Management Principles and Application
Notes
B.Com Notes (CBCS Pattern)
Unit 1: Introduction to Management and
Development of Management Thoughts
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Table of Contents |
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1. Meaning and Nature of Management 2. Scope or Branches of Management 3. Functions of Management 4. Objectives and Importance of
Management 5. Levels of Management – Meaning,
Role and Difference 6. Management Principles 7. Contribution of FW Taylor –
Scientific Management 8. Contribution of Henry Fayol – 14 Principles
of Management 9. Difference between FW Taylor’s
and Henry Fayol’s Contribution 10. Development of Management
Thoughts – Classical and Neo Classical Approach 11. Concept of Co-ordination |
Management - Introduction
Management
is the coordination of all resources through the process of planning,
organising, directing, staffing and controlling in order to attain stated
objectives effectively and efficiently.
Effectively means doing the right task, completing activities and
achieving goals and efficiently means to attain objectives with least amount of
resources at a minimum cost. This
process starts at the top and continues in more or less degree at every level
of the organisation.
According
to Harold Koontz, “Management is an art of getting things done through others
and with formally organised groups."
According
to F.W. Taylor, “Management is an art of knowing what do you want to do and
then seeing that is is done in the best and cheapest way.”
According
to Henry Fayol, “To manage is to forecast, to plan, to organize, to command to
co-ordinate and control.
George
R. Terry, “Management is a distinct process consisting of planning, organising,
actuating and controlling performance t determine and accomplish the objectives
by the use of people and resources,”
Thus
management may be defined as a process including various activities like
planning, organising , directing, controlling
co-ordination etc in order to make optimum use of men machinery, materials
and money by way of preparing plans, policies and purposes, for achieving
organisational goals under healthy internal environment.
Nature or characteristics of Management:
On
the basis of critical analysis of
various definitions of management, the main features of management may
be stated as follows :
a) Management is a process:
Management is a continuous activity which aims at making optimum use of the
available resources like men, machinery, materials, and money, for achieving
organisational goals.
b) Management deals with several functions:
Management includes several functions such as planning, organising, staffing,
directing co-ordinating, controlling, motivating or actuating, controlling,
decision making, leadership and communication.
c) Management is goal oriented: Every
management activity is directed towards achieving predetermined objectives of
the organiation.
d) Management is a group of organized activities:
Management plans, organizes, co-ordinates, directs and controls the group
efforts so as to achieve organisational goals efficiently and effectively.
e) Management is basically a factor of
production: The factors of production include land, labour, capital and
entrepreneurs. A manager or entrepreneur
mobilizes resources like land, labour and capital to produce’ output to satisfy
needs of the society and earn profit.
f) Management is a discipline: Management
, although borrows several concept for other social sciences, it has developed
its own body of principles and theories so as to become a special discipline or
subject of study for potential managers.
g) Management is
a science and also an art: Science is defined as a systematized
body of knowledge and it uses scientific methods of observation measurement,
experimentation etc. Its principles are
exact and university applicable. Management has systematized body of knowledge
and its principles are evolved on the basis of
observation. But management being a social science, it is not an exact
science. So management is a soft or
inexact science.
Art
refers to the way of doing specific things i.e. it indicates “ how an objective
is to be achieved. it is the know-how to
achieve the desired results. Art needs
continuous practice to reach the level of perfection. An art is application of science. Thus art and
science are interrelated in the sense that putting scientific principles into
practice requires art, which needs special knowledge and skills.
Management
is both a science as well as an art. The
science of management provides certain principles that can guide managers in
the professional efforts, while the art of management deals with tackling every
situation in an effective manner.
Planning and organising emphasize the science of management while
direction, communication motivation coordination and control emphasize art of
management. Getting work done through
people is an art of management.
h) Management is dynamic: Under
dynamic environment management faces several challenges hence efforts are made
to develop and use new techniques for managing the organisations effectively
and efficiently. as social change takes
place, management also changes to overcome the problems whenever they arise.
i)
Management
is a Profession: Profession is an occupation for which
specialized skills and training are required and these skills are used not for
private profit but for the larger interests of the society. There is a professional body to control the
behaviour of its members. At present
management is not a full fledged profession but it is heading towards becoming
a profession.
