PGDRM&PGDBM SEMESTER I

PRINCIPLES OF MANAGEMENT
TOTAL NUMBER OF HOURS TOTAL NUMBER OF SESSIONS [2 HOURS] 50 25

DEVELOPMENT OF MANAGEMENT THOUGHT

[ 2 HOURS / I SESSION ]
INTRODUCTION. Henry Fayol 1841-1925 Fayol was a French industrialist pioneered principles of management in French(1916). Translated in English in 1949 concentrated on top management. Six functions Qualities of manager Physical Mental Moral General education Special knowledge Experience -

Principle of management Division of work Authority and responsibility Discipline Unity of command / direction Subordination of individual for group interests Remuneration Scalar chain Stability of tenure FREDRICK TAYLOR 1856-1916 Father of scientific management. Philosophy of scientific training and selection. Effectiveness and hygiene factors. Principle of Scientific Management Science not thumb rule. Harmony in group action Cooperation Maximum output Improvement of workers

Features of Scientific management Separation of planning and execution functions Scientific goal setting Work / method study Time motion study Contribution of Taylor Scientific application Duty of management Time motion, work study Separation of planning and executive functions Criticism Mental and physical health Ignored Concentrate on productivity only. Studies on time motion not scientific PETER DRUCKKER Introduction of concept of objectives of management. Impact of scientific approach on human resource. Contribution of PETER DRUCKKER Nature of management Functions of management Management by objectives

MAXWEBER BUREAUCRACY
CHARECTERISTICS : Functional specialization Hierarchy of authority Rules and regulations Rights and duties Interpersonal relationship ADVANTAGES - DISADVANTAGES

MAYO Depersonalized work for productivity. Hawthorne experiments 1924-1932. objective to find out behaviors and attitudes of employee related to working conditions.
Four Experiments : Illumination experiment 1924-1927. Relay Assembly test room 1927-1928. Mass interview program. Bank wiring observation room 1931-1932.

Findings Social factors Group influence Production level Motivation Conflict Supervision

DEVELOPMENT OF MANAGEMENT THOUGHT

Henry Fayol 1841-1925 Fayol was a French industrialist pioneered principles of management in French(1916). Translated in English in 1949 concentrated on top management.

DEVELOPMENT OF MANAGEMENT THOUGHT

Six functions Technical activities related to production. Commercial activities. Relating to purchase of basic raw materials, other resources selling product in exchange. Financial activities, identification and utilization of available funds. Security of materials, property, personnel. Accounting cost sheets related to planning organizing commanding coordinating and controlling.

Fayol believed successful functioning of any business depends on performance of above functions. Commanding is direction means guiding and supervision of subordinates to achieve specified goals or objectives.

QUALITIES OF MANAGER
Physical -Health, vigor, address. Mental - Ability to understand, learn, mental vigor, adaptable. Moral - Energy, firmness, willingness to accept responsibilities, initiative loyalty. General education - Knowledge not specific to job. Special knowledge - Job related skills and abilities. Experience -

PRINCIPLES OF MANAGEMENT
Division of work Creates specialization due to perfection. Avoids waste of time and effort. Applied to technical and managerial type of work. Authority and responsibility Position inherent with authority and responsibility. Essential for performance of jobs. Discipline Essential at all levels of management people. Obtained through judicial application of penalties.
Cont...

Unity of command / direction Subordinate only one level of direct command. Ensures unambiguity. Business activities grouped on functional basis. Manager designated for same responsible for the specific functions. Subordination of individual for group interests Conflict between on and organisations interests. Fayol desired reconciliation of the two for success. Remuneration Fair and equitable wages based on work. As per prevailing conditions.
Cont...

Scalar chain Chain of superior ranging from top to bottom along which communication flows. Stability of tenure Job security ensures continuity. Decreases admin expenses. Creates favorable environment.

FREDRICK TAYLOR 1856-1916

Taylor called father of scientific management. Consists of philosophy of scientific selection and training right worker for right job, providing adequate working conditions, remuneration is managers responsibility. . Placed according to qualification and experience. Also, effective work depends on hygiene factors and conditions of place of work. Taylor believed objective of management should be maximum prosperity for employers and employees.

