific investigation and reasoning. So they can be explained logically, scientific principles are critically tested. Management principles are also based on scientific enquiry and investigation. These have been developed through practical and experimental experience of a large number of managers.

4. Cause and effect relationship: principles of science lay down a cause and effect relationship between related factors; similarly the principles of management establish cause and effect relationship between different variables.

5. Test of validity and predictability: validity of scientific principles can be tested at any time and any number of times. Every time the test will give the same result. Principles of science can also be tested for their validity.


Management is not a perfect science like other physical science such as astronomy, physics, chemistry, and biology etc. management deals with people and it is very difficult to predict their behavior accurately so management is a social science.

Management as a profession:

A profession is a caving that requires specialized knowledge and often long intensive academic preparation:


1. Specialized body of knowledge: every profession has a well-defined body of knowledge relevant to the area of specialization. In order to practice a profession a person requires specialized knowledge of its principles and techniques. There exists a substantially and rapidly expanding body of knowledge in management. Today, management is a separate discipline having a specialized and organized body of knowledge.

2. Restricted entry: there exist institutions and universities to impart education and training for a profession. No one can enter a profession without going through the prescribe course of learning. Many institutions have been set up which offer courses for specialized


training in management. Formal education and training has become very helpful in getting jobs as managers.

3. Service motive: a profession is a source of livelihood but professional are primarily motivated by the desire to serve the community. A profession enjoys community sanction or respect. A manager of a factory is responsible not only to its owners, by the is also expected to produce quality goods at reasonable costs and to contribute to the well being of the community.

4. Representative association: in every profession there is a statutory association or institution, which regulates that profession. Managers have formed certain associations for the regular exchange of knowledge and experience.

5. Code of conduct: members of one profession have to abide by a code of conduct, which contains rules and regulations providing the norms of honesty integrity and professional ethics. The representative association to ensure self-discipline among its members enforces the code of conduct. Any member violating the code can be punished and his membership can be cancelled.



Management fulfills several essentials of a profession but like other professions management does not restrict entry into managerial jobs, to people with a special academic degree.

Objectives of management at a glance


Securing maximum results with minimum efforts.


Maximum prosperity for employer and employee.


Human better mere


Elimination of all types of waste


Economic growth


Social justice

Importance of management at glance:

1. Achievement of group goals

2. Optimum utilization of resources

3. Minimization of cost

4. Survival and growth of business

5. Generation of employment

6. National development


According to Drucker, management is a dynamic and life-giving element of every business. In its absence the means of production remain merely the means and can never be the producers. We know that not only in the field of business but in other fields also management has come to occupy an important place. In this reference, it is said that “any thing minus management is nothing.” These are some topics, which clearly highlight the importance of management.

1. Achieving pre-determined objectives: each organization is established with

certain aims. Management is the only power and medium which can help in the successful attainment of these aims. A manager with the help of his expertise and

cleverness makes and assessment of the future events and finally by his corrective action makes the impossible took simple.

2. Maximum utilization of resources of production: management is that power

which by establishing an effective coordination between the various resources of production makes an optimum use of these resources. Most efficient use of the limited


resources is the key to the successful business and thus this fact can be converted into reality with the help of management.

3. Overcoming competition: these days business is not localized but it has

assumed national or even international dimensions. Competition is increasing day by day. In these competition days only that organization can survive which can make available to its customers the best quality of goods at the cheapest rates. Only an efficient and clever manager can make it a reality and save the reputation of an organization.

4. Integration with changing environment: management is not only limited to

various internal function of an organization but it has to compromise with the outer atmosphere also. So many goods having modern techniques are in the bazaar customers accept only those products which are cheap and the best. With the help of efficient and effective management a co-ordination between the new and prevalent work system and methods can be established to save the reputation of an organization.

5. Research and investigation: a recent research has brought out the fact that

only those companies or business enterprises which are constantly taking interest in research activities are developing very fast.

6. Increased profits.

7. To maintain a sound organizational structure.

8. Fulfilling the social responsibility: Sound management monitors the

environment of business and makes necessary changes in the business policies and

practices so as to keep the consumers and workers satisfied to this way manager’s help an enterprise to fulfill its obligation towards different sections of society.

9. Management minimizes risks.

10. Reduces cost of production.

11. Economic growth: Management is the catalyst of economic growth,

development is a matter of human energies rather than of economic growth and

generation of human energies is the task of management. Management is the mover ad development in the consequence.

12. Stability: management ensures the survival of an organisation in a fast

changing environment. It co-ordinates the activities of different departments in an organisation and maintains team spirit amongst the personnel.

13. Human development: Management is not simply directions of things but the

development of men. It improves the personality and caliber of people to raise their efficiency and productivity. A good manager serves as a friend and guide to his subordinates.

14. Meets the challenge of change: Management is a catalytic force that enables

an organisation to face the challenge of change. The environment of business has become

very turbulent. Managers maintain a dynamic equilibrium between an enterprise and its environment through innovation and creativity.



On the basis of different opinions of the experts over the world management and administration, there are three prevalent concepts: -


American concepts: Administration is a higher-level activity or system and management is lower.


English concepts: management is the higher-level system and it has more power than administration.


Modern concepts: According to it, management and administration are synonymous. In the modern scientific age of management this is the most prevalent and accepted concept of management and it makes no difference between management and administration.












It means the determination of objectives, plans and policies of an enterprise.

Management is to translate threats into opportunities.



Administration aims at determining the objectives.










Administration is a decision making function.

Management is an execution or doing function.



Administration decides what is to be done and when it is to be done.

Management decides who will do the function and how he will do it, where he will do it.



The term administration is applicable at the top level of management.

The term management is more applicable at middle level and lower level of management.



The term administration is generally used from business organizations like govt., offices, colleges, universities etc.

Management is generally used with reference to business enterprises.




Administration decisions are influenced by govt. policies, social and political circumstances and economic additions.

Management decisions are mainly influenced by the target of enterprise.





Administration is related mainly with the owner and top-level managers.

Management is related with the workers and employers of organization.



a thinking function.


















It concerned



determination of major object and policies.

implementation of policies.







It is largely a middle and lower level function.





Its services are influenced mainly by public opinion and other outside forces.
















It is not directly concerned with direction of human efforts.

It is a activity concerned with directions of human efforts in the executions of plans.



Planning and controlling are the main functions involved in it.

Directing and organizing are main functions involved in it.



Conceptual and human skills used eagerly in govt. and public sector.

Technical and human skills used mainly in business organization.



Minister, Commander, Commissioner, Registrar, Vice - Chancellor, Governor etc.

Managing director, general manager, sales manager, branch manager etc.


The management levels may be classified as follows:


Top management


Middle management


Supervisory or operating management


Top or executive management:


Top management refers to the managing at the highest level in the management hierarchy. It is the ultimate source of authority. It is held responsible for the general success or failure of the organization. Top management consists of the board of directors and the chief executive or managing director they establish overall long-term goals and plans of the organization. It is their responsibility to ensure success of the organization. It is basically an organ of overall review and control. Chief executive is concerned with the overall management of the company’s operations. He maintains coordination among different departments of the company. He also keeps the organization in harmony with its external environment.



To analyse and interpret changes in external environment of the company.


To establish long term corporate plans.


To formulate and approve the master budget and departmental budgets.


To design broad organization structure.


To appoint departmental heads and key executives.


To coordinate and integrate the activities of different departments and divisions of the company.


To provide overall direction and leadership to the company.


To exercise the overall review and control of the financial and operating results of the company.


To represent the company to the outside world.


To decide the distribution of profits.

Intermediate management:

Intermediate or upper middle management comprises departmental or divisional heads. E.g. works manager, marketing manager, finance manager etc. It is also known as departmental or functional management. Every divisional head is the overall uncharged of one particular division or department. He is accountable for the performance of his division or department to the chief executive. He performs the usual managerial functions of planning, organizing, staffing, directing and controlling in relation to one department. He coordinates and controls the activities of all personal working in different branches of his department.

Middle management:

Middle management consists of all sectional heads. E.g. plant manager, area sales manager, branch manager, office manager etc. These executives serve as a link between intermediate or top management and the operating management.




To interpret and explain the plans and policies formulated by top management.


To control the operating performance.


To cooperate among themselves so as to integrate the various activities of department.


To train, motivate and develop supervisory personal.


To lay down rules and regulations to be followed by supervisory personnel.

Supervisory or operating or first-line management:

This is the lowest level of management in an organization. It consists of supervisors, foremen, sales officers, and purchase officers etc. supervisors and operating managers maintain close contacts with rank and file workers and supervise day-to-day operations. They are concerned with the mechanics of jobs.


1. To plan day-to-day production with is the goals laid down by higher authorities.

2. To assign jobs to workers and to make arrangements for their training and development.

3. To issue orders and instructions.

4. To supervise and control workers operations and to maintain personal connection with them.

5. To arrange material and tools is maintain machinery.

6. To advice and assist workers by explaining work procdures, solving problems etc.

7. To maintain discipline and good human relations among workers.

8. To report feedback information and workers problems to the higher authorities.


(a) Process of management: it includes six m’s.

1. Men

2. Money

3. Machine

4. Material

5. Market

(b) As a profession: you need proper degree. There are certain legal rules.



In order to have a proper achievement of good and in order to have plan to be properly worked on a manager must have certain skills such as: -


Conceptual skills: A manager must have conceptual knowledge of


management. Each principle and concept should be clear in the mind of a manager and he should be effectively able to apply him. Technical skills: it is concerned with the application of skill or


knowledge acquired. Management does not simply mean the knowledge of principles of management rather it is its application which makes its effective. Human skills: A manager should have Psychological knowledge. He


should able to deal with different persons in different circumstances. Decision making skills: in crucial times a manager should be able to have the ability of making decisions. These decisions must be effective and practical in use as well.



Manager should have social responsibility for the people. Because manager is a person who is very skilled, if he will take interest in the social functions or problem, it will create a good impression on other people living or working under him it will motivate the sub-ordinates working under him. Thus, it creates a favorable impression on the society, which will ultimately helps the business. Managers have a creative and also communicative skill. As their main task is to have the cordial relations with people inside the organization or outside the organization. The had to interact with his subordinates, superiors and other members relating to business. So, the managers are very creative and if they will take part in social problems, the society is bound to improve in some kind or others. Managers take the input from the society e.g. education values etc. if managers will take part in social event or they will become responsible towards society, the society is sure to make progress become one man can change the whole environment. It will thus create the source of motivation towards the society. According to System theory, for the efficient working and smooth working small sub-systems should work properly.