Scope
or Branches of Management:
Management
is an all pervasive function since it is required in all types of organized
endeavour. Thus, its scope is very large. The following activities are
covered under the scope of management:
a) Planning,
b) Organisation
c) Staffing.
d) Directing,
e) Coordinating,
and
f) Controlling.
The operational aspects of business
management, called the branches of management, are as follows:
1) Production
Management
2) Marketing
Management
3) Financial
Management.
4) Personnel
Management and
5) Office
Management.
1) Production Management:
Production means creation of utilities. This creation of utilities takes place
when raw materials are converted into finished products. Production management,
then, is that branch of management ‘which by scientific planning and regulation
sets into motion that part of enterprise to which has been entrusted the task
of actual translation of raw material into finished product.’
Plant
location and layout, production policy, type of production, plant facilities,
material handling, production planning and control, repair and maintenance,
research and development, simplification and standardization, quality control
and value analysis, etc., are the main problems involved in production
management.
2)
Marketing Management: Marketing is a sum total of physical activities
which are involved in the transfer of goods and services and which provide for
their physical distribution. Marketing management refers to the planning,
organising, directing and controlling the activities of the persons working in
the market division of a business enterprise with the aim of achieving the
organisation objectives.
It
can be regarded as a process of identifying and assessing the consumer needs
with a view to first converting them into products or services and then
involving the same to the final consumer or user so as to satisfy their wants
with a stress on profitability that ensures the optimum use of the resources
available to the enterprise. Market analysis, marketing policy, brand name,
pricing, channels of distribution, sales promotion, sale-mix, after sales
service, market research, etc. are the problems of marketing management.
3) Financial Management: Finance
is viewed as one of the most important factors in every enterprise. Financial
management is concerned with the managerial activities pertaining to the
procurement and utilization of funds or finance for business purposes. The main functions of financial management include:
(i)
Estimation of capital requirements;
(ii)
Ensuring a fair return to investors;
(iii)
Determining the suitable sources of funds;
(iv)
Laying down the optimum and suitable capital
Structure
for the enterprise:
(i)
Co-coordinating the operations of various departments;
(ii)
Preparation, analysis and interpretation of financial statements;
(iii)
Laying down a proper dividend policy; and
(iv)
Negotiating for outside financing.
4) Personnel Management: Personnel
Management is that phase of management which deals with the effective control
and use of manpower. Effective management of human resources is one of the most
crucial factors associated with the success of an enterprise. Personnel
management is concerned with managerial and operative functions. Managerial functions of personnel management include:
(i)
Personnel planning;
(ii)
Organising by setting up the structure of relationship among jobs, personnel
and physical factors to contribute towards organisation goals;
(iii)
Directing the employees; and
(iv)
Controlling.
The operating functions of personnel
management are:
(i)
Procurement of right kind and number of persons;
(ii)
Training and development of employees;
(iii)
Determination of adequate and equitable compensation of employees;
(iv)
Integration of the interests of the personnel with that of the enterprise; and
(v)
Providing good working conditions and welfare services to the employees.
5)
Office Management: The concept of management when applied to office is called ‘office
management’. Office management is the technique of planning, coordinating and
controlling office activities with a view to achieve common business
objectives. One of the functions of management is to organize the office work
in such a way that it helps the management in attaining its goals. It works as
a service department for other departments.
The
success of a business depends upon the efficiency of its administration. The
efficiency of the administration depends upon the information supplied to it by
the office. The volume of paper work in office has increased manifold in these
days due to industrial revolution, population explosion, increased interference
by government and complexities of taxation and other laws.
According
to Henry Fayol, in every organisation manager perform certain functions to
achieve results. These functions are broadly classified under five categories:-
a)
Planning: Planning is a process of making
decision about future. It provides direction to enterprise activities. Its work
is to decide in advance what is to be done, when and where it is to be done,
how it is to be done and by whom. The main functions of planning are Set up
goals, Forecasting, Search for alternatives source of action and Budgeting.
b)
Organising: It is concerned with the
arrangement of an organisation’s resources – people, material, technology and
finances in order to achieve enterprise objective. The main functions of
organising are Job design, Job specification and Authority and responsibility.
c)
Staffing: Staffing is the function of
employing suitable personas for the enterprise. It may be defined as an
activity where people are recruited, selected, trained, developed, motivated
and compensated for manning various positions.
d)
Directing: According to Dale, direction is
telling people what to do and seeing that they do it to the best of their
ability. Directing is a function of guiding and supervising the activities of
sub ordinates. The four main elements of directing are:-
1. Leadership: It is a process of influencing the action of a
person or a group to attain desired objectives. The success of an organisation
depends upon the quality of leadership shown by its managers.