PRINCIPLES OF SCIENTIFIC MANAGEMENT

Science not rule of thumb Nature of work performed by each clearly determined. Includes allotment of work standardization adoption of differential piece rate payment. Harmony in group action Avoidance of dissatisfaction in group activity. Achieved through scientific selection, training and strategic placing of workers. Cooperation Mutual confidence and trust. Cooperation, coexistence and mutual benefits change in thinking.

Maximum output Achieved through division of work and assumption of responsibility by management and workers jointly. maximum output results in increasing profit and incentives. Achieved through qualified personal and standardized equipment and machinery. Improvement of workers All employees given opportunity to improve to their maximum potential. Necessary for development of organization. Workers scientifically selected and trained so that physical, skills, psychological profit is utilized for placement.

FEATURE OF SCIENTIFIC MANAGEMENT

Separating of planning and execution Functions Practice planning and execution combined therefore worker did both. Simultaneously do work under supervisor resulting in disagreement. Taylor emphasized planning performed by supervisors execution by workers. Scientific task setting Allotment of work on basis of average functioning and normal conditions. Coined this as fair days work

Work / method study Work study refers to systematic critical assessment of efficiency required to do the job varies job to job. Under method study entire process of production taken in to account. Efforts to improve materials, transportation, best tools and machinery is initiated. Motion study / time study Study of movement of operator while performing its duty on the machine. Eliminate unnecessary movement of operator. Time required job performed more efficiently. Standard time fixed for easy control.

Contributions of Taylor Applied principles of scientific management to solve problems of management. Duty of management to convey expectations of job. Time, motion, work study. separated planning from executing functions.

Criticism of scientific management Workers expected to achieve maximum output without considering physical and mental health. Emphasis only on production management less weight age to financial, scales etc. Argued that time work, motion study was not scientifically measured. Standardization led to planning and execution led to additional manpower. Wages as per piece rate only benefits experienced workers. Workers treated as irresponsible as working under supervision and control.

PETER DRUCKER
Concept of management and its objectives introduced by Drucker. Criticized scientific management and human resource approach. According to him management is not an exact science.

CONTRIBUTIONS
Nature of management Basic objective is innovative includes developing new ideas adopted from other fields Management treated both as a discipline tool. and professional importance only to production.

Functions of management Starting point of any institution. Does not have any functions of its own. Existence functions of management same as that of a manager. Manager has to determine objectivities and activities, concerned with directing and control.

Organization structure Effective structure has following basis characteristics : Framed to ensure smooth functioning. Minimum number of managerial levels. Providing a chance to test ability of young people accepting responsibility.

Centralized control with structure of decentralization Top management has more powers. Decisions regarding departments taken by both. Departments allowed within specified limits.

Management by objectives (MBO) Introduced by Drucker in 1954 modified later by Schley termed management by results. Method of planning, setting standards, performance appraisal, motivation are components of MBO.

Dynamic organisations Visualized rapid changes in technology human being should develop attitude to face change. Done by developing dynamic organisations to absorb changes.

MAXWEBER
BUREAUCRACY Characteristics Functional specialization : Division of labor. Each part of work assigned to a different person specialized at the type of work. High degree of functional specialization. Hierarchy of authority : Rules and regulations : Rights and duties : Impersonal relationship : Reward based on efficiency. Personal relations no status. Clear functional relationship.

Advantages Specialization optimum utilization of resources. Time management. Structure ensures smooth functioning. Succession of command clear job not person important.

Disadvantage Rigidity, no flexibility, initiative and creativity discouraged with compliance syndrome. Empire building due to hierarchy of chain. Goals not clear each concentrated in own sphere of activity.

MAYO HAWTHORNE EXPERIMENTS

Industrialization depersonalized work relationship between exploitation. Employee sacrificed for productivity. Led to exploitation without concern for psychological needs. Mayo carried out series of experiments from 19241932 called Hawthorne named after the plant manufacturing tele bell system. Objective to find out behaviors and attitudes of employees under better working conditions. Even though employees derived job satisfaction desired productivity was not achieved. Prof Mayo and associates carried out four experiment.