The main function of the manager is to govern his organization smoothly and efficiently. So, he should not make himself responsible towards the society. He should not be able to do his work properly. The social problem should be left for those people. So generally take the responsibility (political parties, interest groups etc) of improving are solving the problem of the society. Manager takes the salary for gobering his organizing properly not for solving the social problem of the society. Thus, manager should not move his mind towards social responsibilities of the society.


There are many thinkers who have supported this, but there are others who have expressed their opinion both sides are given as under:-

Arguments against social responsibility:

1. Contrary to the objective of business: Just as the primary objective of players in the play-ground is to achieve victory, in the same way the chief objective of business is to enhance its profits by utilizing its, resources.

2. Inefficiency in the system: there is no power other than self-interest, which can get work out of people. It owners of business, by ignoring self-interest, start thinking of social responsibility the whole work-system will turn inefficient.

3. Effects of business values: Business should not have any social responsibility otherwise social values will come to be dominated by business values, which in itself is a painful delaminate. It means that when business is alive to its social responsibility, the people in the beginning will be so thoroughly impressed by it, that in future business will come to occupy a position of predominance the idea of social responsibility of management opinion against.

4. Conflicting consideration: A business manager will be guided by two considerations, namely, private market mechanism and social responsibilities which are opposite to each other.

5. Arbitrary power: Business managers will get arbitrary power in the matter of allocation of resources in the welfare of the society. They should have no right to interfere with the external environment of business.

6. Disregard of marketing mechanism: the doctrine of social responsibilities implies acceptance of socialist view that political mechanism rather than market mechanism is the appropriate way to allocate scarce resources to alternative uses.



Burden on customer: if the price in the market for a product does not truly reflect the relative costs of producing mechanism of the market place will be distorted. The consumers will have to pay higher costs.

8. Difficult implementation: the concept of social responsibility is ill conceived and ill defined and is difficult to be implemented.

Argument for social responsibility:

1. Business is a part of society: Since business organizations are a part of society they must have a positive attitude towards the needs of society. Business is only a sub- system of society and this sub-system must contribute to the welfare of the main system.

2. Avoidance of govt. regulation: If business does not care of its social responsibility, the govt. has to interfere increasingly in the business system, which adversely affects the progress of business.

3. Long term self-interest of business: the social responsibility of business, if taken care of in the present ensures the success of the organization in the future.

4. Code of conduct: Members of a profession are bound to follow a code of conduct. Code of conduct includes rules connected with profession, honesty and morality, which form its base.

5. Business is a creation of the society and so it should respond to the demands of the society: Since business uses the resources which belong to the society. It is necessary that every business are obliged to use the social resources for the common good of society.

6. The long-term self interests of the business are best served when business assumes social responsibilities: There is a growing realization on the part of the enlightened businessmen that it is in their self-interest to fulfill the demands and aspirations of the society. People who have good environment, education, and opportunity make better employees, customers and neighbours for business than those who are poor, ignorant or oppressed.

7. It is the moral and right thing to do: It is widely agreed that businessmen today have considerable social power. This power is virtually granted to them by the society, which must have a general relationship with social responsibilities. The social responsibilities of businessmen must be proportionate to their social power. If the businessmen do not assume social responsibilities, their social power must be taken away by the society through government controls and regulations and other measures.

8. Public image of business would be improved: The business will retain the needed credibility with the public if it performs its social obligations. It will also avoid


conflict with the society in its own interest. Good relation with the workers, consumers and suppliers will lead to success of business.

9. The consumers are well informed: They expect higher quality products at responsible rates. If they don’t get fair treatment form business, they will organize themselves and compel the business its social responsibilities.


1. Planning skills: the manager must passes the skills of thinking the skills of analyzing the environment, it includes what is happening in the society organization and political system. He must be able to assess or guess the changes in environment, traits offered by the changes in environment. He must be able to match two sets of environment on the basis of external and internal analysis.

2. Organizing skills: organizing skill is needed to specify who will achieve what and how manager must be in a position of identification of specific activities and specific jobs. A manager must be clear about grouping of various jobs, span of management, type of relationship to be established between various people and various jobs.

3. Leading skill: leadership is the ability of individual to influence the people. Recognition of human factor is also included in leading skill of human factor various leadership track like communication and motivation are also included in the leadership skills.

4. Technical skills: technical skills refer to the ability and knowledge in using the equipment, techniques and procedures involved in performing specific tasks. These skills require specialized knowledge and proficiency in mechanics of a particular job. A manager must know which skills should be employed in his particular enterprise and be familiar enough with their potentiality to ask discerning question of his technical advisors.

5. Human skills: human skills consist of the ability to work effectively with other people. These are required to win co-operation of others and to build effective work teams. Human skills are reflected in the way a manager perceives his superiors, subordinates and peers. An awareness of the importance of human skills should be part of manager’s orientation.

6. Conceptual skills: conceptual skills comprise the ability to see whole organization and interrelationships between its parts. These skills refer to the ability to visualize the entire picture or to consider a situation in its totality. Such skills help the manager to analyse the forces working in a situation and to take a broad and foresighted view of the organization.

7. Diagnostic skills: it includes the ability to determine by analyzing and examination, the nature and circumstances of a particular condition. It is not only the ability to specify why something happened but also the ability to develop certain possible outcomes. It is the ability to it through unimportant aspects and quickly gets though the heart of problem.



Controlling skill: there are certain standards, which are fixed in a way such that

accomplishment of those standards leads to the accomplishment of goals. A manager must keep check on the activities of subordinates and must rectify them if there are any problems.

9. Decision making skills: there are two types of decisions to be taken by the manager.


Routine and program decision


Non-routine and non-program decisions.

The course of action to be followed is as under:

1. The manager must be in a position to identify the problem.

2. Reaching to the main cause or the problem.

3. Searching for the alternative solution.

4. Comparing merits and demerits of each solution.

5. Selecting the best course of action.

6. Formulating the plan by the application of the alternatives.

Responsibilities of manager:

1. Responsibility towards suppliers: people who supply raw material, mechanical components, financial institutions and advertising agencies. It is the duty or says responsibility of the manager that the suppliers are being paid at the time.

2. Responsibility towards distributors: it is the responsibility of the manager to check regular supply of the product. Product must be checked for the quality, packaging (as in

the case of children packaging plays a very important role). There must be free testing of goods that is distribution of samples. There should be fair return on investment that is fair commission must be paid. To motivate them the organisation must reward them, credit facilities must be made available to the middle class people etc. You can survive in the vest way if the industry will survive:

a. You can take the advantage by showing collectiveness.

b. Compiling with the norms lay down by the association.

c. Providing correct information to organisation.

d. Sharing latest knowledge.

e. Supporting the individual members of the association.

f. Indulging in fair and ethical competition.

g. Not using any political or other strategies.

3. Responsibility towards union: employees union is recognized as the enemy of the organisation.

4. Responsibility towards govt.: Birth growth and death of any organisation will generate according to statuary provisions and these will be governed by the government of the organisation and this can be done by



Sending the correct information.


Taxes and duties must be paid regularly.


Organisation must try to operate as a model citizen.


Organisation must not try to damage the culture of that area and must try to maintain the rich culture of that area.

5. Responsibility towards customers:

6. Responsibility towards society:

7. Responsibility towards competitors:

8. Responsibility towards workers:

9. Responsibility towards shareholders or owners:

Roles of a manager:

There are different types of managerial roles some of them are given below:

1. Figurehead: In this role manager performs symbolic duties required by the status of his office. Making speeches, bestowing honors, welcoming official visitors, distributing gifts to retiring employees are examples of such ceremonial and social duties.

2. Leader: This role defines the managers relationship with his own subordinates. The manager sets an example, legitimizes the power of subordinates and brings their needs in accord with those of his organisation.

3. Liaison: It describes the manager’s relationship with the outsiders. A manager maintains mutually beneficial relations with other organisations, governments, industry groups etc.

4. Monitor: It implies seeking and receiving information about his organisation and external events. An example is picking up a rumor about his organisation.

5. Disseminators: It involves transmitting the information’s and judgments to the members of the organisations. The information relates to internal operations and external environment. A manager calling a staff meeting after a business trip is an example of such a role.

6. Spokesman: In this role, a manager speaks for his organisation. He hobbies and depends his enterprise. A manager addressing the trade union is an example.

7. Entrepreneur: It involves initiating changes or acting as a change agent. For example a manager decides to launch a feasibility study for setting up a new plant.

8. Disturbance handler: This refers to taking charge when the organisation faces a problem or crises. For example a strike, feud between subordinates, boss of an important customer. A manager handles conflicts, complaints and competitive actions.

9. Resource allocate: In this role a manager approves budgets and schedules sets priorities and distribute resources.

10. Negotiator: As a negotiator a manager bargains with suppliers, dealers, trade union’s agents etc.


Functions of management:

1. Planning:

It is a process of thinking before doing. It involves determinations of goals and the activities required to be performed to achieve the goals. It consists:

What is to be done?


How it is to be done?


Where it is to be done?


When it is to be done?


By whom it is to be done?

So planning is a process of shorting out the path for attaining the determined objective of

the business. Over all planning is deciding that in present, what is to do in future.

2. Organising:

Organizing refers to the way in which work of a group of people is arranged and

distributed among the group members to achieve the objectives of an organisation. As a function of management organizing refers to the following:


Bringing together human and non-human resources that is the work to be done and its distribution in human resources.


To define and establish authority responsibility relationship for the achievement of goals.


Determination of objectives.


Division of activities into jobs


Fitting individuals into jobs, and


Developing relationships.

In conclusion we can say that organizing refers to distribution of work to the superiors and sub-ordinates and fixing there authorities and responsibilities.

3. Staffing:

Staffing is the process of determining the manpower requirement that could meet the company’s objectives. Staffing is a managerial function of attracting, acquiring, developing and maintaining the human resources required to achieve the organisation objective efficiently.

Staffing also involves upgrading of quality/skills of the staff to get higher performance from then. Personnel department of an organisation looks after the function of staffing. Staffing usually includes the following activities:


Human resource planning.


Announcing vacant positions, that is recruitment.


Receiving applications.



Administering test.




Medical test.


Final selection and appointment letter.


Orientation and placement.

4. Directing or Leading:

Directing as a function of management is concerned with instructing, guiding and

inspiring people in the organisation to contribute to the best of their capabilities for the achievement of organizational objectives. As a conclusion directing includes the following:


Communication: it is the process of passing information and understanding from one person to another. This process is necessary for making the subordinates understand what the management expects of them. A manager has

always to tell the subordinates what to do, how to do it and when to do it. He has to create an understanding in their minds in regard to these matters.