2. Motivation: It is the process of stimulating people to take
desired courses of action. It is to inspire, encourage and impel people to take
required action.
3. Communication: It is a way of reaching other with ideas, facts,
and thoughts. Effective communication is important in organisation because
managers Can achieve very little without it.
e)
Controlling: It is the management function
concerned with monitoring employee’s activities, keeping the organisation on
track towards its goals, and making corrections as required. It include four
things:
Ø
setting standard of performance;
Ø
measuring actual performance;
Ø
comparing actual performance against the
standard ;
Ø
taking corrective actions to ensure goal accomplishment.
IMPORTANCE/SIGNIFICANCE/OBJECTIVES OF MANAGEMENT
According
to Drucker, management is the dynamic life giving element in every
organisation. In its absence, an organisation is merely a collection of men,
machines, money and material. The importance of management is:-
a) Optimum
Use of Resources: Management ensures optimum utilization of resources by
attempting to avoid wastage of all kinds. It helps in putting the resources to
the best advantage.
b) Effective
leadership and Motivation: In the absence of management, the working of an
enterprise will become random and haphazard in nature. Management creates
teamwork and motivates employees to work harder and better by providing
guidance, counseling and effective leadership.
c) Establish
Sound Industrial Relations: Management minimizes industrial disputes and
contributes to sound industrial relations in an undertaking. Industrial peace
is an essential requirement for increasing productivity.
d) Achievement
of Goals: Objectives can be achieved only when the human and non human
resources are combined in a proper way. Managers plan carefully, organize the
resources properly, hire competent people, and provide necessary guidance. Thus
management is goal oriented.
e) Reduces Costs - It gets maximum results through minimum
input by proper planning and by using minimum input & getting maximum
output. Management uses physical, human and financial resources in such a
manner which results in best combination. This helps in cost reduction.
f) Establishes Equilibrium - It enables the organisation to survive
in changing environment. It keeps in touch with the changing environment. With
the change is external environment, the initial co-ordination of organisation
must be changed. So it adapts organisation to changing demand of market /
changing needs of societies. It is responsible for growth and survival of
organisation.
g) Essentials for Prosperity of Society - Efficient management leads to
better economical production which helps in turn to increase the welfare of
people. Good management makes a difficult task easier by avoiding wastage of
scarce resource. It improves standard of living.
Levels of Management
There are three levels of management which are
given below:
1. The Top Management: It
consists of board of directors, chief executive or managing director. The top
management is the ultimate source of authority and it manages goals and
policies for an enterprise. It devotes more time on planning and coordinating
functions. The role of the top management can be summarized as follows:
a)
Top management lays down the objectives and
broad policies of the enterprise.
b)
It issues necessary instructions for
preparation of department budgets, procedures, schedules etc.
c)
It prepares strategic plans & policies for
the enterprise.
d)
It appoints the executive for middle level
i.e. departmental managers.
e)
It controls & coordinates the activities
of all the departments.
f)
It is also responsible for maintaining a
contact with the outside world.
g)
It provides guidance and direction.
h)
The top management is also responsible towards
the shareholders for the performance of the enterprise.
2. Middle Level Management: The
branch managers and departmental managers constitute middle level. They are
responsible to the top management for the functioning of their department. They
devote more time to organisational and directional functions. In small
organisation, there is only one layer of middle level of management but in big
enterprises, there may be senior and junior middle level management. Their role
can be emphasized as:
a)
They execute the plans of the organisation in
accordance with the policies and directives of the top management.
b)
They make plans for the sub-units of the
organisation.
c)
They participate in employment & training
of lower level management.
d)
They interpret and explain policies from top
level management to lower level.
e)
They are responsible for coordinating the
activities within the division or department.
f)
It also sends important reports and other
important data to top level management.
g)
They evaluate performance of junior managers.
h)
They are also responsible for inspiring lower
level managers towards better performance.
