MODULE-1 (Management Function Behaviour

Management Functions & Behaviour 5
Unit- I: Nature of Management, Evolution of Notes

Management Thought
Structure
1.1 Concept, Nature, Scope and Functions of Management
1.2 Levels of Management
1.3 Evolution and Foundations of Management Theories – Classical and Neo-
Classical Theories,
1.4 Systems Approach to organisation, Modern Organisation Theory.
1.5 Questions & Exercise
Objectives
After completion of this unit you will be able to know
 The basic understanding of the management its nature, the areas where it can
be applied and what are the functions of it.
 The different levels of management and its utility. Skill required and the role of
a manager.
 The evolution of different management theories.
 New trend in management thought, the system approach and the modern
organisation theory.
Introduction
The management can be defined as a continuous process of achieving
predetermined targets by utilizing the scarce available resources in effective and
efficient manner. So management is an all pervasive activity which requires a well
defined target and efficient deployment of the resources available to the manager, the
general steps followed in management are Planning, Organising, Staffing, Directing
and Controlling. Management is said to be an art as the managerial process has
subjective creativity and at the same time as a science as it is based on the evaluation
of objective theories as well. But whatever is the definition but to be a successful
manager some skills termed as managerial skills are required, like conceptual,
technical and people skill etc. The management can be classified as top management,
middle management and lower management depending upon the role and authority
within the organisation.
With passage of time different theories had emerged in the field of management
by various researchers and practitioners based on their research, experience and
observations. These theories can be classified as classical, administrative, neo
classical and system theories of management. Based on the integration of these
theories the modern thoughts of management has emerged, which is currently
prevalent for the understanding of the management function and its role in the
organisation.
The basic objective of this unit is to make you understand the concepts, objective
and functions of management so that once you become a manager you will be to
understand the organisational objective, their processes and behavior so that you
can suitably adopt the organisation and bring efficient and effective changes with your
endeavors within the organisation and bring excellence in your organisation.
Amity Directorate of Distance and Online Education
100 Management Functions & Behaviour
1.1 Concept, Nature, Scope and Functions of Management

Notes Definitions of Managment
Definition of the management is given by so many authors depending on their own
perception, analysis and ideology that giving one single definition will be an injustice so
we are giving here some of the definition by different experts in management and will
finally try to understand and define management with our own perspective.
“Management is that process by which managers create, direct, maintain, and

operate purposive organisations through systematic, coordinated, cooperative human
effort.”
—Da/ton E. McFarl
“Management is a social and technical process which utilises resources, influences

human action, and facilitates changes in order to accomplish organisation goals”.
—Theo Haimann and William G. Scott
“Management is the process of planning, organising, actuating, and controlling an

organisation’s operations in order to achieve coordination of the human and material
resources essential in the effective and efficient attainment of objectives.”
—Robert L Trewatha and M. Gene Newport
‘To manage is to forecast and plan, to organize, to command, to coordinate and to

control.”
-Henri Fayol
Management is distinct process consisting of Planning, Organising actuating, and

controlling performed to determine and accomplish objectives by the use of human
beings and other resources.
-George R Terry.
So based on our own analysis of so many definitions and based on our own
observations and experience we can define “management as a continuous process of
achieving predetermined targets by utilizing the scare available resources efficiently
and effectively. The resources include the finance, time, human effort, technology,
infrastructure, system, material, etc. the efficiency and effectiveness lies with the
strategy formulated and implemented by a person or organisation for achievement of
the targets”
So we can say that the management is
 A continuous activity and not a one shot activity;
 Management has no meaning until we do not have specific targets to be achieved;
 We can use only resources available to us and they are limited;
 The results of management are better if we maintain efficiency and effectiveness;
 Even if resources available are equitable or even less as compared to others a

better management can bring better results in any situation.
 Management can be applied in all the areas of organisation like finance

management, technology management, quality management, sales and marketing
management etc and the principles are also applicable to our day to day life.

We can also consider management as a process to integrate human efforts with
non-human resources like materials, machines, methods, money (capital), etc., by Notes
their concerted effects. Management is also regarded as a social process because
the activities involved in the achievement of organisational goals are carried out when
organisational participants interact with one another. The resources which are handled
by the management are to be used in such a manner that the needs of the society are
satisfied efficiently and effectively. Every manager is required to use various skills of
human relations to achieve good relations with the various groups of stakeholders like
shareholders, workers, consumers, government, suppliers, etc.
Is Management a Group/Team
We can say that Management is a group/ team because in management there is
a group of people who carry out various activities of management. So we can refer
management as the group of people in an enterprise who are carrying out management
functions. All individuals occupying managerial positions are collectively known as
management. But if we analyze we see that every individual in an organisation is
performing his part of the activity in the management functions so is it not right to say
that every person is a manager.
A manager is a person who performs the managerial functions of planning,

organising, staffing, directing and controlling. And as a manager performs the
managerial functions, he is a member of the management of the organisation. But in a
conventional sense management include the top management of the company including
the Chairman, Managing Director or Chief Executive and Board of Directors.
So we can interpret three different understanding from the term management
 Technically, the term ‘management’ is used to indicate all the people who carry
out managerial activities. Under this interpretation, all the managers from the chief
executive to the first line supervisors are collectively addressed as management.
 Practically, the term ‘management’ is used to indicate only the top management of
the organisation (e.g., Board of Directors and Chief Executive of the company) It
is the top management that has the authority for making important decisions like
introduction of a new product, issue of shares or debentures, joint venture with a
multinational corporation, etc.
 Finally every individual who is contributing towards the achievement of the goals by
utilizing the available resources is a manager.
Also according to Harold Koontz management is the art of getting things done
through and with people in formally organized groups, management gets results from
the people by satisfying their needs and expectations, and providing them opportunity
for their personal growth. Therefore we can say that yes management is group of
people
Is Management an Art of Getting Things Done Through Other People?
According to Mary Parker Follett, “Management is the art of getting things done
through others’ According to this definition managers achieve organisational objectives
by directing others to perform whatever tasks may be necessary and not performing the
tasks themselves. This traditional view of management emphasizes that management
directs the workers for getting results from them and controls their performance. So
employees are treated merely as a factor of production like materials, machines and
capital.

Now let’s analyze this in light of following points:

Notes
 If management is an art of getting things done from others then it means managers
themselves don’t perform much of the activities.
 Secondly employees are only treated as mere means to attain organisational

goals. So they don’t have much of significant role.
 The management tries to manipulate the behaviour of the workers to get things
done.
 The emphasis is only achieving organisational targets, needs and aspirations of the
workers are not considered.
 It also means there is division between who actually do the work and who get
things done, but can we really have such distinction.
 Finally the line separating owner and management of the company is also widening,
which means managers are also employees who are doing things for the others (
the stakeholders) by getting things done by others ( employees)
So when an organisation employs people for the efficient and effective utilization of
resources to achieve its purpose the people so employed also have their needs which
they seek to fulfill through their work-place. Hence It is essential to satisfy their needs
to motivate them to contribute their efforts for the achievement of organisational goals.
Even authors like Maslow, Herzberg and Vroom have clearly stated that the behavior of
the people working in an organisation is largely dependent upon the fulfillment of their
needs.
The workers are human resources and so they should be treated as human beings
who could be motivated by satisfying their economic and psychological needs. They
are not simply a factor of production or merely a cog in the wheel as was considered
traditionally. To-day’s workers are knowledgeable and have higher aspirations which
they want to be fulfilled at the workplace. Therefore, organisation must provide
opportunities for the growth and development of workers to motivate them for greater
productivity. We can’t say in clear sense that management is an art of getting things
done by others.
Is Management a Discipline?
Management has a systematized body of knowledge and a separate field of study.
Management comprises of an organized body of knowledge which can be learnt
through formal instructions and training. Management can be understood by certain
principles, practices, techniques and skills which help in achieving objectives. This
discipline is taught widely in business schools and through the world. The knowledge
acquired through research in the management can be accumulated to the existing
knowledge and can be used by future managers. So we can say that management is a
Discipline in itself.
Nature, Scope and Charactaritics of Management

 Management is goal-oriented. Management is goal oriented activity which
means the efforts and activities should be directed towards the attainment of
pre-determined objectives. These objectives are the ends towards which all the
management activities are systematically directed. Without knowing and directing
our efforts towards these goals there can’t be any management.