Leadership: a good manager must also be an effective leader. Leadership is concerned with influencing the behavior of followers. In order to get the cooperation of employees, the manager must have leadership skills. The style of leadership will vary from situation to situation.


Motivation: effective motivation is necessary for getting voluntary cooperation of the subordinates. Different types of rewards motivate different people. Every manager should study the behaviour of individuals working under him to provide him or her proper inducements. To some financial incentives are important, while others are motivated by non-pecuniary incentives like job security, job enlargement, freedom to do work and recognition.


Issuing orders and instruction by the superior.


Leading the subordinates to influence their activities towards achievement of goals.


To ensure that the subordinates are working as per plans and policies.

5. Controlling:

Controlling is a process of verifying whether actual performance is in accordance to the planned performance and to take corrective action wherever required. It involves comparison of actual performance with the planned performance as to quality,

quantity, time taken etc. and than analyse the deviations and to take corrective measures to correct the deviations. It involves the following steps:

1. Establishment of standards.

2. Measurement of actual performance.

3. Comparison of actual performance with the planed performance.

4. Find out deviations.



Taking corrective action.


The term ‘ethics’ refers to value-oriented decisions and behaviour. The word ethics comes from the Greek root, ethros, meaning character, giving beliefs, standards, or deals that pervade a group, a community, a people--------. Today ethics is the study of moral behaviour— the study of how the standards of moral conduct among the individuals are established and expressed behaviourally. Terms such as business ethics, corporate ethics, medical ethics, or legal ethics are used to indicate the particular area of application. But to have meaning, the ethics involved in each area must still refer to the value-oriented decisions and behaviour of individuals. Ethics refer to a set of moral principles, which should pay a very significant role in guiding the conduct of managers and employees in the operation of any enterprise. Ethics is concerned with what is right and what is wrong is human behaviour. It is normative and prescriptive, not neutral. It addresses the question of what ought to be. Ethics refer both to the body of moral principles governing a particular society or group and to the personal normal precepts of an individual. Some people subscribe to a utilitarian reference in determining what is wrong and what is right. They hold that a proposed course of action should be judged from the standpoint of greatest good for the greatest number of people. From this point of view, there are few absolute standards and each issue must be judged by studying its impact upon all affected parties.



The term ‘social responsibility’ conveys the moral conduct that relates to such broad issues as environmental pollution, discrimination, poverty, unemployment and inflation. Accordingly, an organization whose practices contribute to inflation, unemployment, increased poverty and like would be viewed as socially irresponsible---as not fulfilling its responsibility to society. An automobile manufacturer who produces cars with faulty brakes, a pharmaceutical house that makes false claims about its comd remedies, or a food company house TV ads promote substandard food items are socially irresponsible. Some people feel that social responsibility is linked to organisation and ethics to individuals, but this is not a useful distinction. In the final analyses, decisions are made by people and therefore, individual managers at some level must assume responsibility for every corporate decision. The executive who lies about a competitor’s product, the manufacturer who markets a highly inflammable article of clothing, the industrialist who dumps pollutants into a stream-all behaves in an ethically irresponsible way. The most responsible way to distinguish business ethics from social responsibility is in terms of a decision’s implications for society as a whole. Within this frame of reference, business ethics are concerned with microethics (relating to daily operating decisions with limited social impact), social responsibility is concerned with macroethics relating to decision with broad implications for a large segment of society. However this distinction is not even followed in practice. The term ‘ethics’ is used to convey both ‘microethics’ and ‘macroethics’.


The problem of laying down managerial ethics is more complicated than it is in established professions such as medicine and law. The physician and lawyer understand clearly that their responsibility is to the patient or the client. The manager is torn between the interests of owners, employees and customers so that the “client group” is often impossible to identify and isolate. Whereas the physician’s actions are “ethical” if the patient’s interests are served, the manager enjoys no such security. Established medical and legal associations have the legitimate authority to enforce standards of behaviour. There is no comparable management organisation that possessed the right to enforce ethical standards. Therefore, we have great difficulty in resolving the problems caused by questionable acts such as paying bribes or similar actions unless a law is violated. In management, the legal system also becomes the ethical system and where higher standards of behaviour than those required by law are desired, there is no way to enforce them. There are four ways to establish acceptable standards of behaviour. The first is the establishment of minimum standards of behaviour by law. But if law dictates ethical behaviour,


the true meaning of personal morality, individual responsibility and free choice is lost. Secondly, an attempt should be made to develop accepted code of ethics to guide managerial action. In India and other countries, management associations have attempted this approach. But how to enforce the standards and make allowances for organizational and environmental differences is the main problem. The third approach is to follow the lead of medicine, law, engineering and accounting and establish a professional society to enforce codes of behaviour for the managers. This option would, however, require a new type of management organisation with mandatory membership, professional certification, and so on. Nothing approaching this presently exists. Any move n this direction would be, at best, long-range in character. One final option is the development of individual organizational code of behaviour. This idea has a great deal of support and short- term promise. But the individual organizational codes do not provide for uniform standards required of business.



1. Classical (Traditional) approach:


Bureaucracy (Weber’s)


Scientific management (Taylor’s)


Management process school (Fayol) (Administrative theory)

2. Human relations approach (Neo-classifical approach) (Elton mayo) (It helps in loving and caring the employees, it held the stress on social aspects only):

3. Behavioural science approach (Neo-classifical approach):

4. Systems approach (Modern approach) (There should harmony among the sub-systems and among different departments of organisation):

5. Contingency approach (Modern approach) (different theories needed for different situations):

6. Quantitative approach (Modern approach):

Classical theory:

The classical organisation theory is also called the traditional theory. In this theory, we shall discuss the ideas of several contributors such as Taylor, Fayol, Luther Gulick, and Max Weber. All these thinkers were dissatisfied, in one way or the other, with the organizational practices of their time. The classical organisation theorists dealt almost exclusively with the anatomy of formal organisation. Organisation is treated like a machine and so making each individual, working in the organisation efficient, can increase efficiency. For instance, F.W. Taylor emphasized on division of labour, fixing everybody’s work for the day and functional formanship. That is why; Taylor’s scientific management has been referred to as ‘machine theory’. It may be noted that scientific management group emphasized efficiency of lower levels of organisation. It was Henri Fayol who showed concern for efficiency at the higher levels for the first time.



The classical theory is more or less mechanical in nature as is revealed by its following features:


Classical organisation theory is built around an accounting model.


The relationship between workers and management is established through formal communications, defined tasks and accountability and formalized procedures and practices to minimize conflict between them.


The worker is essentially an ‘economic man’ who can be motivated basically by economic rewards. Money is considered the main motivator under this theory.


This approach to the organisation is the embodiment of the extra pair of hands concept.


In designing the hob and in picking the extra pair of hands, classical theory assumes man to be relatively homogenous and relatively unmodifiable.


Stability of the employees-stability in the sense of minimizing changes within the employees-is a goal in the organisation.


Classical theory is in its essential character centralized, and the integration of the system is achieved though the authority and control of the central mechanism.

Criticism of classical theory:

The classical theory is criticized on the following grounds:


Closed system: Classical theorists have viewed organisation as a closed system, that is, having no interaction with the environment. This assumption is totally unrealistic. A modern organisation is an open dynamic system, which has interaction with the environment.


Unrealistic assumption about human behaviour: The classical writers lacked sensibility to the Behavioural dimensions of an organisation and made over-simplified and mechanistic assumptions for the smooth running of organisation ignoring all complexities of human who perform tasks assigned to them and ignored their social, psychological and motivational aspects of human behaviour. Human behaviour is most unpredictable and complex. This assumption of classical writhers led the workers to frustration, conflict and failure and thus made ‘man’ subordinate to the organisation.


Inadequate emphasis on human beings: the interplay of individual personality, informal groups and inter-organisational conflicts in the formal structure appears to be neglected by the classical writers. Bennis feels that the focus of classical theory is on ‘organisation without people’.


Economic rewards as main motivators: the assumption that people at work can be motivated solely through economic rewards is also wrong. Several researches in human behaviour have contradicted this assumption. Non-monetary factors like better status and job enrichment can also motivate the workers.


Hierarchical structure: the classical theory is based upon the hierarchical structure that establishes the authority relationship between individuals in an


organisation. It attempted to prescribe the ‘right’ organisational structure. This was a very narrow approach as it concentrated only on line and staff structures. The classical writers did not explore why certain forms of organisational structure are more effective than others.


Over emphasis on universality: classical theorists have claimed that these principles have universal application. This suggests that the same principles can be applied in: (i) different organisations, (ii) different management levels in the same organisation, and (iii) different functions of the same organisation. The empirical researches, however, suggest that none of the principles has such characteristics. Moreover, there are many of the principles, which are actually contradictory with other principles. For example, principle of specialization is quite in conflict with the principles of unity of command. Peter Drucker, Ernest Dale, etc. have also criticized universality concept.


Bureaucratic behaviour: Weber’s ‘ideal’ bureaucracy, a major constituent of classical theory, suggested strict adherence to rules and regulations. The scope for individual initiative and their contribution to the organisation goal is thus limited. The result is red-tapism and observation of rules and regulations becomes the main objective while the real objectives for which these rules and regulations are formed are forgotten.


According to the name bureaucracy theory was evolved by the German sociologist Max Weber (1864-1920). The theory of bureaucracy is based upon hierarchy of authority and web of rules and relations. It visualizes a machine model of organisation characterized by impersonal control over human beings.



A well-defined hierarchy of authority with clear lines of authority and control and

responsibility concentrated at the top of the hierarchy.


A high degree of specialization.


A division of work based on functional departmentation.


A system of rules covering the rights and duties of employees.


A definite system of procedures for dealing with the work situation and “rationally” coordinating activities.


A centralized system of written documents (“the files”) for collecting and summarizing the activities of the organisation.


Impersonality of relationships between employees.


Recruitment of managers on the basis of ability and technical knowledge.


The bureaucracy, or “bureaucratic model,” was one of the first theories of organisation. It was a theory; Weber hoped that would be used to understand how and why organisations were structured as they were, and the standard against which other organisations would be compared. But like most “ideal” forms of anything it was an extreme, an exaggeration. Having some specialization, adequate procedures and rules, and some centralization was and is clearly better than having no organisation at all. But Weber’s bureaucratic model quickly became synonymous with a rigid, unbending, inflexible structure manned by “robots”.