3. Lower Level Management: Lower
level is also known as supervisory / operative level of management. It consists
of supervisors, foreman, section officers, superintendent etc. According to
R.C. Davis, “Supervisory management refers to those executives whose work has
to be largely with personal oversight and direction of operative employees”. In
other words, they are concerned with direction and controlling function of
management. Their activities includes:
a) Assigning
of jobs and tasks to various workers.
b) They guide
and instruct workers for day to day activities.
c) They are
responsible for the quality as well as quantity of production.
d) They are
also entrusted with the responsibility of maintaining good relation in the
organisation.
e) They
communicate workers problems, suggestions, and recommendatory appeals etc to
the higher level and higher level goals and objectives to the workers.
f) They help
to solve the grievances of the workers.
g) They
supervise & guide the sub-ordinates.
h) They are
responsible for providing training to the workers.
i)
They arrange necessary materials, machines,
tools etc for getting the things done.
j)
They prepare periodical reports about the
performance of the workers.
k) They
ensure discipline in the enterprise.
l)
They motivate workers.
m) They are
the image builders of the enterprise because they are in direct contact with
the workers.
Difference
between Various levels of Management
|
Points
of Difference |
Top
Level Management |
Middle
Level Management |
Lower
Level Management |
|
i. Time Range |
It covers span of period |
It covers intermediate range |
It is concerned with short period |
|
ii. Skills |
It requires creative skills |
It needs persuasive skills |
It is concerned with operative skills |
|
iii. Evaluation |
It is difficult to evaluate its achievement |
It is less difficult to evaluate its performance |
It is easy to evaluate its performance |
|
iv. Persons |
It involves few persons |
It concerns moderate number of persons |
It is concerned with large number of persons |
|
v. Policy formulation |
It is concerned with the formulation of policies
to a greater extent |
It is moderately concerned with policy formulation |
It is least concerned with policy formulation |
Management Principles
Principles
of Management are the statements of fundamental truth which
provide guidelines which help management to take decisions and action. They are
derived from observation and experimental studies. Steps for driving principles are stated below:
a)
Choice of the
problem or opportunity
b)
Observation and
study of the problem
c)
Making hypothesis
d)
Conclusion and
forecasting
e)
Testing the
principle
Characteristics/Nature
of management principles are:
a)
Universal
Application: Management principles are applied in every situation, where
the objectives are attained through group efforts. All social, economic,
political, cultural or even religious organizations apply management principles
for the successful operations of their activities.
b)
Flexibility: The
business situations and its social economic environment are always changing, so
the management principles are dynamic enough to suit the size, nature, need and
situation of the business.
c)
General
statements: Management principles are concerned mostly with human behaviour,
which cannot be tested under controlled conditions i.e., a laboratory.
d)
Influencing human
behaviors: Human element is an essential factor of production. It activates and
extracts work from other factors also. Every worker is individually different
from other workers. Management is concerned with the integration of individual
efforts and how to channeling them towards achieving the desired results.
Management
principles are needed for the following reasons:
a)
Optimum use of resources: The
management principle of “science, not rule of the thumb” suggests
that every task should be done with minimum effort and energy and additional
work can be done with the saved energy. By saving time, efforts and energy
activities can be made economical and enhance the productivity of the
resources.
b)
Change in technology: The
management principle of “division of labour” helps
management in identifying in which activity technology has changed. If there is
no division of labour then confusion may prevail about what and how much to
change.
c)
Effective Administration: The
principle of ‘scalar chain’ helps the
enterprise to communicate with people at different levels. ‘Unity of direction’ removes confusion in minds of
employees; and ‘Unity of command’ avoids
dual subordination. Thus these principles help management in managing their
organisations effectively.
d)
Others: Besides the above, management principles also provide guidelines
to managers to:
a. Effectively
handle complex problems.
b.Clearly understand the nature and
scope of their work
c. To make
optimum use of the resources.
d.To take scientific decisions to meet
changing conditions.
CONTRIBUTION OF F.W. TAYLOR
F.W.