 Management is social process:- Management is a social process as it deals with
people, it deals with how to integrate the human effort in achieving targets efficiently Notes
through coordination and cooperation. Organisations have to use the resources for
the benefit of the society at large.
 Management is a distinct and universal process. Management is a distinct

process which means it can be defined in terms of certain steps or stages. We can
define the process of management which consists of the functions of planning,
organising, staffing, directing and controlling. The process of management involves
decision-making and putting them into action. These functions are performed
by the managers at all levels of organisation and in all types of institutions. The
management is universal process as its basic principles are universal in character
which means can be applied at any level any area and in any situation, can be
applied in different organisations and also in our day to day personal or professional
life.
 Management is a continuous process. The management is a continuous process

as long as we keep having targets to be achieved and an on-going process and
a never-ending process. Because every activity is done to achieve a target once
the target is achieved we define new targets hence the process becomes cyclic in
nature so becomes continuous.
 Management is an integrative process. The management integrates the available

resources and directs them in to achievement of the desired outcome. The major
objective is to achieve these goals in most efficient and effective manner. Of all
resources, the human resources are the most precious and difficult to manage.
And a good management is able to make synergies out of human and non human
resources by integrating their efforts in the most suitable manner.
 Management is intangible. Management is intangible as it is not seen as a thing

or a material it is experiential in nature which means we can feel its presence in
the form of results such as efficient organisational structures, better and informed
decisions, increased productivity, and heightened morale and motivation of
employees. So management is intangible and can be felt by employee satisfaction,
wealth creation etc.
 Management is contingent. Management is contingent as there is no best way of

doing things and each application or decision is based on the situation. A manager
must take into account the prevailing situation to solve a particular problem.
 Management is multi-disciplinary. Management techniques, principles and

theories are drawn from other disciplines of knowledge like sociology, psychology,
engineering, anthropology, statistics etc. Management depends upon wide
knowledge and practices derived from various disciplines. Management as a field of
study has grown taking the inputs of so many other disciplines.
 Management is a dynamic function. Management is a dynamic function of any

organisation as it keeps on changing to meet the requirements of the organisation
and at the same time change the organisation to the requirement of the business
environment. Management sometimes has to work to alter the business
environment also. So we can say that management is a dynamic function which
makes it more capable to face the challenges brought about by economic, social,
political, technological or international factors.
 Management is system of authority:- Management is distribution and use of

authority in designating task allocating resources so as to achieve the targets,

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according to Drucker”, Management is a multipurpose organ that manages a
Notes business, manages managers and manages workers and work”. Managers at
higher level have more authority than others.
 Management is both a Science and an Art. Management has an organized body

of knowledge “which contains certain universal truths”. So it is called a science.
Management refers to a distinct class of activities about which knowledge can be
obtained and skill in its application acquired. As an art, management implies to
the ability and skill of a manager in applying these principles of management and
achieving the targets through a team of people and resources available to them.
 Management is all pervasive. Management function is all pervasive which means

we can apply the principles of management in all areas and levels of organisation.
Management is present in all the activities and department of the organisation, and
on a broader sense we can say that no function can be done without management.
 Management is for economic resource management is a factor of production like

the money, material, machine; manpower etc, as the success and productivity of
any organisation depends on the quality of management. This is the reason even
when smaller organisations with lesser other resources are performing better than
bigger lot as the management is more efficient and effective in the market place.
Functions of Management
The management performs various functions in management of an organisation
before we proceed to defining the functions of the management, we should first know
about what are the objectives which an organisation seeks to fulfill
Objectives of the Management

The management of the organisation and its various activities are done to achieve
certain predetermined targets following are the examples of such targets.
 Efficiency:- The management objective can be to increase efficiency by improving

productivity by maximizing output with the same amount of inputs.
 Optimization of Resource Utilization:- management may set a target to reduce

wastage of time, money, and efforts etc so as to optimize the resource utilization.
 Higher level of customer Satisfaction:- The objective can be to know the voice of
customer and develop safe, secure and economical products which can generate a
higher level of satisfaction.
 Better Workforce. Management tries to build a team of efficient workers who are
happy and satisfied with the organisation. They are cooperative and contribute to
the goals of the organisation.
 Wealth Creation for the stakeholders:- Management may set the objective
to create wealth for the stakeholders like shareholder, financers, employees,
customers, vendors, suppliers, society & c .
 Quality Assurance and enhancement:- The objectives can be to establish

and implement quality management system to improvise various processes and
products of the organisation to bring better products in the market which can delight
the customer.

 Corporate Social Responsible:- The objective could be to justify its presence in
the market place, society, nation and customer to be a socially responsible entity of Notes
the society at large.
Relations with Suppliers. Management attempts to achieve good relations

or partnering with the suppliers of raw materials and finance so as to continue in
production throughout the year.
Achieving the triple bottom:- Management may have the objective to achieve the
economic, social and environmental targets, set by them, also known as triple bottom
approach.
 Better Working Conditions. Management seeks to ensure better quality of work

life for its employees by implementing various systems like fair wages for the work,
security of employment, proper working conditions and better life for the workers.
Management raises the standard of life of the workers.
Managerial Functions
Based on the studies and researches of various management scholars we can
define the functions of management as follows:
Planning Organising Staffing Leading Controlling

Defining targets, What to be Planning and Guiding and Monitoring the
plans and done and how appointing directing the work as per
strategies etc. it will be done. manpower for employees. the planned
the project. status .
Planning
Planning is a fundamental process to ascertain and define the objectives of the
organisation, the goals that have to be achieved for the fulfillment of the objective, planning
involves deciding in advance what to do, when to do, where to do, how to do, who will do.
Planning provide the base for the functioning of all the activities in the organisation.
Organising
Organising is process to plan and arrange organisation’s resources like
materials, infrastructure and technology, human resource, finance in such a way that
organisational objectives can be achieved in the minimum effort. It involves division of
work, authority and responsibilities among departments, individual and groups defined
in terms of organisational structure. Organising also define the formal channels of
communications and interdependencies among the different parts of organisation
required for coordination and work accomplishment.
Staffing
Staffing is a process to employ right kind of person at all the designation defined
by the organisation in right numbers, staffing involves to forecast the human resource
requirements for the organisation, to recruit, select and place the individuals on the job
and also perform the administrative decision like performance appraisal, promotion and
transfer etc. Today staffing also include human resource development & training, career
planning etc.
Directing
The process of supervising, guiding and eliminating barriers to performance of the
subordinates is directing, employees direction is that aspect of management which
deals with initiating the work, monitoring the activities to evaluate whether the activities
are done according to the plan or not, in case there is a mismatch between the actual

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and the plan the manager has to find out the causes and rectify it by influencing,
Notes guiding, supervising, motivating sub-ordinates for the achievement of organisational
goals. Direction has following elements
 Supervision- Implies overseeing the work of subordinates by their superiors. It is

the act of watching & directing work & workers.
 Motivation- Means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.
 Leadership- May be defined as a process by which manager guides and influences

the work of subordinates in desired direction.
 Communications- Is the process of passing information, experience, opinion etc

from one person to another. It is a bridge of understanding.
Controlling
Controlling means measurement of accomplishment against the standards and
correction of deviation if any to ensure achievement of organisational goals. The
purpose of controlling is to ensure that everything occurs in conformities with the plans
and standards. An efficient system of control helps to predict deviations before they
actually occur. According to Theo Haimann, “Controlling is the process of checking
whether or not proper progress is being made towards the objectives and goals
and acting if necessary, to correct any deviation”. According to Koontz & O’Donell
“Controlling is the measurement & correction of performance activities of subordinates
in order to make sure that the enterprise objectives and plans desired to obtain them as
being accomplished”. Therefore controlling has following steps:
a. Establishment of standard performance: - Defining a parameter on which

the performance of a task will be evaluated.
b. Measurement of actual performance. To monitor and record the actual
performance.
c. Comparison of actual performance with the standards and finding out
deviation if any. Analyzing the gaps to find out corrective actions
d. Corrective action. To implement counter measures to bring the process
towards goal accomplishment.
Managerail Skills
For performing the management functions a manager should have certain skill set.
With time the skill set required by a manager keep evolving, managerial skill means
the personal ability put to use by a manager for the accomplishment of organisational
goals. The job of a modern manager has become very complex. We can enlist the
various skills required by a manager are as follows.

