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In this chapter we will be studying:

Introduction Definition Nature Characteristics Management Art or Science Management as a profession Types and Levels of Management Administration Vs Management Skills of Managers Roles of Management

Introduction : Management is as old as human civilization. Universal necessity in organisation. Definitions: Management is a multipurpose organ that manages a business, manages manager and manages worker and works. Peter Drucker Management is knowing exactly what you want men to do and then seeing that they do it in the best and cheap way. F W.Taylor Management is the process consisting of planning, organsing, activating and controlling performance to determine and accomplish the objectives by the use of human beings and other resources George Terry.

Nature of Management:

Concept is universal and dynamic

It has developed in different dimensions and today it is regarded as a specialised discipline

The aim of all managers is the same: to create surplus. Characteristics of Management: Multidisciplinary It is a group activity It is a goal oriented Is a factor of production Is universal in nature


Is a social process Is a system of authority Is a dynamic function Is an art and science Is a profession Is an intangible force Is situational Influences behaviour Is an integrative force Balances effectiveness and efficiency


Functional Areas of Management: Production Management Marketing Management Financial Management Personnel/Human Resource Management Materials Management Office Management Is Management ART or SCIENCE: Management is the oldest of Art and youngest of science


Management as an Art: Systematic application of skill( or Knowledge in accomplishment of result) Practical and is concerned with creation of something Identifies ways of doing specific things and indicates how an objective is to be achieved. Essential features of art: Personal skill Practical knowledge

Result-oriented approach
Regular practice creativity

Management as a Science:
Systematic application of knowledge, uses scientific methods for establishing relationships between cause and effect. Based on continued observation Universal application. Creates cause and effect relationship[ Validity and predictability.

Management as a Profession:
Occupation backed up with specialized knowledge and training Formal method of training

Establishment of representative organization.

Ethical code of conduct Reasonable remuneration

Levels of Management

Top Level Management

Middle Level Management

Lower Level Management

Management Functions



Management Functions
Controlling Leading

Management Functions (contd)

Management Functions (contd)

Management Functions (contd)

Process / Functions of Management Planning : involves selecting missions and objectives as well as the actions to achieve them, which requires decision making. Organising: Establishing an intentional structure of roles for people to fill in an organisation. it also prescribes Formal relationships among people and resources to accomplish the goals/objectives. Staffing: involves Filling, and keeping filled , the positions in the orgn structure. Activities aimed at attracting and selecting individuals for positions to facilitate the achievement of orgl goals. Leading: is influencing people so that they well contribute to the organisational and group goals. Factors influencing Leading are Motivation, Communication, Group dynamics, Synergism or synergy, Power, Politics and Corporate culture.

Process / Functions of Management


Controling: is measuring and correcting individual and organsiational performanmce to ensure that events conform to plans. Ie comparing actual performance with standards and taking necessary corrective action if required.

Coordination, the essence of Managership: for achieving harmony among individuals efforts towards the accomplishment of group goals.

Each function contributes to coordination.

Administration Vs Management
It is concerned with the determination of objectives and policies It takes major decisions and is wider term than management Function of top mgmt Consists of owners of the enterprise General term used in government, military educational and regional organisation. Decisions are influences by external factor-political, legal and social etc.

Is concerned with implementation of plans and policies Decisions are taken within the framework of administration Lower level management function. Consists of managerial personnel/specialists Used in business firms which have economic motives Decisions are influenced by internal factors like values, beliefs, opinions, culture etc.

Mintzbergs Managerial Roles



Mintzbergs Managerial Roles (contd)



Mintzbergs Managerial Roles (contd)



Management Skills

Managerial skills-Levels of management

Conceptual and Decision-making skills

Human Skills

Technical Skills

Evolution of Management Thought

Even though it is said that Management is as old as civilization and management dated back to around 5000 BC (sumerian civilisation) and around 3000BC(Egyptian civilization), the real management thought evolved after the industrial revolution in Great Britain during the period 1750 t0 1850.

The agricultural economy was changed to an industrial economy in Britain Technology development and firms began to increase their output to cope up with the demands of consumer goods of a rapidly growing population. Increased mechanization and increase in size of the manufacturing units( to facilitate mass production) led demand for hierarchical system of management Mass production techniques evolved during 1900 to 1930s. In post industrial era (from mid 1950s) many advancements in technology such as computerization and automation, nuclear poser, growth of electronic industries etc..

Development of Management Thought

Classical School
Assumption: people are rational

Behavioral School
As: People are social and self actualizing. Robert Owen, Elton Mayo, Maslow's, McGregor

Quantitative School
As: People can use applied maths Mgmt science, operations research, MIS

Scientific Mgmt School

Charles Babbage, Gilbreths, Gantt, Emerson

Organisation School
Henry Fayol, Weber, Mooney & Reily, Bernard Simon

Integration School
As: There is no one best way to manage contingency theory , systems theory

Contemporary school
As: People are complex Global Perspective, Theory Z, McKinsey 7S,& Productivity.