Taylor is one of the founders (the other two are Max Weber and Henry Fayol) of
classical thought/classical theory of management. He suggested scientific
approach to management also called scientific management theory. Frederick
Winslow Taylor well-known as the founder of scientific management was the first
to recognize and emphasis the need for adopting a scientific approach to
the task of managing an enterprise. He tried to diagnose the causes of
low efficiency in industry and came to the conclusion that much of waste
and inefficiency is due to the lack of order and system in the methods
of management. He found that the management was usually ignorant of the amount
of work that could be done by a worker in a day as also the best method
of doing the job. As a result, it remained largely at the mercy of the
workers who deliberately shirked work. He therefore, suggested that
those responsible for management should adopt a scientific approach in
their work, and make use of "scientific method" for achieving higher
efficiency. The scientific method consists essentially of:
a) Observation
b) Measurement
c) Experimentation
and
d) Inference.
He
advocated a thorough planning of the job by the management and emphasized the
necessity of perfect understanding and co-operation between the management and
the workers both for the enlargement of profits and the use of scientific
investigation and knowledge in industrial work. He summed up his approach in
these words:
a) Science,
not rule of thumb
b) Harmony,
not discord
c) Co-operation,
not individualism
d) Maximum
output, in place of restricted output
e) The
development of each man to his greatest efficiency and prosperity.
Concept of Scientific Management
Scientific Management may be defined
as the scientific study and analysis of work, scientific selection and training
of employees, standardization and scientific rate setting. It is an art of
knowing exactly what a manager wants his workers to do and seeing it that they
do it in the best and cheapest way.
According
to F.W.Taylor who is regarded as the father of scientific management,
“Scientific Management is the art of knowing exactly what you want your men to
do and seeing that they do it in the cheapest way”.
Scientific
management has the following main objectives:
a)
With the use of standardized tools, methods,
equipments, and development of workers increasing the rate of production.
b)
Reducing the cost of production by using the
different cost control techniques.
c)
Improvement in the quality of product through
quality control and inspections.
d)
To place the right person at the right place.
e)
Providing the wages to the workers according
to their efficiency.
Characteristics
of Scientific Management
a)
Predetermined
objectives: The objective of every job is predetermined and in order to achieve
that objective physical and human resources are applied.
b)
Predetermined
plans: In order to achieve the predetermined goal of every job, effective plans
for the most appropriate use of the available resources are prepared. Planning in
this case is goal oriented.
c)
Scientific
analysis of plans: The utility, effectiveness and suitability of plans is
tested and ascertained before it is put in practical operation.
d)
Set of rules: In
order to implement the plans a set of rules are made.
e)
Work studies:
Standardization of time, motion, fatigue and work is done after careful time,
motion, work & fatigue studies, so that maximum output could be achieved at
minimum sacrifice.
Advantages
and criticism of scientific management to the workers
Advantages to the workers: Improved
working conditions, Higher standard of living, Free training, Interesting job,
Incentive wage system
Criticism of scientific
management: Rigid Control, Monotonous work, Lack of initiative,
Exploitation, Lack of employment opportunities, Weak Unions.
Elements
of Scientific Management: The techniques which Taylor regarded as its
essential elements or features may be classified as under:
1.
Scientific Task and Rate-Setting (work study): Work study may be defined
as the systematic, objective and critical examination of all the factors
governing the operational efficiency of any specified activity in order to
effect improvement. Work study includes.
(a)
Methods Study: The management should try to ensure that the plant is
laid out in the best manner and is equipped with the best tools and machinery.
The possibilities of eliminating or combining certain operations may be
studied.
(b)
Motion Study: It is a study of the movement, of an operator (or even of
a machine) in performing an operation with the purpose of eliminating useless
motions.
(c) Time Study (work measurement): The
basic purpose of time study is to determine the proper time for performing the
operation. Such study may be conducted after the motion study. Both time study
and motion study help in determining the best method of doing a job and the
standard time allowed for it.
(d)
Fatigue Study: If, a standard task is set without providing for measures
to eliminate fatigue, it may either be beyond the workers or the workers may over
strain themselves to attain it. It is necessary, therefore, to regulate the
working hours and provide for rest pauses at scientifically determined
intervals.
(e)
Rate-setting: Taylor recommended the differential piece wage system,
under which workers performing the standard task within prescribed time are
paid a much higher rate per unit than inefficient workers who are not able to
come up to the standard set.