Criticism of bureaucracy:

Today when we hear the word “bureaucracy”, it immediately brings to mind visions of a ponderous, slowly moving organisation-one steeped in red tape, meaningless hurdles, and inefficiency. Various grounds of criticism of bureaucracy are as under:

1. The specialization of labour often inhibits effective communication among technical specialists and between higher and lower levels of the organisation.

2. The procedures and rules sometimes encourage organisational members to act mechanically rather than exercising initiative and using their inherent creativity. They often breed resistance to change.

3. Promotions in real life can result from “whom one knows” and “how one plays the organisation game” rather from technical ability. Competent people may be denied promotion.

4. Bureaucracy involves excessive paperwork, as every decision must be put in writing. All documents have to be maintained in their draft and original forms. This leads to great wastage of time, stationery and space.

5. Personnel in a bureaucracy tend to use their positions and resources to perpetuate self-interests or the interests of their sub-units. Every superior ties to increase the number of his subordinates as if this number is considered a symbol of power and prestige. It is hard to destroy bureaucracy even if it has outlived its utility.

6. Bureaucratic procedures involve inordinate delays and frustration in the performance of tasks. The procedures are nevertheless valued, perpetuated and multiplied for their own sake as also to pass the buck.

Despite its drawbacks, bureaucracy has become an integral feature of modern organisations. It cannot be wished away. It is, therefore necessary to overcome its negative aspects through proper application of rules and regulations, and reconciling the individual needs and organisational goals.

F.W. Taylor’s scientific management (1856-1916):


F.W. Taylor scientific management means managing the affairs of an organisation scientifically in contrast to the rule of thumb approach. According to him, scientific management is the art of knowing exactly what you want men to do and then that they do it in the best and cheapest way. He is regarded as the father of scientific management, the main objective of scientific management was to eliminate wastage and increase the all round efficiency in the working of the organisation. He was the first person who insisted on the introduction of scientific methods in management. He launched a new movement in 1955, which is known as ‘scientific management’. That is why; Taylor is regarded as the father of scientific management. He was born in 1856 in Philadelphia, U.S.A. he started his career as an apprentice in a small machine making shop in 1870 and rose to the position of chief engineer of Midvale Steel works in 1884 at the age of 28. Taylor conducted a series of experiments over a period of more than two decades. He experimented with machine tools, speed metals and the like. One of his experiments led to the discovery of high-speed steel, which made him very popular. Other experiments related to the way men handled materials, machines and tools which led him to the development of a coordinated system of shop management. In short, he experimented in different fields to eliminate wastage of all types, increase the efficiency of workers and provide for functional management. Taylor was a man of strong will and convictions, he wanted to apply scientific reasoning to management. After leaving Midvale Steel Works, he joined Bethlehem Steel Company where he introduced scientific management. He was highly opposed by the management and the workers and his services were terminated unceremoniously in 1901. Taylor presented his first paper entitled “Shop management” was published in 1903; it focused attention on his philosophy on management. His famous book “principles and methods of scientific management” was published in 1911 and his other contribution was “testimony before the special house committee” which was given in 1912. it may be pointed out that the last two works were combined in one book entitled ‘scientific management’ in 1947 by Harper and Brothers.

Taylor’s principles of management:

Taylor developed a number of principles of scientific management.

1. Science, not the rule of thumb: according to this principle scientific methods should be developed and used to perform each job and job should not be done as a rule of thumb, we should think before doing. For this purpose first normal time required to perform a job should be determined. Secondly fair days work of the workman be determined. Thirdly the best way of doing the work and a last maintaining standard working conditions and providing standard tools and equipments.


2. Close co-operation between workers and management (cooperation, not individualism): according to this principle objectives of organisation can only be achieved by close cooperation between all the workers and all the levels of management in an organisation and each superior and subordinate should cooperate each other to achieve the common objective of the organisation.

3. Scientific selection, training of the workers: this principle suggests that skills and experience of the workers must be properly matched with the jobs, which they have performed. So selection should be based on tests and interviews in specified field, training be given if required and their capabilities should be developed to the maximum.

4. Division of work and responsibility (separation of planning and operational works):

there should be clear-cut division of work and responsibility between work and management. E.g. planning is the work of management and so managers should be responsible for the proper planning where as execution of plan is the work of workers and so worker should be responsible for proper execution of planning.

5. Mental revolution (harmony): in an organisation the personnel’s (persons who are working on an organisation) should be made mentally prepared to perform the activities assigned to them. So management should create suitable working condition and resolve all problems scientifically and the workers should perform their job devotedly and use the resources efficiently.

6. Maximum prosperity for employers and employees: this principle requires that the aim of management should be to secure maximum prosperity for the employers along with the maximum welfare of employees.

Criticism of scientific management:

Taylor’s work was criticised on the following grounds:

1. The use of the word ‘scientific’ before ‘management’ was objected because what is actually meant be scientific management is nothing but a scientific approach to management.

2. It was argued that the principles of scientific management as advocated by Taylor were confined mostly to production management. He ignored certain other essential aspects of management like finance, marketing, accounting and personnel.

3. Taylor advocated the concept of functional foremanship to bring about specialization in the organisation. But this is not feasible in practice as it violates the principle of unity of command.

4. Trade unionists regarded the principles of scientific management as the means to exploit labour because the wages of the workers were not increased in direct proportion to productivity increases.

5. Scientific management is based on the assumption that people are motivated by material gains. Taylor and his associated concentrated on physical and economic needs


and over-looked the social and ego needs of people. Later experience has revealed that financial gain is not the only thing that matters. Workers also want job satisfaction, participation and recognition.

6. Scientific management is quite limited in scope. It focused attention completely on efficiency at the shop floor. As a consequence management became the study of shop management while the more general aspects were overlooked. Scientific management has thus been described as a theory of industrial engineering.

7. Increase in work speed: in scientific management the workers are supposed to work with more speed, which affects their health.

8. no chance to show skill: in scientific management workers are supposed to work according one schedule and no thought is given to personal within and skill.

9. Monotonous work: the workers are supposes co work only the specified portion of work continuously for many years the same work for many years make the work monotonous.

10. Lack of initiative: no chance is left to show their ability only a mechanized process of work is followed.

11. Lack of employment opportunities: more work by lesser worker thus reduces the chance of more employment.

12. Exploitation: workers are not given their due shares in the gains due to increased productivity of the enterprise. Comparatively, less efficient workers who are failed to achieve the standard are penalized wages do not rise in the same proportion in which productivity of labour increases.

13. Weakness of trade unionism: scientific management reduces the role of trade unions as standards of outputs, wages and working conditions are determined on scientific bases. There is little scope of bargaining on this ratter. The differential piece- wage divides the worker into efficient and inefficient. Scientific management may lead to accuracy, as workers have to carry out the instructions of their functional basis. It cuts the roots of trade union movement.


1. Speeding up of workers: workers feel that scientific management is nothing but a device to force workers to a greater speed, without much regard for their health and safety. It creates a lot of physical and mental strain on them.

2. Loss of workers skill and initiative: he workers had to work according to the instructions of the foreman. This leads to loss of initiative from the workers and they cannot suggest better method of work. They further allege and too much of standardization, a pre- requisite for scientific term, due to loss of workers initiative it results into lower productivity.



Monotony: under this function of planning is separated from that of doing. Every worker is expected to perform his small part of a job due to specialization. This makes the work monotonous and worker lends to lose interest in his job.

4. Unemployment: Scientific management reduces the number of processes and motions of workers, increases the hourly or daily output per worker, increases their efficiency by standardization and decision of labour, thereby, it creates unemployment by requiring lesser number of workers.

5. Exploitation of workers: the workers feel that gains increased profit is taken away by investors and only insignificant benefit is given to the workers by way of increase in wages and bonus.

6. Discrimination between workers: under this, efficient workers get more wages as compared to the inefficient ones due to the differental wage incentive scheme.

7. Undemocratic in nature: workers object that scientific management is undemocratic in nature as it gives absolute control over workers to the functional bosses. The workers have to follow the instruction of the bosses without thinking on the part of the workers.

8. Unsuitable for small-scale unit: some employers are of the opinion that scientific management is only suitable for large-scale units. Small-scale units cannot afford to introduce the scheme of scientific management.

Techniques or elements of scientific management:

1. Functional foremanship: Taylor believed that a single foreman might not be competent to supervise all functional matters. Functional foremanship involves supervision of a worker by several specialist foremen. So this concept is opposite of the principle of unity of command. E.g. matter relating to the speed of work of a worker should be supervised by speed supervisor and repair and quantity there of should be supervised by the repair supervisor.

2. Standardization of work: according to this technique standards should be fixed at every level. So that the jobs can be performed efficiently. E.g. standard tools and equipments should be provided to the workers. Standard working conditions are provided at work place. Standard, size, quality, weights and other measures should be fixed. Standard time required performing a unit of job and standard working hours of a fair day. Standard performance of machines in a standard time.

3. Simplification of work: the work should be simplified in a way so that an average worker can easily understand the steps to be performed to do a specified job. Simplification will certainly improve the efficiency resulting more production and reduction in cost and wastages.

4. Fatigue study: according to this technique management should determined the amount and frequency of rest intervals in completing a task. Because human being is bound to feel tired if works without rest interval for a long period and after getting tired he will not be able to perform the job with full capacity. But by rest he will regain stamina.



Method study: there may be various methods to perform a job with different cost requirements. So the organisation should try to find out the best way to perform the task. E.g. shoes may be manufactured manually or by machines, which ever costs less be adopted.

6. Deferential wage system: in this technique Taylor suggested that differential wage system for the wages to the employees on the basis of their performance should be introduced which will develop the idea/concept “do more to earn more”. The inefficient worker will also try to do to the maximum of his capacity and so the habit of doing the best and more in an efficient manner is develop.

7. Mental revolution: working of the subordinate and superior is based on whether they are mentally prepare for doing the job or not. A positive attitude of both towards each other each necessary there must be an environment in an organisation in which the workers feel that the management is exploiting them. On the other hand management also should have no concept that the workers have a tendency of miss use of tools and equipments, resulting wastages.

8. Time study: time study is a technique, which is used to measure/determine the time that may be taken by workmen of average skills/ability to perform a job/task. Purpose of time study is to determine standard time required to perform a specified job and so fair days work/workman. Time study is conducted with the help of stopwatch.

9. Motion study: motion study is a technique, which involves close observation of movements of body and limps required to perform a job. Its purpose is to determine the best way of doing a job by eliminating the wasteful motion, which will further reduce the fatigue resulting improvement in efficiency. Micro chronometer is the tool of study.