Planning skills: - Planning skills is the skill required by the manger to plan things
this include ability of future thinking, prediction and forecasting, making decisions with Notes
the perspective to analyze various situations and back up plans, ability to implement
things and follow them so as to realize the predetermined goals.
Organising Skills: - Includes the ability to specify and divide work among team,
ability to use the competencies of the people working under him, maintain the harmony
of relationship flow of communication, handling and resolving conflict.
Leadership: - Ability to lead people from front, to inspire and guide, ability to assess the
situation and guide the team. Ability to motivate the members, to achieve their targets and
ability to inculcate decision making habits, in the subordinate and solve their problems.
Decision Making:- This include the ability to identify and formulate different
alternatives available, to prioritize which decisions are more important, to be able to
make right choices, not to avoid delaying or implementing decisions, to make timely
decisions and follow its implementation.
Controlling skills:- Ability to implement effective monitoring mechanism on the

various processes, to take corrective actions without hurting the moral of the team and
encourage planned execution of the tasks.
Technical skills:- Ability to use the tools, procedures, or techniques of a specialized

field, technical skills are required to perform the task effectively, the technical skills are
more critical for the lower management as they have to directly supervise and guide the
work progressing on the floor. The first line supervisor in a manufacturing firm needs
greater knowledge about the technical aspects of the job compared to his top boss. In
a small manufacturing organisation, even the top boss who owns the company needs
to have a lot of technical skills. However, in big organisations, technical skills are more
important at the lower levels.
Human skills: - the ability to work with people, understand their competencies
to utilize them, ability to understand the weaknesses and help them eliminate it, to
harmonize interpersonal relationships and motivate them to work in team spirit.
It also includes the ability to understand the personal problems of the employees and
guide or counsel them as personal life can also be the reason of failing performance.
This also includes the ability to negotiate, resolve conflict and motivate people to realize
their potential.
Conceptual skills:- Conceptual skill means the ability to see the organisation as a
whole and it includes recognizing how the various functions of the organisation depend
on one another. It also makes the individual aware how changes in one part of the
organisation affect the others. It extends to visualizing the relationship of the individual
business to the industry, the community and the political, social and economic forces
of the nation as a whole. Thus, the manager gains insight into improving the overall
effectiveness of the organisation
Analytical Skills:-These refer to abilities to proceed in a logical, step-by-step and

systematic manner, to examine the various aspects of specific issues and to understand
complex characteristics of a phenomenon. It is also the ability to break down a problem
into its components and to ‘clinically’ examine its dimensions. Analytical skills are
needed for problem solving and decision making, to evaluate performance, and to
manage complex situations.

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Administrative Skills:-These centre around ability to act in a pragmatic manner, get
Notes things done by implementing decisions and plans, to mobilize and organize resources
and efforts, to co-ordinate diverse activities and to regulate organisational events in an
orderly manner.
1.2 Levels of Management

The level of management signifies the hierarchy of management in any organisation.
We can classify the levels of managers depending upon their activities. The number of
levels will depend upon the size of business, number of workers and effective span of
control other such factors of management.
The hierarchy of management positions from top to bottom is called levels of

management. The level of a manager in the hierarchy determines the amount of
authority and responsibility empowered to him and the decision making powers. So
simply we can say the top management level will have more authority and power along
with greater responsibility as compared to the supervisory level of managers with less
authority and responsibility.
Pfiffner and Sherwood have classified management levels into four viz., Corporate
management, Top management, and Middle management and Supervisory
management. Koontz and O’Donnell and Brech have classified the levels into two, viz,
top level management and supervisory level management.
Joseph Litterer has suggested three levels, viz., Institutional level, General
management and Departmental management.
J.B. Batty has classified management into four levels, viz., Top management, Upper
middle management, Middle management and Supervisory management.
Based on the analysis of so many experts we can classify the levels of management
in to three levels as
Top Management Level:- Include the Board of Director, Chairman, Chief Executive
Officer, Managing Directors, etc.
Middle Management Level: - Include Head of Business Units, Department Heads,

Functional Heads, Division Heads etc
Lower Level Management:- Operational Heads, Supervisors, Front line Managers

etc.
Top Management
Some of the functions of top management are
 To formulate the vision and mission for the company
 To lay down policies and objective of the organisation
 To formulate rules and regulations for the functioning of the organisation
 To formulate long term goals and strategy planning
 To set targets for all the other functional bodies working under him
 Resource allocation for functioning of the organisation

 To coordinate the activities of the organisation for the achievement of the set goals.
Notes
 To review the performance of the company and the lower level of the management.
Middle Management
Some of the functions of middle management are--
 They are the link between the Top and Lower Management levels.
 To implement the policies and strategy as given by the top management
 To achieve the targets set for them by utilizing the resources provided to them.
 To perform functions of management like planning, organising, staffing, directing

and controlling for his area of work.
 To instruct the lower level of management so that the necessary task can be done.
 To monitor and appraise the performance of the lower level of management and
suggest appropriate administrative actions.
 To improve interdepartmental and intradepartmental relationship in his area.
 To provide guidance and remove barriers in achievement of targets by the lower

rung of management.
 To negotiate and allocate resources to achieve the targets set by the top
management.
 To align the functioning of his department or division or area under him in line with
the organisational targets.
Lower or Supervisory Management

Some of the functions of lower management are--
 To actually supervise the beginning, monitoring of different tasks or operations. To

directly supervise the actual work and manage operative employees.
 To direct and control the function rather than planning and organising, such
planning and organising is only limited to short term and on tactical basis.
 To achieve the operational targets which help the achievement of departmental or

divisional targets which in turn contribute in the achievement of the organisational
targets.
 To implement the top management policies and provide feedback to the higher
levels of management.
 To plan the day-to-day activities and assign tasks to their subordinates, guide them
and take corrective steps whenever necessary.
 To arrange for necessary materials, machines tools, etc. for workers and to provide
them the necessary working environment.
 To provide necessary skill training and guidance required by the operative work
force.

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 To help resolve day to day problems of the workers.
Notes
 To act as an interface between the operative staff and higher management for
various issues like appraisal, grievances, complaints etc.
1.3 Evolution and Foundations of Management Theories – Classical and Neo-

Classical Theories,
Classical Theories
Bureaucracy
Developed by Taylor as a concept of industrial engineering then refined by Max
Weber. The bureaucracy is a concept of management where the work is done by
emphasizing on specialization to increase efficiency, which is achieved by dividing
work among departments and the operations are controlled by rules and regulations.
The overall organisation is represented in to a hierarchy of duties and responsibilities
and has a very formal relationship structure. Key characteristics of Bureaucracy are as
follows.
 Hierarchy: - The overall organisational structure is in responsibilities and authority.
 Division of Work:- The work is divided in to specialized job and for each specialized
job one department is there, where the job is further broken down in to more simple
tasks. Each employee is expected to perform only routine and well defined task.
It was assumed that if a person will keep on doing one thing routinely then he will
develop specialization to perform that task, so efficiency will be increased
 Rules, regulations and procedures:- All the work and behavior is controlled
through set of rules and regulations, by implementation of these rules and
regulations it was expected to achieve better control and consistency of the
performance.
 Recording:- Extensive use of written documents or records have to be kept, each

instruction, decision, activity or any other communication has to be recorded and
files for such records have to be maintained for future reference.
 Interpersonal Relationship:- Bureaucracy emphasized on the formal structure

of relationship which is based on the levels of hierarchy and departmentalization,
hence informal interpersonal relationships were discouraged and emphasis was on
to follow rules and regulation than maintaining the interpersonal relationship among
people.