2.
Planning the Task: Having set the task which an average worker must
strive to perform to get wages at the higher piece-rate, necessary steps have
to be taken to plan the production thoroughly so that there is no bottlenecks
and the work goes on systematically.
3.
Selection and Training: Scientific Management requires a radical change
in the methods and procedures of selecting workers. It is therefore necessary
to entrust the task of selection to a central personnel department. The
procedure of selection will also have to be systematised. Proper attention has
also to be devoted to the training of the workers in the correct methods of
work.
4.
Standardization: Standardization may be introduced in respect of the
following.
(a)
Tools and equipment: By standardization is meant the process of bringing
about uniformity. The management must select and store standard tools and
implements which will be nearly the best or the best of their kind.
(b)
Speed: There is usually an optimum speed for every machine. If it is
exceeded, it is likely to result in damage to machinery.
(c)
Conditions of Work: To attain standard performance, the maintenance of
standard conditions of ventilation, heating, cooling, humidity, floor space,
safety etc., is very essential.
(d)
Materials: The efficiency of a worker depends on the quality of
materials and the method of handling materials.
5.
Specialization: Scientific management will not be complete without the
introduction of specialization. Under this plan, the two functions of
'planning' and 'doing' are separated in the organisation of the plant. The
`functional foremen' are specialists who join their heads to give thought to
the planning of the performance of operations in the workshop. Taylor suggested
eight functional foremen under his scheme of functional foremanship.
(a)
The Route Clerk: To lay down the sequence of operations and instruct the
workers concerned about it.
(b)
The Instruction Card Clerk: To prepare detailed instructions regarding
different aspects of work.
(c)
The Time and Cost Clerk: To send all information relating to their pay
to the workers and to secure proper returns of work from them.
(d)
The Shop Disciplinarian: To deal with cases of breach of discipline and
absenteeism.
(e)
The Gang Boss: To assemble and set up tools and machines and to teach
the workers to make all their personal motions in the quickest and best way.
(f)
The Speed Boss: To ensure that machines are run at their best speeds and
proper tools are used by the workers.
(g)
The Repair Boss: To ensure that each worker keeps his machine in good
order and maintains cleanliness around him and his machines.
(h)
The Inspector: To show to the worker how to do the work.
6.
Mental Revolution: At present, industry is divided into two groups –
management and labour. The major problem between these two groups is the
division of surplus. The management wants the maximum possible share of the
surplus as profit; the workers want, as large share in the form of wages.
Taylor has in mind the enormous gain that arises from higher productivity. Such
gains can be shared both by the management and workers in the form of increased
profits and increased wages.
Contribution of Henry Fayol
Henry
Fayol (1841-1925): was a Frenchman with considerable executive
experience who focused his research on the things that managers do. He wrote
during the same period Taylor did. Taylor was a scientist and he was managing
director of a large French coal-mining firm. He was the first to envisage a
functional process approach to the practice of management. His was a functional
approach because it defined the functions that must be performed by managers.
It was also a process approach because he conceptualized the managerial job in
a series of stages such as planning, organizing and controlling. According to
Fayol, all managerial tasks could be classified into one of the following six groups:
• Technical (related to production);
• Commercial (buying, selling and
exchange);
• Financial (search for capital and its
optimum use);
• Security (protection for property and
person);
• Accounting (recording and taking stock
of costs, profits, and liabilities, keeping balance sheets, and compiling
statistics);
• Managerial (planning, organizing,
commanding, coordinating and control);
He
pointed out that these activities exist in every organization. He focused his
work on the administrative or managerial activities and developed the following
definition:
• Planning meant developing a course of
action that would help the organization achieve its objectives.
• Organizing meant mobilizing the
employees and other resources of the organization in accordance with the plan.
• Commanding meant directing the
employees and getting the job done.
• Coordinating meant achieving harmony
among the various activities.
• Controlling meant monitoring
performance to ensure that the plan is properly followed.
Henry Fayol's 14 Principles of
Management:
The
principles of management are given below:
a. Division
of Work: This is the principle of
specialization which, according to Fayol, applies to all kinds of work,
managerial as well as technical. It helps a person to acquire an ability and
accuracy with which he can do more and better work with the same effort.