Administrative theory:

Henri Fayol was a French industrialist. He joined a French mining company in 1860 as an engineer and rise to the position of its managing director 1888. Through, his long practical experience Fayol developed a general theory of management. He published a book, “administration industrial general” in French in 1916, which was translated into English in 1929 under the title “general and industrial management”.

Fayol began by dividing all industrial activities into six groups:

1. Technical,

2. Commercial,

3. Financial,

4. Security,

5. Accounting, and

6. Managerial.

He gives a lot of principles of management which are explained below:



Division of labour: division of labour means dividing the work among members of organisations. It leads to specialization. It increases the efficiency of individual employee.

2. Parity of authority and responsibility: authority and responsibility are two sides of same coin. Authority refers to the right of a superior to give orders to subordinates regarding use resources of the organisation and to take decisions on specified matter. Responsibility on the other hand, means obligation with respect to the performance of functions and achieving goals. There must be parity between authority and responsibility.

3. Discipline: discipline in the context of management means obedience that is complying with rules and regulations of the organisation.

4. Unity of command: according to this principle, a subordinate should receive orders and be accountable to one and only one superior. No employees therefore, should be asked to receive orders and instructions from more than one superior.

5. Unity of direction: efforts of all the members of the organisation should be directed towards common goals. This principle ensures “unity of action, and coordination”.

6. Subordination of individual interest to general interest: the interest of the organisation must precedence over the interest of individuals. In other words, individuals should give up their personal interest in the interest of the enterprise.

7. Fair remuneration to employees: remuneration of employees should be fair and reasonable wages should be determined on the basis work assigned cost of living, and financial position of the business.

8. Centralisation and decentralization: when top management retains most of the decision making authority, is called centralisation, sharing authority downwards leads to decentralization Fayol says that an organisation should strive to achieve a balance between centralisation and decentralization.

9. Scalar chain: it includes the chain of superiors from the top to the lowest rank in management. Each manager is superior to the manager below him but he is also subordinate to his own superior. According to this principle each superior is to provide direction or instruction to immediate subordinate and subordinate to suggest or to complain to his immediate superior. Some times orders, directions, suggestion, complain got delate. While communicating because of the strict compliance of scalar chain. Therefore the avoid the delays Fayol suggested the concept of “gang plank”. According to which two employees at the same level can communicate each other directly. But each one of them must inform to his own superior.

10. Order: this principle is important to make the best use of personal and to avoid unnecessary delay in work. The principle is concerned with arrangement of things, which is called material orders, and placement of people called social order.

11. Equity: the principle of equity suggests that similar treatment is given to the people in similar positions workers performing similar jobs should be paid the same wage rate.

12. Stability of tenure of personnel: this principle stresses on the stability of terms of employee on the job and in the organisation. Employees should not be moved from their


positions frequently. Fir wages recognisation of work, incentives and dimensions provided to the employees help in reduction of absenteeism and frequent turnover, and provides efficiency teamwork and loyalty.

13. Initiative: the employees at all levels should be given some freedom to adopt techniques and methods to accomplish their tasks. This will create initiative and enforce efficiency. It increases zeal and belongingness.

14. Esprit de corps: these French words are the synonyms of English proverb “union is strength”. Group efforts are more effective than the total of individual’s efforts. Thus this principle, therefore emphasis the need for team works.


Difference between Taylor’s scientific management and Fayol’s principles:




Taylor’s scientific management

Fayol’s principle






Taylor begins from lower worker and moved upward.












of Taylor gave importance to the

Fayol gave importance to the top level.


operating level.








Its focus is to improve over all administration by adopting certain principles.

productivity by way of works simplification, time and motion study etc.



are scientific observation.






personal experiences.













comparatively rigid.


comparatively flexible.



To increase the productivity of workers by eliminating the

To develop general theory of administration.






1. Taylor called his philosophy scientific ‘management’ while Fayol described his approach as “general theory of administration”.

2. Taylor looked at management from the supervisory viewpoint and tried to improve efficiency at the operating level. He moved upwards while formulating his theory. On the other hand, Fayol analysed management from the angle of top management downward, with emphasis on coordination. He, therefore, had a broader vision and a wider perspective than Taylor.

3. Taylor focused his attention on factory management and his principles are directly applicable at the shop floor. But Fayol concentrated on the functions of managers and on the


general principles of management, which could be equally applied to all spheres of human activity.

4. The aims of Taylor were to improve productivity of labour and to eliminate all types of waste through standardization of work and tools. Fayol attempted to develop a universal theory of management. He also stressed upon the need for teaching the theory and practice of management.

5. Taylor developed techniques of management through scientific observation and measurement of workers operations. But Fayol tried to develop universal truths or principles from personal experiences.


This theory was given by GEORGE ELTON MAYO (1880-1949). He and his team eared out the famous Hawthorne Experiments; these experiments were conducted in the Hawthorne plant of western electric company in Chicago (USA), from 1927-1932. These experiments may be classified into four stages:

1. Illumination experiments: workers were divided into two groups. One group was placed in a room where lighting remains constant, other group was placed in a different room where the light was deem. Contrary to the hypothesis of scientific management, production increased in both the rooms. These experiments revealed that there was something more than illumination, which affected productivity.

2. Relay Assembly Test Room Experiment: in this a group of six female workers was asked to work in a separate room. During the course of experiment a series of changes were introduced such as piecework, rest pauses, shorter working hours and least rest hours. The researchers conclude that the productivity increased due to a change in the girl’s attitudes towards work and their groups. As there was freedom of work, they developed a sense of belonging and responsibility.

3. Mass interviewing programme: the researchers conducted thousands of interviews to determine the attitudes of employees towards their job, working conditions, supervision and the company. The main findings of the programme were as under: (a) Merely giving a person an opportunity to talk and air his grievances has a beneficial effect on his morale. (b) Worker’s complaints are not necessarily objective statements of facts. (c) Workers are influenced in their demands by experiences both inside and outside the factory.

4. Bank wiring observation room study: this study was conducting to analyse the functioning of a small group and its impact on the behavior of individual workers. Fourteen workers constituted the work group on piecework basis. The hypothesis was that each worker would produce mare. However, the result was different. The group was restricting the output of individual worker through various forms of social pressure. The findings of Bank wiring experiment included: (a) Each individual was restricting output. (b) The group had its own


“unofficial” standards of performance. (c) Individual output remained fairly constant over a period of time. (d) Departmental records were distorted due to differences between actual and reported output or between standard and reported working time.

Conclusions of Human Relation Approach:

1. The business organisation is a social system.

2. Employees in any organisation get satisfaction not by economic incentives but by the satisfaction of many other social and psychological wants, feelings, desires and so on.

3. In an organisation, it is ultimately cooperative attitude and not the mere command, which yields results.

4. Management must aim at developing social and leadership skills in addition to technical


5. Morale and productivity go hand in hand in an organisation.

6. At the workplace, the workers often do not act or react as individuals but as members of groups. A person who resists pressure to change his behaviour as an individual often changes it quite readily if the group of which he is a member changes its behaviour. The group plays an important role in determining the attitudes and performance of individual workers.

7. There is an emergence of informal leadership as against formal leadership and that sets and enforces group norms. He helps the workers t function as a social group and the formal group is rendered ineffective unless he conforms to the norms of the group, which he supposed to be incharge.

8. Money is only one of the motivators, but not the sole motivator of human behaviour. Man is diversely motivated and socio-psychological factors act as important motivators.

9. Man’s approach is not always rational. He may behave irrationally as far as rewards from the job are concerned.

Criticism of Human Relations Approach:

1. Mayo and his associates focused their attention on interpersonal relations, group dynamics, leadership skills, human motivation and so on. But it was pointed out by the critics of the human relations approach that human relations are not the ultimate answer to the problems of management. The search, therefore, continued for an adequate theory, and criticism of the Hawthorne began to arise.

2. The most serious criticism made of the Hawthorne studies related to the research methodology employed. For example, most of the human relations theory and practice are based on a relatively few observations of some small samples of human beings at work. In an admittedly radical criticism, Alex Carey maintains that the Hawthorne researchers minimized the effects of economic incentives for no apparent justifiable reason and elevated supervision and interpersonal relations to a point of primary importance.



The human relations approach lacks adequate focus on work. It puts all the emphasis on interpersonal relations and on the informal group. It tends to overemphasize the psychological aspects at the cost of the structural and technical aspects.

4. The human relations approach overemphasizes the group and group decision-making. But in practice, groups may create problems and collective decision-making may not be possible.

5. It is assumed that all organisational problems are amenable to solutions through human relations. This assumption does not hold good in practice.

Comparison of Scientific management and Human Relations Approach:


Scientific management

Human Relations Approach




Propounded by F.W. Taylor.

Propounded by Elton Mayo.



Suggested an engineering approach to management problems. It applied scientific method.
















engineering approach.



Focused on the study of the productivity problems of industry.

Focused on the study of individuals, his needs and behaviour.


The main concepts are scientific task setting, scientific selection and training of people and mental revolution.









employee morale.



Originated from the experiments of Taylor in dealing with the problems of factories.

Originated from the Hawthorne experiments conducted by the psychologists and sociologists.


Scientific management is a part of classical theory of organisation.

Human relations approach represents neo-classical theory of organisation.



The behavioral approach focuses on the psychological and sociological processes (attitude, motivations, group dynamics) that influence employee performance. While the classical approach focuses on the job of workers, the behavioral approach focuses on the workers in these jobs. Workers desisted the formal and impersonal approach of classical writers. Behavioural approach started in 1930. This gave rise to the Behavioural approach. Two branches contributed to the Behavioural approach.

1. Human relations movements: Hawthorne expressed it.

2. Development of organisational behaviour: pioneers of the human relation movement stressed inter-personal relations and neglected the group behaviour patterns. This led to the development of field of organisational behaviour. It respects a more. Interdisciplinary and

multi-dimensional approach to worker behaviour organisation behaviour involves the study of the attitudes, behaviour patterns and performance of individuals and group in an organisational setting. It says that:


Man is not a social individual, he is a complex individual.


The role and contribution of organisation behaviour in workers.


It discussed the psychological variables like motivations, leading etc.


Man is a self-actualizing being.

Classification of human needs by Maslow as under:

1. Physiological needs: these needs are related to the survival and maintenance of life. These include food, clothing, shelter etc.

2. Safety needs: these consist of safety against murder, fire, accident, security against unemployment etc.

3. Social needs: these needs include need for love, affection, belonging or association with family, friends and other social groups.