 Administration:- Bureaucracy encouraged administrative class, a section in the
organisation responsible for coordinating work, giving instructions and evaluating Notes
performance, there selection was based on their merit and experience, and their
powers were greater as compared to others and enjoy maximum authority.
 Centralization:- The bureaucracy works on the principles of centralization

which means the authority is allocated to very few people in the organisation
and empowerment of employees was negligible. The employees are expected to
perform a task which is being instructed to them and not make any decision even
for their own work.
 System of supervision and subordination:- Strict supervision is maintained and

concept of subordination which means the employees below a particular level in the
hierarchy has to follow the instructions given from above.
 Unity of command:- Formal structure of command was given, every employee is

entitled to follow the instruction of his own senior only and require the work only
assigned to him.
 Application of consistent and complete rules (company manual):- All activities

and decisions were undertaken according to rules given by the company, any kind
of administrative decision, disciplinary action or execution of work is regulated by
these rules.
 Assign work and hire personnel based on competence and experience:-

The work is assigned on the basis of strict rules and regulation devised by the
organisation. The person has to fulfill the requirements of qualification and
experience of the position before being placed on the job.
Advantages of Bureaucracy
 Specialization:- One of the advantages of bureaucracy is specialization,
bureaucracy is based on the division of work among departments where the work is
broken down into simpler tasks performed by an employee. The employee perform
the same task on a daily basis which make him master of that particular work which
improves efficiency and reduce errors, so bureaucracy enhances the skill of the
employee and make him specialist in performing his task. Due to specialization the
work is done in less time and is free form defects.
 Rationality:- Each function, activity, decision in the organisation is done on the

basis of rules and regulations, these rules and regulation is common for and known
to people, hence people know what is expected from them, what role they have
to play and what is their level in the hierarchy. This brings logical structuring of
activities brings about orderly execution of tasks.
 Predictability:- The bureaucracy enhances predictability as everything is performed

according to set rules and has formal structuring hence there is no chance of
confusion, as every activity or task is formalized we can predict the outcome with
great certainty e.g if the promotion is given after completion of 3 yrs of service, then
employees who has completed the tenure of 3 yrs can be certain that his promotion
will be done.
 Democracy:- The rules and regulations are formulated according to the general
consensus of the management which is arrived after consideration of the majority
of the employees. Once these rules and regulations are set they are religiously
followed which results in to a democratic structure where the decisions are made on
the basis of majority view.

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 Stability:- The bureaucracy brings stability and this stability and specialization acts
Notes as a competency for the company, such management is suitable where efficiency is
required in a stable business environment.
Disadvantages of Bureaucracy
 Rigidity: - The rigidity comes to bureaucracy as a fact that this management style
is too formal, and the process of bringing changes in the rules and regulations
is too tedious which makes this style of management rigid, because of this such
management style can not respond to changing business environment.
 Impersonality:- Due to strict adherence of rules and regulations and extreme

form of formalization such management style ignore the human quotient of the
organisation i,e. organisation ignore the needs and limitations of people, and all the
decisions are taken based on the rules only, this makes the organisation more of
mechanical in its dealing.
 Displacement of the organisation objectives:- Due to extreme emphasis on the

specialization of once job, the people working in a department is so engrossed
in focusing on his departmental targets that they forget the prime objective of the
organisation hence a synchronization between the functioning of every department
is missing which leads to non fulfillment of organisation objective.
 Compartmentalization of Work: - Due to strict rules and regulations the

employees are prevented to perform any other task apart from being assigned
which he is capable to perform, this leads to differences in department and
discourages employees to perform better and learn new skills e.g. a person who
is working on a machine if not assigned a job of conducting repair work of the
machine, he will have to call the worker from maintenance department even if he
can do the repair by himself. This not only stop the working unnecessarily for longer
duration it also de motivates the employee in increasing his skill set.
 Centralization and Empire building:- The managers at the higher rung try
to enhance their powers and status by adding more people, space, physical
facilities this leads to wastages of resources. This also leads to more rigidity in the
management.
 Red Tapism:- Under the bureaucracy the rules and regulations guide the activities
and each activities have to be authorized by higher level and for each authorization
or communication have to be recorded this lead to slowing down of work as for
even minor issues there has to be formal communication from lower level to upper
level for approval and then the approval has to travel through the formal channels to
the actual authority. This communication takes a very long time which withholds the
work and the performance of the organisation.
Frederick W Taylor’s Scientific Management

Scientific management is a concept first devised by Frederick W Taylor based
on his analysis of time and motion study conducted at the Midvale and Bethlehem
Steel Companies in Pennsylvania. F W Taylor is considered the father of scientific
management, which is an approach based on scientific study of work to bring efficiency.
According to Taylor the inefficiency in workers is because of the following reasons
1. Deceptive belief that a material increase in the output of each man or each
machine in the trade would throw people out of work

2. Defective management systems, which made it necessary for each workman to
soldier, on work slowly to protect his own best interests Notes
3. Inefficient rule of thumb methods, which were almost universal in all trades,
which cost much wasted effort
Secondly there were no effective work standards, workers had no incentives to

produce more and workers were assigned jobs unrelated to their abilities and aptitude
and there is a conflicting situation between the workers and the staff.
According to Taylor the work should not be done in casual manner but worker should
take work more seriously .He conducted various experiments at Bethlehem Steel
Plant which were related to time and motion study where attempts were made to find
appropriate timing and best methods of doing a thing. He selected a Pennsylvanian
Dutchman named Schmidt (real name Henry Nolle) and calculated that Schmidt could
load 47 tons a day rather than the usual 12½ tons, by offering him an increase in pay
of $ 1.85 per day instead of the usual pay of $ 1. 15 per day. Taylor used variable
methods of handling and loading the pig iron and also used variable methods of
ergonomics to find out the maximum amount of productivity.
Such precise calculations of productivity, he believed, meant that workers would

know exactly what was expected of them and that managers would know exactly how
much should be produced. It also meant that more accurate piecework rates could be
set with more reliable bonuses and penalties.
He made careful experiments to determine the best way of performing each

operation and the amount of time it required, analyzing the materials, tools, and work
sequence and establishing a clear division of labor between management and workers.
Such an approach anticipated the rise of reductionism the belief that if a problem
can be reduced to its smallest component, and that component understood, then it is
possible to comprehend the whole.
Such experiments laid the groundwork for the principles of scientific management
which were first published in 1911. These included time studies, standardization of tools
and implements, standardization of work methods etc.
Basics of Scientific Management

According to Taylor each task must be scientifically designed so that the old rule of
thumb methods can be replaced with scientifically developed methods. Taylor thought
that there was one and only one method of work that maximized efficiency. “And this
one best method and best implementation can only be discovered or developed through
scientific study and analysis... This involves the gradual substitution of science for ‘rule
of thumb’ throughout the mechanical arts.”
Workers must be selected on the basis of scientific management which means they
should be made aware of the methods of doing work and trained to perform the task as
prescribed; it will significantly improve the productivity. Bring together the scientifically
designed jobs and workers (having the required training and aptitude) so that there will
be match between them. The work should be divided between the management and
worker, and should have a close cooperation.
Scientific Task Planning

According to this concept of scientific management theory, we should analyze each

0
task or activity to define a scientific method of doing it, and also calculate the amount
Notes of work an average worker can perform, this is known as fair day’s work. It is the
responsibility of the management to decide what to do, how to do, when to do, where to
do and by whom to be done.
And there should be standardization of all the parts of doing a thing.
Standardization
Scientific management advocated the concepts of standardization where by
conducting work study (time study, motion study, method study and fatigue study)
we can find out the best practice of doing a thing, which can act as the basis of
performance evaluation, this standardization can be applied to process, material, time,
product and working conditions etc. having standardization will allow to do the work
more consistently.
Functional Foremanship
Scientific management theory advocated the concept of functional foremanship.
Taylor concentrated on improving the performance of foreman who actually supervise
the work this role in the factory set-up. He identified a list of qualities of a good foreman/
supervisor and found that no single person could fit them all. Hence the concept
of functional foremanship was developed which is group of eight persons. Taylor
advocated separation of planning and execution functions. Under the factory manager
there was a planning in charge and a production in charge. Under planning in charge
four personnel namely instruction card clerk, route clerk, time and cost clerk and a
disciplinarian worked. These four personnel would draft instructions for the workers,
specify the route of production, prepare time and cost sheet and ensure discipline
respectively. Under Production in charge, personnel who would work were speed boss,
gang boss, repair boss and inspector. These respectively were responsible for timely
and accurate completion of job, keeping machines and tools etc., ready for operation
by workers, ensure proper working condition of machines and tools and check the
quality of work. Functional foremanship is an extension of the principle of division of
work and specialization to the shop floor. Each worker will have to take orders from
these eight foremen in the related process or function of production. Foremen should
have intelligence, education, tact, grit, judgment, special knowledge, manual dexterity,
and energy, honesty and good health. Since all these qualities could not be found in
a single person so Taylor proposed eight specialists. Each specialist is to be assigned
work according to her/his qualities.
Method Study
The objective of method study is to find out one best way of doing the job. There
are various methods of doing the job. To determine the best way there are several
parameters. Right from procurement of raw materials till the final product is delivered
to the customer every activity is part of method study. Taylor devised the concept of
assembly line by using method study.
Motion study
Motion study refers to the study of movements like lifting; putting objects, sitting and
changing positions etc. this study also deals with ergonomics of doing a thing under this
study unnecessary movements are sought to be eliminated so that it takes less time
to complete the job efficiently. For example, Taylor and his associate Frank Gailberth
were able to reduce motions in brick layering from 18 to just 5. Taylor demonstrated that
productivity increased to about four times by this process.