Classical School of Management thought: emerged in the late 1800s and early 1900s)
The Scientific Management School: F.W.Taylor-Father of Scientific Mgmt(1792-1871)

Principles of F.W.Taylor: 1. Scientifically select each element of an individuals task and develop the best method for performing the task. This replaces the old rule-of-thumb method. 2. Carefully select workers and train them to perform the task by using the scientifically developed method. 3. Cooperate fully with the workers to ensure that they use the proper method. 4. Divide the work and responsibility so that management is responsible for planning work methods using scientific principles and workers are responsible for executing the work accordingly.
Followers of F.W.Taylor: Charles Babbage- 1792 1871- specialization of labour and time study Frank And Lilian Gilbreths(1868-1924)- Time and motion study.- Therbligs Henry Gantt- (1861-1919)-Gant chart-modern project planning and control techniques

The Organisation School

Henry Fayol- (1841-1925)-Father of Administrative management) According to Fayol , all Managerial tasks could be classified under Six headings: i)Technical, ii)Commercial,iii)Financial, iv)Security, v)Accounting and vi)Managerial. He developed 14 Principles of Management

Fayols principles of Management

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. Division of Work Authority Discipline Unity of command Unity of Direction Subordination of individual interest to general interest Remuneration Centralisation Scalar chain Order Equity Stability of tenure of personnel Initiative Espirit de corps.

Other contributors or followers of Henry Fayol:

Max Weber(1864-1920): Bureaucratic model of organisation called as Webers Ideal Bureaucracy. Principles: Division of Labour Authority Hierarchy Formal Selection Career Orientation Formal rules and controls Impersonality Chester Bernard: the functions of executives Herbert simon: bounded rationality Mooney & Reillly: coordination, Scalar chain, functional distinctions

Behavioral Management School

Elton Mayo(1880-1949): Hawthorne Studies at Western Electric company.- Experiment conducted by focusing on two groups of workers. Hawthorne effect- The productivity increased by providing better working conditions, motivation, rest periods, due to improvement in the group morale. Robert Owen(1771-1858): Hugo Muntsberg(1863-1916). Mary Parker Follet(1868-19333): employee empowerment, cross functional work team, and participative management.

The Human Relations Movement: Abraham Maslow(1908 -1970)- Hierarchy of needs theory. Douglas Mc Groegor(1906-1964)- Theory X and Theory Y.

1. Maslows Need Hierarchy Theory

Self Actualization needs

Esteem/Status/Ego- Satisfction needs

Belonging/Love/affection/social needs

Safety and Security Needs

Physiological needs/Basic needs

Maslows Need Hierarchy Theory





Physiological Needs: These needs are most basic physical needs of human beings such as food, water, clothing, shelter, and other physical requirements. Safety and security needs: When physical needs are adequately met, the next higher level of needs assume importance. Safety and security needs include needs for security and proetection from Physical and emotional harm. Need for safe and secure environment in work place. Social needs: These are also known as belongingness needs they include need for love, affection. Esteem needs: represent a persons needs for intrnal factors such as self respect, autonomy, and achivement. External factors like staus, power, recognition, and attention. Self-actualisation: desire to bcome more and more what one is, to become everything one is capable of becoming. This means individual will realise fully the potentialities of his or her talents and capabilities. These needs include self fulfillment and competency. Personal growth, development and self-respect.

MC Gregors Theory X and Theory Y

Philosophy of Human nature Emphasized the importance of understanding the relationship between motivation and the managers philosophy of human nature. Based on certain set of assumptions about employees

MC Gregors Theory X & Theory Y

Traditional view was names as: Theory X The assumptions that people dislike work and responsibility and creative ability and mainly want security and money. Alternate theory: Theory Y the assumption that expending physical and mental effort is natural, that people can be selfdirected if achievement brings rewards, and that most can exercise imagination, ingenuity and creativity and learn to seek responsibility.

MC Gregors Theory X & Theory Y

Theory X
The average person inherently dislikes work and will avoid it if possible. Most employees must be coerced, directed, closely supervised and threatened with punishment to get them perform effectively. The average person lacks ambition, avoids responsibility and seeks job security and economic rewards about everything else. Most people lack creativity ability and are resistant to change Since most people are selfcentered, they are not concerned with the objective of th organisation.