4. Ego or esteem needs: these are the needs derived from recognition status, achievement, power, prestige etc.

5. Self-fulfillment: it is the need to fulfill what a person considers to be his real mission of


Maslow is of the opinion that these needs have a hierarchy and are satisfied one by one. When first needs are satisfied then person moves to second---------so on.

Contributions of Behavioural science approach:

The behavioural science approach is concerned with the social and psychological aspects of human behaviour in organisation. Many of the conclusions of the Howthorne studies were reaffirmed by the subsequent research studies, but certain ideas were extended and others


highlighted by the behavourial scientists. Some of the important elements of the behavourial science approach are highlighted below.

1. Individuals differ in terms of their attitudes, perception and value systems. Therefore, they react differently to the same situation.

2. People working in an organisation have their needs and goals, which may differ from the organisation’s needs and goals. Management should achieve fusion between organisational goals and human needs.

3. Individual behaviour is closely linked with the behaviour of the group to which he belongs. A person may be inclined to resist pressures to change his behaviour as an individual. But he will readily do so if the group decides to change its behaviour. With work standards laid down by the group, individuals belonging to that group will resist change more strongly.

4. Informal leadership, rather than the formal authority of supervisor, is more important for setting and enforcing group standards of performance. As a leader (manger) may be more effective and acceptable to the subordinates if he adopts the democratic style of leadership. If the subordinates are encouraged to participate in establishing the goals, there will be positive effect on their attitude towards work. Changes in technology and methods of work, which are often resisted by employees, can be brought about more easily by involving the employees in planning and designing the jobs.

5. By nature most people enjoy work and are motivated by self-control and self- development. It is for the managers to identify and provide necessary conditions for the human potential to be used in the service of the organisation. The manager’s attitude towards human behaviour should be positive.

The behavioural scientists have shown how human beings bring to their task aspects of behaviour, which the effective manager should profitably understand. After all, it is individuals and groups with which a manager is concerned and while organisational roles are designed to accomplish group purposes, people must fill these roles. Thus, the behavioural sciences have provided managers with a ore systematic understanding of one of the most critical factors in the process of management—the human element. Insights evolving from that understanding have been used to design work situations that encourage increased productivity. It has enabled organisations to formulate programmes to more efficiently train workers and managers, and it has effects in numerous other areas of practical significance.




The quantitative or mathematical approach to management developed in the 1950’s. It offered systematic analysis and solutions to many complex problems faced by management in the real world. The quantitative school of management is also called operations research (OR) management science. Mathematical and statistical tools are now applied in the field of management, particularly in decision-making or complex problems. More commonly used OR techniques are linear programming, game theory, queing, simulation and probability. Together, with these quantitative decisions making tools are called ‘operations research’. The management science approach was evolved after the Second World War. It involves the application of sophisticated quantitative/mathematical techniques for solving managerial problem. The management science approach differs from the classical and behavioral approaches in several ways. Its distinguishing features are given below.

1. Management is concerned with problem solving and must use mathematical tools to solve


2. Mathematical modes can be developed by quantifying various variables of the problems.

3. Mathematical symbols can be used to describe managerial problems.

4. Mathematical tools, operations, research, simulation and model buildings are used to find out solution to managerial problems.

5. Rational decision-making: an organisation is considered a decision-making unit and the main job of a manager is to make decisions and solve problems. The quality of managerial decisions determines organisational efficiency. Therefore management information system and other technique should be used for making rational decisions.

6. Mathematical models: a model is a simplified representation of a real life situation. It utilizes mathematical symbols and relationships. It reduces a managerial decision to a mathematical form so that decision-making process can be simulated and evaluated before the actual decision is make with the help of a mathematical model, a manager can test different values of each variable until an acceptable solution is found.

7. Computer applications: the use of computers has been the driving force in the development of the management science approach the computer can handle in minutes extremely complex problems with an immense volume of data and also calculate numerous variations in the solution.

8. Evolution criteria: as the main focus of the management science approach is on scientific decision-making models are evaluated or effectiveness against the set criteria, like cost reduction return on investment, schedules and deadlines etc.



Systems approach to management developed after 1950. Many pioneers during as E.L Trist, AK Ria, F.E. Kast, and R.A Johnsm have made significant contributions to this approach. This systems approach looks upon the management as a ‘System’ of as an organized whole make up of sub-systems integrated into a unity or orderly totality. The attention should be given so overall effectiveness of the system rather than effectiveness of any sub-system if isolation. It took where management process school left off in attempting to unify management theory. It emphasizes the inter-relatedness and inter-dependence of all activities within an organisation. It is based on system analysis. It attempts to identify the nature of relationships of various parts of the system. A system is a set of inter-connected elements or component parts to achieve certain goals. An organisation is viewed by the modern authors as an op0en system. An organisation as a system has five basic parts:

1. Input,

2. Process,

3. Output,

4. Feedback and

5. Environment.

Systems approach to management provides a conceptual basis as well as guidelines for establishing a more efficient system for planning, organisation, directing and controlling. It forces the manager to look upon his business as an open adaptive system. Information is an important part of the system because an organisation must act and interact with its environment.


1. An organisation consists of many sub-systems.

2. All the sub-systems are mutually related to each other.

3. The sub-parts should be studied in their enter-relationships rather than in isolation from each other.

4. The organisation provides a boundary, which separates it from other systems. It determines which parts are internal and which parts are external.

5. The organisation is responsive to environmental effect. It is vulnerable is the changes in environment.

6. An organsiation is a system consisting of many interrelated and interdependent parts or sub-systems. These elements are arranged orderly according to some scheme such that the is more than the sum of the parts.

7. As a system an organisation draws inputs (energy. Information, materials, etc.). From its environment. It transforms these inputs and returns the output back into the environment in the form of goods and services.



Every system is a part of a super system.

9. Organisation is an open system and it interacts with its environment. It is also a dynamic system ass the equilibrium in it is always changing.

10. Management is expected to regulate and adjust the system to secure better performance.

11. Management is multidisciplinary as it draws and integrates knowledge from various disciplines.

Systems are of two types:

1. Closed system: if closed system has no interaction with the outside world.

2. Open system: continually interacts with its environment. All living systems are open system.


The contingency approach to management emerged from the real life experience of managers who found that no single approach worked consistently in every situation. The basic idea of this approach is that number management technique or theory is appropriate in all situations. The main determinants of a contingency are related to the external and internal environment of an organisation. The process, quantitative, behavioural, and systems approaches to management did not integrate the environment. The often assumed that their concepts and techniques have universal applicability. For example the process theorists often assumes that strategic planning applies to all situations; the quantitative experts generally feel that linear programming can be used under all conditions; the behavioural theorist usually advocates participative goal setting for all superior-subordinate pairs; and the system advocates tend to emphasize the need for computerized information flows in all situations. On the other hand practicing managers find out that a particular concept or technique from the various approached just does not work effectively in various situations. The theorists accuse practitioners of not applying the technique properly, and the practitioners accuse the theorists of being unrealistic. The contingency approach does incorporate the environment and attempts to bridge this existing theory-practice gap.

Contingency approach advocates that managerial actions and organisational design must be appropriate to the given situation and a particular action is valid only under certain conditions. There is no one best approach to management and it all depends on the situation. In other words, managerial action is contingent upon external environment. There is no one best approach for all situations. What a manager does depends upon a given situation and there is an active inter-relationship between the variables in a situation and the managerial action. Contingency theory attempts to analyse and understand these interrelationships with a view towards taking the specific managerial actions necessary to deal with the issue. This approach is


both analytical and situational, with the purpose of developing a practical answer to the question at hand. There are three major elements of the overall conceptual framework for contingency management; the environment, management concepts and techniques and the contingent relationship between them.

External environment: economic, social, technology and political factors. Internal environment: technological-constraints, task constraints, people constraints.

Features of contingency approach:

1. Management is externally situational: the conditions of the situation will determine which techniques and control system should be designed to fit the particular situation.

2. Management is entirely situational.

3. There is no best way of doing anything.

4. One needs to adapt himself to the circumstances.

5. It is a kind of “if” “then” approach.

6. It is a practically suited.

7. Management policies and procedures should respond to environment.

8. Managers should understand that there is no best way of managing. It dispels the universal validity of principles.

Superiority of contingency approach:

Clear-cut emergence of contingency approach was noticed after the popularization of systems approach. The contingency theorists accept open adaptive nature of the organisation and the interdependency between various sub-systems of the organisation. But they have pointed out that the systems approach does not adequately spell out the precise relationship between organisation and its environment. It is too abstract and difficult to apply in practice. They have tried to modify and operationalise the system framework. The systems approach takes a broader view of organisational variables and employs a comprehensive model of human beings. It takes into account the full range of human needs and motives. On the other hand, contingency approach is concerned mainly with the structural adaptation of organisation to the task environment. But both these viewpoints are not mutually exclusive. They should be treated as complementary to each other. The manager should use systems and other approaches under the framework of contingency approach.



Systems approach

Contingency approach








Identifies the nature of interdencies and the impact of environment on organisational design and managerial style.

interdependencies and interactions systems and sub-systems.


Treats all organisations alike. Size of the organisation, and its socio- cultural setting are not considered.

Each organisation is to be studied as a unique entity.



way of thinking about

A down-to-earth, pragmatic and action focused approach. Provides operational tools and techniques for analyzing and solving problems.

organisations at an abstract, level. Provides a global theoretical model for understanding organisation.


Appears to be neutral and non- committal on the universality of principles of management.

Rejects the universality of principles, no one best way of managing.


Main focus on internal environment of the system.

on environment of the system.

Main focus




Suggests deterministic solutions to management problems.





management problems.


Input-output process, open system, system boundary, synergy, homeostasis, dynamic equilibrium,

Suggests a comparative analysis of organisation to establish patterns of similarities and differences. Fit between approach and situation is a must.

entropy and equi-potentiality are its




Koontz and O’Donnell suggest the operational approach to management and in doing so, they have attempted to draw together the pertinent knowledge of management by relating it to the managerial job, i.e., what managers do. This approach recognizes that there is a central core of knowledge about managing which exists in managements such as line and staff, patterns of departmentation, span of management, managerial appraisal, and various managerial control techniques. Many other pertinent elements of knowledge are derived from other fields such as application of systems theory, motivation and leadership, decision-making, group behaviour and cooperative systems, communication, and mathematical analysis and practices. Operational management has a central core of knowledge not found elsewhere. It also draws from other fields of knowledge and adopts within it those parts of these fields, which are especially useful for managers. The operational approach regards management as a universally applicable body of knowledge that can be brought to bears at all levels of managing and in all types of enterprises. At the same time, the approach recognizes that the actual problems


managers face and the environment in which they operate may vary between enterprises and levels, and it also recognizes that application of science by a perceptive practioner must take this into account in designing practical problem-solutions. The operational approach is quite similar to the modified management process approach advocated by G.R.Terry. It may also be called eclectic process school of management, featuring the basic framework of the process approach modified by certain theories from other appropriate schools of management thought. Eclectic means consisting of “what is selected” and this term has been interpreted to indicate taking the best from what is available in the management thought and working into it a single molded around the process framework as the central core.