Time study
It determines the standard time taken to perform a well-defined job. Time measuring Notes
devices like stop watches are used for each element of task. The standard time is fixed
for the whole of the task by taking several readings. The method of time study will
depend upon volume and frequency of the task, the cycle time of the operation and time
measurement costs. The objective of time study is to determine the number of workers
to be employed; frame suitable incentive schemes and determine labor costs.
Fatigue study
Fatigue study seeks to determine the amount and frequency of rest intervals in
completing a task. A person is bound to feel tired physically and mentally while working
and if rest time is not provided while working. The rest intervals will help to regain
stamina to work again with the same capacity. This results in increased productivity.
The rest timing and frequency is decided on the basis of long working hours, doing
unsuitable work etc even having uncordial relations with supervisor, or unsuitable
working condition will also cause more fatigue hence such hindrances should also be
eliminated.
Differential Piece Rate System

To motivate worker Taylor advocated differential piece wage system. He wanted
to differentiate between efficient and inefficient workers. The standard time and other
parameters should be determined on the basis of the work study. The workers can then
be classified as efficient or inefficient on the basis of these standards. He wanted to
reward efficient workers. In this scheme a worker who completes the normal work gets
the wages at higher rate per piece than a worker who fails to complete the same within
the time limit set by management, so he introduced different rate of wage payment for
those who performed above standard and for those who performed below standard.
For example, it is determined that standard output per worker per day is 100 units and
those who made standard or more than standard will get Rs. 10per unit and those
below will get Rs. 9 per unit. Now an efficient worker making 110 units will get Rs10/
unit or total of Rs. 1100 per day whereas a worker who makes 90 units will get 9×90
= Rs. 810 per day. According to Taylor, the difference between the wages should be
enough for the inefficient worker to be motivated to perform better.
Henry Fayol (1841-1925)

Henri Fayol, known as the father of modern management theory was a French
engineer and later director of mines, for coal and iron combine of Commentry
Fourchambault, where he spent his entire career, joined as a junior executive 1860 and
by 1888 become director. The company was near bankruptcy and he had transformed it
into a financially strong organisation, he was little unknown outside France until the late
40s when Constance Storrs published her translation of Fayol’s 1916 “Administration
Industrielle et Generale “. In it he described and classified administrative management
roles and processes from it he became recognized and referenced by others in the
growing discourse about management. He is frequently seen as a key, early contributor
to a classical or administrative management school of thought (even though he himself
would never have recognised such a “school”).
His analysis about administration was entirely built on his personal observation
and experience of what worked well in terms of organisation. His aspiration for an
“administrative science” sought a consistent set of principles that all organisations must
apply in order to run properly.

2
F. W. Taylor published “The Principles of Scientific Management” in the USA in 1911,
Notes and Fayol in 1916 examined the nature of management and administration on the basis
of his French mining organisation experiences.
According to scientific management Fayol classified the business operation into six
major activities
Technical – Production
Commercial – Buying and selling
Financial – Use of capital
Security- protection of property and safety
Accounting – keeping records of financial transactions Managerial According to

Fayol the management should perform the following five functions
 To Forecast & Plan – To forecast about future, define objectives and formulate
plans of action to achieve these objectives.
 To organize- Mobilize material, human resources other resources of the

organisation to implement the required plan.
 To Command- To give instruction and direction to employees so as to maintain

activity among the personnel to achieve desired goals
 To co-ordinate- To harmonize and bind together the activities and efforts of the
organisation to achieve the set goals.
 To control- Monitor to see that everything occurs in conformity with plan
These five management functions are still the basis of management functions today.
For organisational design and effective administration, Henry Fayol had also given
fourteen principles known as Henry Fayol’s 14 Principles of Management. According to
him these principles can be applied in all types of organisations irrespective of size,
function and levele.
Division of labor
According to this principle of work should be allocated among people this will lead
to specialization as the employees will be able to concentrate on their activities and will
enhance skills and understandings, resulting in to more work focus and efficiency.
Authority with corresponding responsibility

According to this principle there should be equity in the responsibilities allocated
to person and authority required to carry out these out these responsibilities, any
inequality will lead to failure. Authority is the right to given instruction and power to
obtain obedience. A manager should not only have official authourity he should also
have personal authority in terms of intelligence, experience etc so any individual to
whom the authority is given must be competent to bear the responsibility as well.
Discipline
According to this principle employees must obey and respect the rules that govern
the organisation, good discipline is the result of effective leadership. There has to be
a clear understanding between management and workers regarding the organisation’s

rule and the judicious use of disciplinary actions for violations of the rules. Good
discipline brings out harmony between management and the worker which results in to Notes
better coordination and predictability.
Unity of command
According to this principle the employee should report only to one superior
and receive instructions from him only, this prevents unnecessary confusion and
indiscipline, reporting to two or more superiors will result in conflicts in instruction and
dilution of authority.
Unity of direction
According to this principle there should be one manager for one plan, so only one
person should head all the activities having same objective.
Subordination of individual interest to the general interest

According to this principle the organisational interests take precedence than the
personal interests of employee, the managers should sacrifice their personal interests
for the achievement of the organisational interests so that each employee learn from
the manager, to give precedence to organisational interest.
Remuneration of personal
The compensation or remuneration should be fair to employee and the employer, so
as to give satisfaction to both the staff and the firm, even a profit sharing can be done
but only for the managers only.
Centralization
According to this the manager should retain the final responsibility but also
give enough authority to subordinate to do their job properly. Fayol stated that there
should be proportionate division of authority but the manager should bear the overall
responsibility of the work.
Scalar chain or line of authority

The scalar chain of command of reporting relationships from top executive to the
ordinary shop operative or driver needs to be sensible, clear and understood. In case
the chain creates communication slow down, cross communication can be permitted, if
consensus by all parties and superiors are there and they are informed.
Order
Everything in the organisation should be in order, place for everything and
everything at its place, a place for everyone and every one in his place.
Equity
Equity, fairness and a sense of justice “should “pervade the organisation - in
principle and practice. The application of equity requires good sense, experience and
good nature for soliciting loyalty and devotion from subordinates.
Stability of tenure.
Time is needed for the employee to adapt to his/her work and perform it effectively.
Stability of tenure promotes loyalty to the organisation, its purposes and values.
Management should implement practices which foster long term commitment of people,
lack of stability can effect the fortunes of the company.
Initiative
Employees must be encouraged to think through to implement a plan of action,
even though some mistakes may result, the opportunity to perform independently
is an essential component of employee growth and development. At all levels of the

4
organisational structure, zeal, enthusiasm and energy are enabled by people having the
Notes scope for personal initiative.
Esprit de corps
Unity is strength; organisation should promote team spirit which will give the
organisation a sense of unity.
These principles were taken as universal principles of management and till date have
importance in undertstanding the concepts of management, Fayol stated that any one could
learn these principles and apply successfully in the management of any enterprise.
Fayol also defined a list of managerial skills which a manager should acquire in
order to become more effective. These include skills like Physical health, Mental
ability, Morality, Educational competence, Technical skills and Experience.
Limitations of the Administrative theory of Henry Fayol

Although considered as father of Modern management his theory of administrative
management is criticized on following.
Lack of empirical evidence:- The theory is criticized that it is not a result of

empirical data analysis and is purely based on the experience of one person only.
Neglect of people:- The theory emphasized only the organisational rules and
people are considered as passive factor, the behavior of people can be changed by
incentives and organisation’s rules.
Considered as pro management thought:- The theory is criticized on the ground

that it only emphasizes on what managers should know and do rather than a general
understanding of managerial behavior. It does not provide clear guidelines for how,
when and where the principles can be applied.
False Assumption:- The theory is also criticized on the fact that assuming that
these principles can be applied at all the organisations is false, as it does not recognize
the differences of objective, work, situations faced by the organisation. Similarly only
authority vested in managers can control employees. Managers have to act differently
in different situations, which depend on the varying factors of internal environment and
external of the business.
Historical Significance: - The theory is valid only for the past as the current
business environment is entirely different from the time when the theory was
propounded. Hence the significance of the theory is minimal.
Limitations of the Scientific Management Theory

The theory is seen as an exploitive tool in the hand of management
The theory stated to find out standardization of doing things and targets were set, it
also emphasized on the differential piece rate system the objectives were to increase
the productivity and improve the economic lot of the workers but in actual sense the
benefits reaped by the enterprise were not actually shared by the workers, so it become
a tool only to set higher parameters of productivity but wages were not modified in
proportionate manner.
Lack of people orientation: - This theory standardized the tasks, so there was no
room of flexibility for the people at work, they were considered as a tool of operation
only performing standard work in a standard process. The workers were expected to
repeat the same operation daily in a mechanical way this lead to high demotivation, due
to boredom and monotony. The efforts of people are severely neglected.