Theory Y

The Expenditure of physical and mental effort in work is as natural as play or rest. Most people prefer to exercise selfdirection and self-control if they are committed to the achievement of objectives. Commitment to objectives is a function of the rewards associated with achievement. People learn, under proper conditions, not only to accept but also to seek responsibility. People want job security but also have other needs such as esteem or ego-satisfaction and also the need for self-actualization. People are interested in displaying imagination, ingenuity, and creativity to solve organisational problems.

Quantitative Management School

Management science approach- is the science devoted for describing, understanding & predicting the behavior of complicated system of men& machine operating in natural environment. Mainly provides managers with quantitative basis for decision making Developed after world war II

3 Major Applications:
Management science or Operations Research: Development of mathematical models for decision making. Operations Management: Application of quantitative methods to the organisation task of production & operations control. MIS: is a set of integrated programs for collection, analysis & dissemination of information to support mgmt decision making.

Integration School of Mgmt Thought

Attempts to integrate the 3 approaches to mgmt It resulted in 1.)System approach 2.)Contingency approach System Approach to Mgmt: Organisation is viewed as a total system with each part. Importance of System approach: Ability of the manager to think taking into account vast amount of knowledge that is evolving Development of a framework to relate one subsystem with another Ability of the manager to focus beyond routine in-house operations & understand how the firm relates to its super-ordinate system.

Contingency Approach: View point that argues that appropriate managerial action depends on a particular set of parameters of the situation.

Contemporary School of Management:

Global Perspective: Theory Z: Combination of American and Japanese mgmt approaches proposed by William Ouchi. Characteristics: Long-time employment Consensual decision making Group responsibility Increasing quality Broader career path Holistic concern Establishing gradual advancement policies.

Mckinsey 7-S Model

Strategy Structure Systems Staff Style Skills Shared-values

Continuing management themes

Quality and performance excellence:
ISO-series, TQM, Re-engineering, Kaizen.

Global awareness:
Culture, managing work-force diversity

Learning organization Characteristics of 21st century Executives

Social responsibility of managers:

Also known as Corporate Social Responsibility: It is the obligation of managers to take actions that protect and improve the welfare of the society along with their own interest. Social Responsiveness: the ability of the corporation to relate its operation and policies to the social environment in ways that mutually beneficial to the company and to society.

Arguments for and Against CSR

For: Changed public expectation Better environment for business Balance power and responsibility. Business has resources Prevention is better Moral responsibility Globalization Better employees Against: Profit maximization Society has to pay the cost Lack of social skills Business has power Social overhead cost Lack of accountability Lack of broad support Experts views

Pressures Leading To Social Responsibility

Shareholder/Inves tor pressures Philanthropic Requests and Initiatives Government Programs Corporate Social Responsibility Programs Community Forces

Environment Concerns


Competitive Advantage

Limits of Social Responsibility

Cost Efficiency

Social Responsibility



Learning Organization
In the competitive environment of the present millennium, only a learning organization will survive. A learning organization is understood as the one that has developed the capacity to adopt and change. Learning organizations, like individuals, constantly learn. In a learning organization, old shibboleth are demolished and a new order is created a new order that not only encourages managers to look at their people differently. But actually teaches them to look at the world afresh.

Characteristics of the Learning Organizations

System thinking. Personal mastery. Mental models. Building shared vision. Team learning.

Need for Learning Organization

Learning organization is essential because Only it can survive tomorrows knowledge-based economy. Only it can manage tomorrows intense global competition. Only it can cope with tomorrows rapid fire technological changes. Only it can handle tomorrows demanding and fragmented market. Only it can build a people based work system in a company.

Characteristics of 21st century Executives

Two professors at Columbia University's Graduate School of Business, Donald C. Hambrick and James W. Fredrickson, have just polled top managers both in the United States and abroad. The study, titled ''21st Century Report,' The content are: Breadth of training is important for the C.E.O. of the year 2000 in functions like marketing, finance, production and human resource management, Also, many of the 1,500 top executives polled indicated that it was important for a future chief executive officer to have ''experience in diverse businesses'' as well as some work abroad Executives who perceive international operations as shelves for second-rate managers are unsuited for the year 2000, or indeed for managerial jobs today.''

Innovation is a key element of staying ahead of the game and business leaders who are able to mobilise the energies and passions of their workforces will be the ones that succeed. The term smart working has in recent years been associated with flexible and mobile working, that is anytime, anywhere ways of working enabled by communication technologies. Business thinker Gary Hamel proposed that three of the most pressing challenges facing businesses today are: adapting to the pace of change, making innovation everyones job and creating highly engaging work environments that inspire people to give the best of themselves.

Social computing and collaborative communication technologies are creating immense possibilities for stimulating and harnessing collective intelligence within and beyond organizational boundaries. As the world changes, there are calls for management re-invention and claims of new paradigms emerging. *****************