Planning is the process of deciding in advance what is to be done, who is to do it, how it is to be done and when it is to be done. It is the process of determining a course of action, so as to achieve the desired results. It helps to bridge the gap from where we are, to where we want to go. It makes it possible for things to occur which would not otherwise happen. Planning is a higher order mental process requiring the use of intellectual faculties, imagination, and foresight and sound judgment. Accounting to Koontz, O’Donnell and weihrich, “planning is an intellectually demanding process; it requires the conscious determination of courses of action and the basing of decisions on purpose, knowledge and considered estimates. Planning is a process, which involves anticipation of future course of events and deciding the best course of action. It is a process of thinking before doing. “To plan is to produce a scheme for future action; to bring about specified results, at specified cost, in a specified period of time. It is deliberate attempt to influence, exploit, bring about, and controls the nature, direction, extent, speed and effects of change. It may even attempt deliberately to create change, remembering alwas that change (like decision) in any one sector will in the same way affect other sectors”. Planning is a deliberate and conscious effort done to formulate the design and orderly sequence actions through which it is expected to reach the objectives. Planning is a systematic attempt to decide a particular course of action for the future; it leads to determination of objectives of the group activity and the steps necessary to achieve them. Thus, it can be concluded that “planning is the selecting and relating of facts and the making and using of assumptions regarding the future in the visualization and formulation of proposed activities believed necessary to achieve desired results.

OR In other words we can say that Planning is a process of thinking before doing. It involves determinations of goals and the activities required to be performed to achieve the goals. It consists:



What is to be done?


How it is to be done?


Where it is to be done?


When it is to be done?


By whom it is to be done?

So planning is a process of shorting out the path for attaining the determined objective of the business. Overall planning is deciding that in present, what is to do in future.

Features/Nature/characteristics of planning:


Goal oriented: the main purpose of plan is always to determine the goal to be achieved and the activities to be performed to achieve these goals. So planning relates to creative thinking for the solution of various problems.


Primacy (basic function) of planning: it means planning is the basic function of all other managerial functions. It provides a base for other managerial functions like organizing, staffing, directing and controlling. We can say that structure of all other functions depends on planning.


Forward looking: planning is never done for past but is done for the future to achieve certain objective. Therefore, it is said that planning is thinking before doing. Planning is based on estimated future trends of social, economic and technological changes because it has to tackle the future requirements.


Pervasiveness: planning is required in all sectors, i.e. business, industry, profession etc. whether it is of large scale or small scale and in all the department of organisation like purchase, production, marketing, finance department etc. however nature of planning differs from one department to another.


Involving choice (alternative): planning can be when there are two or more alternatives and the planner can make a choice for the best, in other words, in the absence of choice there will be no planning because then there is a single way of doing something i.e. to be adopted.


Continuous process: planning is an ongoing process, planning starts before performing the job and them goes an with the activities to be performed to do that job and them just after the competition of the job planning regarding starting the new job. Moreover changes take place in business environment and regular plans are made to face such changes.


Flexible: there must be flexibility in planning, because plans are always based on future, which is uncertain. So flexibility will give a chance to make changes as per future requirements.


Efficiency of operations: planning is made with the objective of raising efficiency of operations but it is not necessary that efficiency will raised, if may or may not. So the management should make continuous efforts to minimize the cost of wastage and improving the efficiency by use of latest change in technology.


Planning is a primary function: planning is the basis or foundation of the management process. All other functions of management are designed its attain the goals set under planning.


10. Planning is the fundamental premise of all management functions: as managerial operations in organizing, staffing, leading, and controlling are designed to support the accomplishment of enterprise objectives, planning logically precedes the execution of all other managerial functions.

11. Planning is closely linked to objectives: each plan specifies the objectives to be attained in the future and the steps necessary to reach them. As Billy E. Goetz said, “plans forecast which actions will tend towards the ultimate objective…Managerial planning seeks to achieve a consistent, coordinated structure of operations focused on desired ends.”

12. The effectiveness of planning is measured in terms of what it contributes to the objectives: a plan is efficient if it, when put into action, brings about the achievement of the objectives with the minimum of unsought consequences and with positive gains greater than the costs.

13. Planning is a pervasive function of management: planning is a function performed by all managers, although the character and breadth of planning will vary with their authority and with the nature of policies and plans outlined by their superiors.

14. Planning is a highly skilful intellectual activity: it involves active use of higher mental process like thinking, innovation or creativity, etc.

15. Planning involves selection among the alternatives: it is a highly selective process in which all the alternatives need to be listed and best alternatives are selected or decided.

Importance of planning:

1. Makes the objectives clear and specific: planning clearly specifies the objectives and the policies or activities to be performed to achieve these objective in other words what is to be done and how it is to be done are clarified in planning.

2. Off setting the uncertainty and change: planning is necessary to look ahead towards future and to take decisions regard facing the expected changes/requirement of the future. E.g. before coming of summer session producers started production for the products to be used in summer.

3. Plans facilitate decision-making: to achieve the objective predetermined under planning, business has to take various decisions by considering the available resources. If job may be completed by using various alternatives (e.g. manually or by machines) and the best alternative is decided by the management, which is more helpful in achieving the objective.

4. Provides basis of control: under controlling actual performance is compared with the planed performance (target/objective). So planning is the base of controlling process.


5. Leads to economy and efficiency: planning clarifies the work and its method of doing. Resultantly it reduces confusion and wastage of resources in the form of thinking at the time of doing. So efficiency of the worker will risen which will further result economy in production.

6. Facilitates integration: under planning proper directions as per plane are provided to the subordinates. Resultantly they all make effort towards the achievement of preplanned objective. Such co-ordination of sub-ordinates and their departments will certainly help the organisation in achieving its objective.

7. Encourages innovation and creativity: planning is the process of thinking in advance and so plans are made to achieve a target at future date by using latest methods and technology to perform the industrial/business activities and so plans lead to innovation.

8. Facilitates control: planning facilitates the managers in performing their function of control. Planning and control are inseparable in the sense that unplanned action cannot be controlled because control involves keeping activities on the predetermined course by rectifying deviations from plans. Planning facilitates control by furnishing standards of control. It lays down objectives and standards of performance, which are essential for the performance of control function.

9. Improves motivation: the effective planning system ensures participation of all managers, which improves their motivation. It improves the motivation of workers also because they know clearly what is expected of them. Moreover, planning also serves as a good training device for future managers.

10. Improves competitive strength: effective planning gives a competitive edge to the enterprise over other enterprises that do not have planning or have ineffective planning. This is because planning may involve expansion of capacity, changes in work methods, changes in quality, anticipation of tastes and fashion of people and technological changes, etc.

11. Encourages innovation and creativity: planning helps innovative and creative thinking among the managers because many new ideas come to the mind of a manager when he is planning. It creates a forward-looking attitude among the managers.

12. Achieves better coordination: planning secures unity of direction towards the organisational objectives. All the activities are directed towards the common goals. There is an integrated effort throughout the enterprise. It will also help in avoiding duplication of efforts. Thus, there will be better coordination in the organisation.


Planning is an important function of management. However, he planning may fail if the following limitations.


1. Lack of accuracy: planning relates to future and future is always uncertain and so prediction about future is so much difficult. Moreover planning are based on data/information relating to past and as such planning based on any wrong information may not be useful to the organisation.

2. Costs: formulation of plans involves too much cost which are in the form of time spend, money spent etc. but some times there is little benefit from in plan and than it becomes a burden for the institution. If the plan is not useful than the amount or time spent on its formulation is a waste.

3. Advance effect on decisions: some plans are rigid and a manager faces difficulty while making any changes where as there may be continuous change in environment where as the quick decision is required as per the changed environment.

4. Delay in actions: planning requires some time for thinking, analyzing the situation and designing the final plan and so in case emergency decision is required it will take time and business will lose its opportunity. Moreover delay in decision will further delay the action.

5. Psychological barrier: people in organisation have to work strictly according to plan where as they may be able to give better performance in a way decided by themselves. Secondly they do not think beside the plan and performs their activities like a machine without using their psychology.

6. Limited flexibility: there may be some changes in planning only up to some extent because measure changes in plan will further attract the changes in supporting plans also and as such the whole system is disturbed moreover changes in plans time and again will prove a wastage of time and money spent on previous plan (pre-changed plan).

7. Human elements: planning are the results of thinking of human being. Information on the basis of which plan is formulated may not be free form bias or there may be some other errors which will further Reebok (problem) the better plan.

8. Limited practical value: planning is too much theoretical and have a less practical use planning is more suitable when environment is suitable but due to unsuitability of environment business has to take various quick steps/decision time and again and as such the importance of other resources which are used according to changing environment, is more than that of planning.

9. Improper plan: planning/target set at the lower side than the capability of or resources and target on over side than the capacity of the resources both are termed as improper planning because lower target will be easily achieved and we will feel false sense of security. On the other hand over planned target beyond resources cannot be achieved even all effort both are the situation of improper plan.

10. Planning is a time-consuming and costly process: this may delay action if certain cases. But it is also true that, if sufficient time is not given to the planning process, the plans so produced may prove to be unrealistic. Similarly, planning involves costs of gathering and analyzing information and evaluation of various alternatives. If the management is not willing to spend on planning, the result may not be good.



Planning is a forward-looking process: the planner must possess the required initiative. He should be an active planner and should take adequate follow up measures to see that plans are understood and implemented properly.

12. Resistance to change is another important factor, which puts limits on planning: It is commonly experienced phenomenon in many organisations. Sometimes, planners themselves do like change and on other occasion, they do not think it desirable to bring change, as it will create resistance on the part of the workers. This attitude makes the planning process ineffective.

13. Internal inflexibility in the organisation may compel the planners to make rigid plans: this may deter the managers from taking initiative and doing innovative thinking. So, the planners must have sufficient discretion and flexibility in the enterprise. They should not always be required to follow the procedures rigidly.

14. Psychological factors also limit the scope of planning: some people consider present as more important than future because present is less uncertain. Such persons are psychologically opposed to planning. But it should not be forgotten that dynamic managers always look ahead. Long-term well being of the enterprise cannot be achieved unless proper planning is done for future.