Unoriginal work
Some experts like Hoagland felt that contribution expressed by such theory is Notes
exaggerated and a lie for which he gave the references of the Taylor’s own notes and
works.
The theory is unrealistic in nature

Some experts term this theory as unrealistic in nature as it states that motivation of
employees can be improved by economical incentives. It completely ignored the fact
that people also require to fulfill their social, ego needs etc which also motivates them a
lot.
The theory is considered undemocratic

This theory segments the worker in two categories one doing planning and other
executing, so one segment is entirely doing the more creative, thinking and decision
making tasks and the other lot is only following and not applying any knowledge which
creates a divide among employees.
The theory is considered Un- psychological

The theory is considered as un- psychological because it lacks accurate information
about how the wages will be calculated or how worker’s efficiency will be calculated or
what are the parameters on which the workers will be evaluated to find suitability for
the job.
Theory is considered anti social

It is considered anti social due to the fact it treats the employees as a factor of
production only doing work mechanically, some experts claims it aims at excluding the
average workman from the field of work as far as possible.
Neo Classical Theories of Management

Principles of the neoclassical approach
By the year 1920 – 1930 the theories in management started emerging that was the
result of incompleteness and narrow perspective of earlier theories. Classical approach
stressed the formal organisation. It was more of mechanistic system and ignored major
aspects of human nature. In contrast, the neoclassical approach introduced an informal
organisation structure.
The neo classical theories were also known as human relations theory and included
the insights form behavioral science like psychology, sociology and anthropology.
Elton Mayo was also the researcher who conducted the Hawthorne experiments in the
Western Electric Company from 1924 to 1933. These experiments became the basis of
this theory.
The Hawthorne Experiments and the Hawthorne Effect

Illumination Studies, 1924 -1927
The Hawthorne experiments begin with a sequence of illumination tests from
1924 to 1927, set out to determine the effects of lighting on worker efficiency in three
separate manufacturing departments. The intensity of light under which one group was
systematically varied (known as test group) and whiles the light intensity at control
group was held constant. Accounts of the study revealed that the productivity kept
on increasing in the both the situations, even there is increase in productivity when
light intensity was reduced in the test group this lead to the conclusion that there is
no significant correlation between productivity and light levels. The results prompted
researchers to investigate other factors affecting worker output.

6
Relay Assembly Test Room Experiments, 1927-1929
Notes The next experiments begin in 1927 focused on the relay assembly department,
where the electromagnetic switches that made telephone connections possible were
produced. The manufacture of relays required the repetitive assembly of pins, springs,
armatures, insulators, coils, and screws. For the experiment a small group of workers
were placed in a separate room and a number of factors were changed, like wages of
the test group was increased, the workers were allowed to chose their own rest timings,
and their suggestions were also considered in changes. Surprisingly the productivity
increased in both the test and the control group even when there is no change in the
control group.
The above two experiments shown that apart from changing the factors there is
something else which helped the increase in the productivity even when the factors for
control group were held constant, this conclusion lead to the concept of Hawthorne Effect.
The increase in the productivity in the control is attributed the special treatment
and attention which the workers got due to the experiment. This special attention and
treatment was concluded to be the factor to increase of the productivity. They workers
were allowed to participate in decision making about work changes, and were not
subject to usual restrictions. The result of such attention and special treatment caused
stimulating feeling of pride and belongingness which resulted in to increase in the
productivity. This increase in worker’s performance by providing attention and allowing
them to participate is known as Hawthorne effect.
Bank Wiring Room Experiment

The final Hawthorne experiment was conducted studying 14 male workers assigned
to the Bank Wiring room. These men were engaged in the assembly of terminal banks
used in telephone exchanges. The employees were paid the regular wages depending
on the efficiency rating plus the bonus based on average group effort. The objective was
to study the dynamics of the group when incentive pay was introduced. It was expected
that the high performing individuals will bring pressure on the less efficient workers in
an attempt to increase output and thus take the advantage of group incentive plans but
in the finding nothing happened. The work group had established a work “norm” – a
shared expectation about how much work should be performed in a day and stuck to it,
regardless of pay. It was concluded that work group norms, beliefs and sentiments had
a greater impact in the influencing individual behavior as compared to the economic
benefits given by the management.
Elton Mayo came to the following conclusions as a result of the study:
 The aptitudes of individuals are imperfect predictors of job performance.

Although they give some indication of the physical and mental potential of the
individual, the amount produced is strongly influenced by social factors.
 Informal organisation affects productivity. The researchers discovered a group

life among the workers. The studies also showed that the relations that supervisors
develop with workers tend to influence the manner in which the workers carry out
directives.
 Work-group norms affect productivity. The Hawthorne researchers were not the
first to recognize that work groups tend to arrive at norms of what is “a fair day’s
work.” However, they provided the best systematic description and interpretation of
this phenomenon.

 The workplace is a social system. The researchers came to view the workplace
as a social system made up of interdependent parts. The worker is a person whose Notes
attitudes and effectiveness are conditioned by social demands from both inside and
outside the work plant. Informal group within the work plant exercise strong social
controls over the work habits and attitudes of the individual worker.
 The need for recognition, security and sense of belonging is more important in
determining workers’ morale and productivity than the physical conditions under
which he works.
The major finding of the study was that almost regardless of the experimental
manipulation, worker production seemed to continually improve. One reasonable
conclusion is that the workers were happy to receive attention from the researchers
who expressed an interest in them. Originally, the study was expected to last one
year, but since the findings were inexplicable when the researchers tried to relate the
worker’s efficiency to manipulated physical conditions, the project was incrementally
extended to five years.
Individual
An individual is not a mechanical tool but a distinct social being, with aspirations
beyond mere fulfillment of a few economic and security works. Individuals differ from
each other in pursuing these desires. Thus, an individual should be recognized as
interacting with social and economic factors.
Work group
The neoclassical approach highlighted the social facets of work groups or informal
organisations that operate within a formal organisation. The concept of ‘group’ and its
synergistic benefits were considered important.
Participative management
Participative management or decision making permits workers to participate in the
decision making process. This was a new form of management to ensure increases in
productivity.
Work Environment
Management should create conducive and positive work environment where people
are able to achieve organisational goals along with the personal goals. A positive
environment can be created when goals are clear and understood by employees,
incentive schemes are properly used to improve performance, decisions are timely and
participation is there, conflicts are considered and resolved openly, the work itself is
interesting and growth oriented.
Leadership
The leader should be a competent enough to be flexible to various personalities and
situations. He should be able to create a pleasant work climate where strict control is
absent and employees are allowed to participate in decision making process.
Criticism of Neo Classical Theory

Unrealistic
The critics of the Neo Classical Theory said that by allowing the workers to develop

8
loyalties toward organisation they will only think about self interests, and by preaching
Notes collaboration instead of competition will lead to decreased efficiencies, interest in
human relationship is stated as sentimentality and unrealistic desire to make everyone
happy. It was considered impractical solution to bring harmony between management
and the worker.
Lack of empirical validity

The theory is criticized on the grounds of weaknesses in design, analysis, and
interpretation. Consistency between data and conclusions drawn is also not found, the
experiments were carried out on only one group and not any sample group which can
be used to generalize the interpretations.
Narrow Approach
The theory is also criticized on the grounds that there is overemphasis on the
psychological aspects and the structural and technical aspects were neglected. It
also overlooks the economic dimension of work satisfaction, the motivation factor by
economical benefits was undermined.
The happiness factor of productivity

The theory states that happy employees will be productive employees, but it is the
nature of man, secondly it failed to show any consistent relationship between being
happy and being more productive.
Overemphasize on group norms