ILLUMINATION EXPERIMENTS (1924-27)

Determine effect of change of lighting on productivity, assumption that better lighting enhanced productivity. Experiment group tested with variations in lighting and control group worked under same conditions. Established no relationship between productivity and lighting. Production decreased when below normal limit. Meant improved working conditions had no effect but informal social relations increased productivity.

RELAY ASSEMBLY TEST ROOM EXPERIMENTS (1927-28)

Conducted to determine effect of changes in working conditions and productivity. Under this experiment groups of six girls were formed with an observer. work in a natural way, no supervision. Changes in working conditions was initiated in five phases each after four to twelve weeks and productivity analyzed.

Stages of changes and effect were Phase-1: Incentive scheme introduced productivity increased slightly. Phase-2: Rest timings increased gradually productivity also increased. Phase-3: Free snacks during rest productivity increased. Phase-4: Snacks with drawn but frequency of rest increased productivity fell due to breaks not snacks . Phase-5: All facilities with drawn including rests interestingly productivity increased 30%

As when changes introduced absenteeism decreased morale restored. Mayo concluded that work satisfaction depends a lot on informal social network in groups. Cooperation and high output nullify physical conditions

MASS INTERVIEW PROGRAMMER

Nearly 20,000 employees interviewed to determine attitudes towards company, supervision, promotion, wages. Initially structured but gradually became informal. Findings were : Supervisors aware of what was expected. Male workers more economically oriented. Many problems of worker management were due to emotional attitudes not objectives / difficulties. Individuals behavior influenced by group behavior. Satisfaction / dissatisfaction due to social status and expected social rewards. According to Mayo workers activated by logic or sentiment, management concerned with productivity, cost efficiency, conflict inevitable.

Bank wiring observation room experiments-1931-32

Objective to analyze how a group could influence a worker to restrict his output even with attractive incentive schemes. Hourly rate of wages, group bonus on basis of average group performance, assumed more production. Targets decided by workers whilst company target was more. Workers failed to achieve targets due to : Fear of unemployment. Bias to higher standards. Protection of slow workers. Satisfaction of management with low production.

Informal relations responsible for deciding behavior. Counseling helps in resolving conflicts. Existence of informal group common to all organisations. Groups performance despite incentive did not improve due to social pressures.

FINDINGS OF HAWTHORNE EXPERIMENTS

Hawthorne experiments opened new vistas in human behavior identified factors responsible for motivating workers : Social factors : Social factors responsible is a social group basically. Socio psychological characteristics determine output level and efficiency. Financial incentives may play a limited role in motivating. Conversely non financial incentives may affect behavior significantly and productivity.

Group influence : Workers create informal groups to over come short comings of formal relationships. Such groups determine norms of group behavior. Management cannot deal with worker independently. Production level : Decided by social norms not physiological capacities. No direct relationship between production level and working condition e.g. production unaffected due to lighting. Motivation : Monetary benefits not sole criteria for motivation. Esteem needs recognition.

Conflict : Arise out of conflicting objectives between management and workers. Leadership : . Ineffective if superimposed e.g. wire room experiment. Style important. Supervision : Attitude of supervisor affects rate of output. In Hawthorne supervisors friendliness or non interference negated ill effects on production.

CRITICISM OF HAWTHORNE EXPERIMENT

Derecognizing of class consciousness responsible for productivity. Pro-management bias as Mayo concluded management to be logical, worker emotion driven. Experiments not conducted scientifically workers not selected scientifically also clinical bias. Limited scope undue importance to observation no validity tests out. Undue importance to satisfaction. Experiment established no direct impact.

QUESTIONS
Give a brief summary on development of management thought till to date. Distinguish between scientific management and human relations school. What are the contributions made by Henry Fayol compare with contributions made by Taylor ? Hawthorne experiments were conducted by Elton Mayo and his associates. Discuss the objectives, describe the experiments and finding. What were the criticisms against the experiments ? Drucker introduced human element in management to management thought. Discuss the relevance in the context of knowledge worker and globalization.