15. The effectiveness of planning is sometimes limited: because of external factors, which are beyond the control of the planners. External stringencies are very difficult to predict. Sudden breakout of war, government controls, natural havocs and may other factors are beyond the control of management. They make the execution of plans very difficult.


The term plan refers to a course of action determined in advance by the management. It has always a time frame in other words it is a package of decisions to make efforts to achieve some results in a specified term of period.

1. Goals (Target): goal is a desired state of affairs, which an organisation wants to achieve. Overall goals are the collective ends for which the whole organisation makes efforts to achieve. Goals may be of short term or long term in nature. E.g. goal of an automobile company may be to provide low cost and higher quality of automobiles to the public.

2. Objectives: objective is the ends towards which activity is aimed. In other words it is desired and end result of an activity. There must be a time frame for the achievement of predetermines objectives. Objectives may differ from one organisation to another. E.g. business organisation will have an objective of earning more profits where as co-operative society has an objective of well fare of its members more-over objectives may change from time to time. An organisation may have single objective or multiple objectives. E.g. single objective— maximization of profits, multiple objective increase in profits with other better facilities to the customers and employees.


As per as possible objectives are expressed in miserable quantity and so these provide a path for planning. Because planning is made for the achievement of any objective. Overall these are the desired results in the form of quantity to be achieved by performing any activity there should be a specific time frame to achieve these objectives these should be challenging but achievable.

3. Policies: policies are general statements, which guide the thinking in decision making. These are concerned with administrative action and serve a principle for conduct. These are predetermining decisions these helps the managers in achieving the objectives. E.g. policy of hiring a trained engineer or to promote from within the staff. By way of training, policy of setting competitive prices, policy of quick after sale service with in three months from the date of sale. In other words these guidelines (policies) helps the management for taking decision in proper direction to achieve the objective. Policy increase in taking decisions but within limits and so the decision depends on the authority given in the policy.

4. Procedures: the procedure is defined as pre-determined se2quence of steps to initiate action and complete the task. E.g. export and import procedure, admission procedure in a school i.e. application in schedule time, screening of facts/data’s, rank of merit and them decision regarding admission; Procedure are the clear cut steps to be taken to perform a job in an optimum manner so that the objectives can be achieved policies and procedures are also interrelated like there will be a policy of summer vacations in the schools. But fixing of schedule of vacations is the procedure. To ensure that orders are handled in a specific way there must be a procedure. So procedure helps the management to rich its objective.

5. Rules: rules are specific directions to perform an action or not to perform an action these are the directives to the people in organisation, finding them to do or not to do, to behave or not to behave in a particular way. Rules are always in the form of order’s or directions and not in the form of request. Rules are a set of instructions to be followed in a particular way. These are generally in writing and are impersonal in nature. In business organisations rules are framed regarding recruitment, promotion, managerial decisions ae taken within the boundaries of rules. There is no discretion in there application. When ever the decisions are within rules the person who has taken decision is safe and secured as he is working as per rules, which are acceptable by the people.

6. Methods: a method is a prescribed process in which a particular task is performed. Its specifies any best and efficient way of performing the task: - e.g. methods of valuation of stock- cost or market price, which is less, is consider in final accounts. Moreover there are several methods like method of calculating depreciation. Which method will be the basis of nature of business and once selected the method becomes a prescribed manner of performing a job.

7. Programme: programme refers to the outline of plans of work to be carried out in proper sequence. Do that the objectives can be achieved. E.g. management want to expand the size of business by 70% so to implement this programme management must lay down certain policies, procedures, methods, rules etc. so that with the co-ordination of these we may become successful to implement this programme. A primary programme may call for any supporting


programme in above. E.g. the programme i.e. programme of making arrangement of finance required for expansion, programme of arrangement of trained workers required after expansion and so for the successful implementation behave to make a combination of goals, policies, procedures, rules, tasks, steps to be taken to perform these task, employees and other resources, this over all process combination is known as programme.

8. Budget: budget is a statement of exceptive result expressed in numerical term. Budget is a single use plan and can be expressed in respect of finance, material time, etc. so budget is a finance and/or quantitative statement prepare and approved prior to a specified period. Budget always pertains to future it is prepared in advance and expressed in qualitative financial terms.

*Difference between plans and policies*


Basis of difference









The term plan is a wider concept that includes policy and several other actions.






concept than plans.







helped by the


Policies are determined after plans it is only a part of plan.








Implementation of plan requires policy guidelines.


These are the guidelines





implementation of



*Difference between policy and objectives*



Basis of difference








Type of plans


are standing







plans/guidelines for the achievement objective.












Time limit

Policies go on until these are changed and so no


Objectives are the ends to achieved by performing



time limit.









Basis of existence

An organisation






function without policies.








Policies are the guidelines to achieve the objective.

Objectives refer to the target to be achieved.



Policies have lower place than objectives.

Objectives have higher place than policies.



Policies are formulated at top level, middle level and lower level management.

The owner or top-level










*Difference between policy and procedure*



Basis of difference









Policies are the guidelines to decision making.

Procedures are


guidelines for taking steps to do a job in proper sequence.


Scope for change




Procedures are relatively rigid.








Procedures are generally lay down by relatively lower managerial level.




managerial level.




Policies serve as bridge between organisational purpose and performance.




a bridge

between activity and its outcomes.



Policy is expressed in the form of general statement.

Procedure is expressed in



























It has narrow scope.


It has wider scope.


*Difference between policies and rules*



Basis of difference






It is a general statement in nature.

are specific statement.






Policies are guidelines to decision making.

These are guidelines to do and not to do.












should have no deviation.








There is no discretion.

discretion of management

for implementation.


*Difference between rules and methods*



Basis of difference






Rules are meant for strict


compliance and have

are efficient performance.




little concern with efficiency.






formulated on

Methods are formulated on the basis of research and analysis.










Deviation from rules will attract penalty.

Method’s deviations does not attract penalty.



Backed by

Rules are generally backed by managerial.








Rules relates to behaviour of individuals and groups.




physical and other task.



Rules are associated directly with control.

Methods are not directly associated with control.

*Levels of planning*

In management theory, it is usual to consider that there are three basic levels of planning, though in practice there may be more than three levels of management and to an extent, there


will be some overlapping of planning operations. The theree levels of planning are discussed below:

1. Top level planning: also known as overall or strategic planning, top level planning is done by the top management, i.e., board of directors or governing body. It encompasses the long-range objectives and policies or organisation and is concerned with corporate results rather than sectional objectives. Top level planning is entirely long-range and inextricably linked with long-term objectives. It might be called the ‘what’ of planning.

2. Second level planning: also known as tactical planning, it is done by middle level managers or departmental heads. It is concerned with ‘how’ of planning. It deals with development of resources to the best advantage. It is concerned mainly, not exclusively, with long-range planning, but its nature is such that the time spans are usually shorter than those of strategic planning. This is because its attentions are usually devoted to the step-by-step attainment of the organisation’s main objective. It is, in fact, oriented to functions and departments rather than to the organisation as a whole.

3. Third level planning: also known as operational or activity planning, it is the concern of departmental managers and supervisors. It is confined to putting into effect the tactical or departmental plans. It is usually for a short-term and may be revised quite often to be in tune with the tactical planning.

*Steps/Stages of planning*

Planning is a process consisting many steps, which may differ from one plan to another. But following are the common steps: -

1. Setting organisational objectives: planning is total based on the objectives, which an organisation wants to achieve by way of planning. In other words first of all objectives will be fixed and then we will make plan regarding how to gets success in achievement of such predetermine objective. While making plan and setting objectives management should make analysis of internal resources available with the business and arrangement of external resources, external environments and corrective measures to face with the environment.

2. List of alternatives to achieve the objective: there may be so many ways available with the business to achieve the objective. So business should prepare a list of such ways by considering the merits and demerits of each for which ever is better should be adopted. E.g. target of increasing profitability may be achieved by increasing sale, decreasing cost, introducing new product of better technology, rise in process etc. which of these alternatives is beneficial for business be adopted. Considering the merits and demerits of each alternative is also termed as development of premises of each alternative.



Choose the best alternative: after considering the list of alternatives and merits of each management has to decide which of these alternatives will be the best in consideration with the human and nonhuman resources available with the business.

4. Formulation of supporting plans: supporting plans are those plans, which provides support to the main plan. E.g. if the business wants to produce according to objective there may be many supporting plans like planning of purchase of rawmateiral, planning of recruitment and training of the man power etc.

5. Put the plans into action: after that plan formulated is ready to be put into action and so function should be started according to the plan all supporting plans should effort to help the main plan in reaching the objective and so in this all process is done in any effective manner we will get desired results of the plan.

6. Follow up: once the plan is put into action it monitoring/supervision is equally important. In the main time management should see whether we are going towards achievement of objective or not. There may be some changes required before reaching the objective. E.g. a company is to sell 1200 refrigerators per year than directors should see that at least 100 units per month on average basis should be sold to achieve the target.

*Features of good plan/policy/procedure*

1. These should be purposeful and functional.

2. These should be simple and clear.

3. These should be flexible.

4. These should really serve as guidelines to reach the objective.

5. These should be economic (maximum use at minimum cost).

6. These should be in written form to avoid confusion.

7. These should be a periodic review and corrective measures to be taken.

8. These should be understandable.


Decision-making is a process of selection from a set of alternative courses of action,

which is thought to fulfill the objectives of the decision problem more satisfactorily than others.

It is a course of action, which is consciously chosen for achieving a desired result. A decision is

a process that takes place prior to the actual performance of a course of action that has been

chosen. In terms of managerial decision-making, it is an act of choice, wherein a manager selects a particular course of action from the available alternatives in a given situation. Managerial decision making process involves establishing of goals, defining tasks, searching for alternatives and developing plans in order to find the best answer fo the decision problem. The essential elements in a decision making process include the following:

1. The decision maker,



The decision problem,

3. The environment in which the decision is to be made,

4. The objectives of the decision maker,

5. The alternative courses of action,

6. The outcomes expected from various alternatives, and

7. The final choice of the alternative.

Characteristics of decision-making:

1. It is a process of choosing a course of action from among the alternative courses of action.

2. It is a human process involving to a great extent the application of intellectual abilities.

3. It is the end process preceded by deliberation and reasoning.

4. It is always related to the environment. A manager may take one decision in a particular set of circumstances and another in a different set of circumstances.

5. It involves a time dimension and a time lag.

6. It always has a purpose. Keeping this in view, there may just be a decision not to decide.