The theory overemphasize the role of group norms, it states that group determines
the targets for individuals, and individuals are ready to sacrifice their targets under
group pressure further there is no certainty that groups will always be instrumental in
delivering satisfaction to members.
Behavioral Science Approach to Management

Behaviorism is “the study in humans and animals of externally observable
behavioral responses as functions of environmental stimuli. The mental state is
either generally ignored or redefined in stimulus/response terms. The behavioral
approach views the enterprise as a social organism, where people come to work for
the fulfillment of organisational and personal objectives. It is termed as behavioral
sciences approach as it adopts a multi-dimensional and inter-disciplinary study of
employees’ behavior applying principles from behavioral sciences like psychology,
sociology and anthropology. The objective is not only to study, but to predict the future
behavior of employees and to find out ways to modify it also. Motivation, leadership,
communication, group dynamics and participative management are inbuilt in this
approach, as means of securing better employee performance and willing efforts
towards contributions to the accepted goals of the organisation.
The contributions of Burrhus F. Skinner, Abraham H. Maslow and Douglas

McGregor,F. Fiedler, V. Vroom, F. Hertzberg, E. Locke, D. McClelland, R. Hackman, J.
Pfeffer, K. Thomas and C. Perrow resulted in the development of this theory.
Skinner (1971) had given the theory of “operant conditioning.” In this theory
humans (and animals) will respond to particular stimuli and will modify their behavior
because of it. This stimuli could be either reinforcing (keep turning up to work and pay
keeps getting deposited in your bank account) or aversive (punishment.) the manager

can use reinforcement techniques to change the people behavior.
Notes
Abraham Maslow developed the need hierarchy theory where he had explained
that people are motivated by different needs like the physiological needs, security and
safety needs, social needs, esteem needs and self actualization needs, the people
desire to fulfill their higher order need will motivate them. Once a need is being fulfilled
the individual seeks to fulfill other needs in the hierarchy, so once say social needs
are being fulfilled the individual will seek to fulfill the esteem needs which becomes his
motivation factor. So the management can find out what can motivate a person and
then plan accordingly.
McGregor’s contribution to behavioral science was the development of a Theory

X and Theory Y dichotomy. Theory X and Theory Y are two approaches to the
categorization of people and a management response based on this categorization.
McGregor’s Theory X is based on a series of assumptions that people generally do not
want to work for an employer/s, while Theory Y assumptions are that people are willing
and do want to work, given the right environment. The right environment is considered
to be made up of; good conditions, the linking of individual effort with organisational
objectives, intrinsic awards for achievement, time for learning and responsibility
acceptance, capacity to exercise imagination, ingenuity and creativity and the trust
to allow intellectual potential and complex problem-solving to be realized. McGregor
understood that some of Theory Y is difficult to realize, such that management is more
likely to follow a Theory X approach. The Theory X approach means employees are
given strict instructions, left no room for independent thought and are commensurately
rewarded or punished for carrying out the assigned task in the assigned manner.
Proponents of Theory Y, including McGregor himself, prefer to see organisational goals
discussed in an open forum so that employees can gain a better understanding of
what is to be achieved, allowing the possibility for innovation in solving problems and
attaining goals.
Some other points of the behavioral theory are people like doing work as they
like doing any other activity but if they are a participant in decision making then the
commitment will be better.People don’t require extreme supervision they can exercise
self control, self direction and creative by nature.
Manager’s job is to unlock the potential of employees in the service of the

organisation. He should create a healthy environment wherein all subordinates can
contribute to the best of their capacities; the environment should provide a healthful,
safe, comfortable and convenient place to work. Manager should allow freedom to
employees in some matters concerning their work and they must be encouraged
to participate fully in all important matters. Job satisfaction will improve when the
potentials of employees are used to fulfill the organisation objectives.
Criticism of Behavioral Science Approach to Management

The theory is criticized on various grounds like the following
Motivation factor
The theory is criticized on the fact that each individual may have different
motivational needs and each need influence him differently so how can all be motivated
equally.
Compatibility of Goals
The theory stated that there is compatibility between individual and organisational
goals, but in reality individual’s desire to be autonomous and creative can be conflicting
to the organisational goals.

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Non human aspects
Notes The theory only focuses on the human relation and behavior aspects but ignores the
non human aspects of management like method, technology and structure etc.
One best Approach

The theory is criticized on the fact that it also focused on only one factor of manager
and ignored the other.
1.4 Systems Approach to organisation & Modern Organisation

Theory.
Systems Approach to organisation
According to system approach the organisation is considered as a single integrative
entity composed of different interrelated elements, organisation is considered as one
system integrating the various parts of the organisation which functions in a coordinated
manner to fulfill the desired objective of the organisation. According to this theory each
constituent element of the organisation is interrelated to each other and any effect on it
will also effect the overall organisation. The prime role of manager is to coordinate the
different activities and constituents of the organisation to achieve the targets.
According to system approach it is the synergy which comes from the coordination
of all elements of the organisation brings the unique competencies of the organisation,
we can’t view a department or an activity in isolation to improve the performance of the
organisation.
Basics of the system theory

System:- An integration of constituents/ parts or sub system working harmoniously
in a interdependent relationship, interacting with internal and external environment
to achieve a predetermined objective, system try to synergize its elements by way of
efficient coordination so that it can perform in the best possible manner.
Sub System:- A part of the overall system which also acts as a system in itself, e.g.
a functional departmental of the organisation can be seen as a part of the organisation
system and can also be considered a system in itself. So we can different systems like
goal sub system, technical sub system, structural sub system, managerial sub system,
psychological sub system.
Synergy:- Synergy means the effect of system is more as compared to the sum
total effect of its constituent elements. If the different activities and sub systems of the
organisation are coordinated well then only synergy can be achieved and this is the
challenge which the management face.
Classification of the system: - The system can be open, closed or semi

permeable, open system is a system which interacts with the environment outside it, in
a closed system it do not interact with the external environment, semi permeable is a
system which allows only selective interaction with the external environment.
System Boundary:- A barrier which separates the system and its constituents from
the external environment. Boundary allows or disallows the system to interact with the
external environment and also distinguish the system from the environment as a whole.
Process and Flow – A system is formed to achieve desired objectives and for it
the system require some inputs and transform it in to the out puts, any activity within
a system which require an input and transformed into an output is known as process,

system is also a process which is an integration of so many interlinked sub processes.
Any system is dynamic which means there is movement or flow in the system, this flow Notes
is of the various materials, information or communication, finance etc. if these flows are
not maintained appropriately then system will fail to perform.
Feedback Mechanism:- Every system has a mechanism of feedback and feed

forward. This mechanism is required to begin and end a process, to monitor and
evaluate whether the things are going as planned and to find out the status of overall
functioning of system.
The system theory of management is one step further to all the previous theories of
management, it envisaged the overall organisation and all its activities as one entity, it
emphasized the interrelations and interdependencies of each part of the organisation in
the success. This theory conceptualized the ideas focusing only on one component will
not lead to success; the manager should consider the effects their decisions will carry
on the entire system even when a single element of the system is related.
System theory compiled the scientific management theory, administrative theory and
the human relation theory in one.
Modern Organisation Theory

Modern organisation theory is integration of the different management theories so as
to combine the valuable concepts of all in to one, the management organisation theory
have the points
System View of the organisation:- The organisation is considered as a system which

is open to its environment, it receives inputs from the environment and process it to relevant
outputs in the form of products or services. The organisation not only got effected but also
effects the environment in which it operates. So the main aim of the organisation is to make
a suitable fit between itself and the environment in which it operates.
Adaptive and Dynamic:- The modern organisation theory emphasize adaptive

and dynamic nature of organisation, according to this organisation need to be dynamic
I.e. should be flexible to change to suit the environment and can adapt these changes
quickly to perform better in business.
Multilevel and multidimensional:- The theory encompass the micro and

macro aspects of the organisation, it not only see organisation and its components
as a system it also view organisation as sub system of the environment as a social,
economical and business entity of the industry, nation or society.
Multidisciplinary:- The modern organisation theory is multidisciplinary in nature

as it draws its concept from various disciplines like psychology, economics, sociology,
engineering, anthropology etc. The major focus is on dealing with situations by way of
study and research from numerous disciplines.
Motivation:- The theory accepts to the fact that each individual has different sets of
needs which motivate him, the behavior is the outcome of so many different factors and
we have to deal with them differently.
Descriptive and probabilistic in nature:- The theory only describe how the
management is done it doesn’t tell the ways to manage, it means it is only giving a
description and not prescribing any ways as it depends on probabilities or chances of
happening a certain outcome, according to this theory we can only give probabilistic
view about the system’s outcome, we can not predict in absolute terms.

2
Integrative:- The theory integrates all the important areas and concepts of
Notes management theory.
Summary
The management can be defined as a continuous process of achieving
predetermined targets by utilizing the scarce available resources in effective and
efficient manner. Management can also be defined as group or team of people who
carry out various activities of managing the organisation. Management is considered
as art as well as science as it has the characteristics of both, because every manager
can use his own insights and decision making to run the business whereas it also
follow some fundamental theories and concepts. The management is goal oriented,
social, universal and continuous process which integrates the resources and efforts of
the organisation in achievement of its objectives. Management is a discipline and act
according to the requirement of the changing environment, relies on the relationships
and authority and employs the resources to get best results. The major objectives of
management is to achieve organisations objective through judicious and optimal use
of resources so as to create wealth for its stakeholders, the other objectives of the
organisation to justify its presence in the market place and being a social entity deliver
benefits to the society at large by not only bringing safe and secure products in the
market but also creating better employment opportunities and achieving the social
responsibility targets.
Management involves steps of planning, organising, staffing, directing and

controlling activities & requires skills like conceptual skills, leadership qualities, decision
making skills etc. management based on the functions and the responsibilities can be
classified as Top Management Level, Include the Board of Director, Chairman, Chief
Executive Officer, Managing Directors, etc. Middle Management Level, Include Head of
Business Units, Department Heads, Functional Heads, Division Heads etc Lower Level
Management, Operational Heads, Supervisors, Front line Managers etc.
The management process evolved from the scientific management concept

of Frederick W Taylor who had given the ideas of planning the work in a systematic
and scientific manner and promoted the ideas of one best method to perform a task,
to the Henry Fayol’s principles of management, where he detailed about principles
organisation should follow in making the management more efficient.
Neo classical approach in management begin with the Elton Mayo’s Hawthrone
Experiments where he found that there is significant improvement in the performance of
people with attention being given to them by the management and with more freedom
at work place also helps in improvement. Such results shifted the focus of management
that people involvement and role is of importance in the management of organisation,
later on with behavioral experts contributions like The contributions of Burrhus F.
Skinner, Abraham H. Maslow and Douglas McGregor,F. Fiedler, V. Vroom, F. Hertzberg,
E. Locke, D. McClelland, R. Hackman, J. Pfeffer, K. Thomas and C. Perrow resulted in
the development of management theory. They emphasized on the role of behavior and
the possibilities of changing the individual behavior through concepts like reinforcement
theories of Skinner and the Social learning theory of Bandura. Currently the systematic
theory of management is more relevant which is based on the integration of all the
elements of management concepts and analyze the organisation as a single system in
which people and non people factors act together to achieve a desired goals.
Check Your Progress

1. Steps of management are in following sequence.
a) Organising, staffing, directing, planning

b) Planning, organising, directing, controlling, staffing
Notes
c) Planning, organising, staffing, directing, controlling
d) Staffing, directing, planning, controlling, organising
2. F W Taylor promoted the concept of scientific management which is a
a) concept of management where the work is done by emphasizing on

specialization to increase efficiency
b) Concept of management where the people skills and their motivation drivers
are used to increase the efficiency.
c) Concept of management where participation between worker and management

is the key driver for the efficiency.
d) Concept of management where full liberty is given to worker so that there will
be less supervision resulting into efficiency.
3. The Hawthorne experiment proved that
a) The increase in light in work place result in to increased productivity
b) If you allow the worker to talk more there will be increase in productivity
c) The productivity increased due to special attention and participation of worker

in decision making.
d) The productivity increased due to the close supervision.
4. According to Frederick W Taylor’s Scientific Management system
a) There is no one best method of doing things hence let the worker select the
method of doing things
b) There is one best method of doing things and so the tasks should be
standardized so that suitable worker can be matched with the standard method.
c) There is one best method of doing things and management should apply carrot
and stick approach to make worker understand that this method should be
adopted by them
d) None of the above is correct.
5. According to system approach to organisation
a) Organisation is a system of integrated components which is interdependent and

interrelated with each other for its functioning.
b) Organisation can be understood with the help of computerized systems.
c) Organisation is a closed system where outside environment has limited effect.
d) All the above are correct.

4
6. According to modern organisational theory approach
Notes
a) Organisation is a rigid group of people trying to change according to the
changing business environment
b) Organisation is integrated system which is flexible in its functioning, which

adopts to different management system as per the requirement of business.
c) Organisation is teams of people who are trying to achieve personal targets

through the organisational settings.
d) Organisation is system which interacts with its environment.
Questions & Exercise

1. What do you understand by the term management, explain its various functions an
objective.
2. Explain the essential steps of management?
3. Explain what contribution Mayo had made in developing management thinking?
4. Visit any organisation and meet with a manager and make out a list of different
responsibilities and functions he has to perform during his work.
5. Explain the contribution of F W Taylor in further development of management theory
For Further Readings

1. Human Relations and Organisational Behaviour, Mr. R.S. Dwivedi
2. Organisational Behaviour, Mr. Sanjay Srivastav
3. Essentials of Management, H. Koontz
4. Principles and Practices of Management : Bakshi
5. Barat, N. 1998, Emerging issues in Management, Excel Books, India.
6. Greenberg, J. & Baron, R.A. 1993, Behaviors in Organisations, Allyn and Bacon,
Boston.

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Management Functions & Behaviour 5

Unit- I: Nature of Management, Evolution of Notes

 The evolution of different management theories.

1.1 Concept, Nature, Scope and Functions of Management

“Management is that process by which managers create, direct, maintain, and

“Management is a social and technical process which utilises resources, influences

“Management is the process of planning, organising, actuating, and controlling an

‘To manage is to forecast and plan, to organize, to command, to coordinate and to

Management is distinct process consisting of Planning, Organising actuating, and

So we can say that the management is

 A continuous activity and not a one shot activity;

 Management has no meaning until we do not have specific targets to be achieved;

 We can use only resources available to us and they are limited;

 The results of management are better if we maintain efficiency and effectiveness;

 Even if resources available are equitable or even less as compared to others a

 Management can be applied in all the areas of organisation like finance

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A manager is a person who performs the managerial functions of planning,

So we can interpret three different understanding from the term management

Is Management an Art of Getting Things Done Through Other People?

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Now let’s analyze this in light of following points:

 Secondly employees are only treated as mere means to attain organisational

Nature, Scope and Charactaritics of Management

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 Management is a distinct and universal process. Management is a distinct

 Management is a continuous process. The management is a continuous process

 Management is an integrative process. The management integrates the available

 Management is intangible. Management is intangible as it is not seen as a thing

 Management is contingent. Management is contingent as there is no best way of

 Management is multi-disciplinary. Management techniques, principles and

 Management is a dynamic function. Management is a dynamic function of any

 Management is system of authority:- Management is distribution and use of

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 Management is both a Science and an Art. Management has an organized body

 Management is all pervasive. Management function is all pervasive which means

 Management is for economic resource management is a factor of production like

Objectives of the Management

 Efficiency:- The management objective can be to increase efficiency by improving

 Optimization of Resource Utilization:- management may set a target to reduce

 Quality Assurance and enhancement:- The objectives can be to establish

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Relations with Suppliers. Management attempts to achieve good relations

 Better Working Conditions. Management seeks to ensure better quality of work

Planning Organising Staffing Leading Controlling

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 Supervision- Implies overseeing the work of subordinates by their superiors. It is

 Leadership- May be defined as a process by which manager guides and influences

 Communications- Is the process of passing information, experience, opinion etc

a. Establishment of standard performance: - Defining a parameter on which

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Controlling skills:- Ability to implement effective monitoring mechanism on the

Technical skills:- Ability to use the tools, procedures, or techniques of a specialized

Analytical Skills:-These refer to abilities to proceed in a logical, step-by-step and

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1.2 Levels of Management

The hierarchy of management positions from top to bottom is called levels of

Middle Management Level: - Include Head of Business Units, Department Heads,

Lower Level Management:- Operational Heads, Supervisors, Front line Managers

 To formulate the vision and mission for the company

 To lay down policies and objective of the organisation

 To formulate rules and regulations for the functioning of the organisation

 To formulate long term goals and strategy planning

 Resource allocation for functioning of the organisation