Therefore, the work of every person in the organization should be limited as
far as possible to the performance of a single leading function.
b. Authority
and Responsibility: The right to give order is called authority.
The obligation to accomplish is called responsibility. Authority and
Responsibility are the two sides of the management coin. They exist together.
They are complementary and mutually interdependent.
c. Discipline:
The
objectives, rules and regulations, the policies and procedures must be honoured
by each member of an organisation. There must be clear and fair agreement on
the rules and objectives, on the policies and procedures. There must be
penalties (punishment) for non-obedience or indiscipline. No organisation can
work smoothly without discipline – preferably voluntary discipline.
d. Unity of
Command: In order to avoid any possible confusion and conflict, each member
of an organisation must received orders and instructions only from one superior
(boss).
e. Unity of
Direction: All members of an organisation must work together to accomplish
common objectives.
f.
Emphasis on Subordination of Personal Interest
to General or Common Interest: This is also called principle of
co-operation. Each shall work for all and all for each. General or common
interest must be supreme in any joint enterprise.
g. Remuneration:
Fair
pay with non-financial rewards can act as the best incentive or motivator for
good performance. Exploitation of employees in any manner must be eliminated.
h. Centralization:
There
must be a good balance between centralization and decentralization of authority
and power. Extreme centralization and decentralization must be avoided.
i.
Scalar Chain: The unity
of command brings about a chain or hierarchy of command linking all members of
the organisation from the top to the bottom. Scalar denotes steps.
j.
Order: Fayol suggested that there is a place
for everything. Order or system alone can create a sound organisation and efficient
management.
k. Equity: An
organisation consists of a group of people involved in joint effort. Hence,
equity (i.e., justice) must be there. Without equity, we cannot have sustained
and adequate joint collaboration.
l.
Stability of Tenure: A person
needs time to adjust himself with the new work and demonstrate efficiency in
due course. Hence, employees and managers must have job security. Security of
income and employment is a pre-requisite of sound organisation and management.
m. Esprit of
Co-operation: Esprit de corps is the foundation of a sound organisation. Union
is strength. But unity demands co-operation. Pride, loyalty and sense of
belonging are responsible for good performance.
n. Initiative:
Creative
thinking and capacity to take initiative can give us sound managerial planning
and execution of predetermined plans.
Difference between contribution of Taylor and Fayol
Both
the persons have contributed to development of science of management. The
contribution of these two pioneers in the field of science of management has
been reviewed as “The work of Taylor & Fayol was, of course, especially
complementary. They both realized that problem of personnel & its
management at all levels is the key to individual success. Both applied
scientific method to this problem that Taylor worked primarily from operative
level, from bottom to upward, while Fayol concentrated on managing director and
work downwards, was merely a reflection of their very different careers”. They
both differ from each other in following aspects:
|
Basis |
Taylor’s Approach |
Fayol’s Approach |
|
a) Human Aspect |
Taylor disregards human elements and there is more stress on
improving men, materials and methods. |
Fayol pays due regards on human element. E.g. Principle of
initiative, Espirit De’ Corps and Equity recognizes a need for human
relations. |
|
b) Status |
Father of scientific management. |
Father of management principles |
|
c) Efficiency and Administration |
Stressed on efficiency. |
Stressed on general administration. |
|
d) Approach |
It has micro-approach because it is restricted to factory only. |
It has macro-approach and discuses general principles of
management which are applicable in every field of management. |
|
e) Scope of Principles |
These principles are restricted to production activities. |
These are applicable in all kinds of organisation regarding
their management affairs. |
|
f) Achievement |
Scientific management |
Administrative management |
********************************Also Read:
Unit 4:********************************Also Read:********************************
Evolution of management thoughts
The
practice of management is as old as human civilization. The ancient
civilizations of Egypt (the great pyramids), Greece (leadership and war tactics
of Alexander the great) and Rome displayed the marvelous results of good
management practices. The origin of management as a discipline was developed in
the late 19th century. Over time, management thinkers have sought ways to
organize and classify the voluminous information about management that has been
collected and disseminated. These attempts at classification have resulted in
the identification of management approaches. The approaches of management are
theoretical frameworks for the study of management. Each of the approaches of
management are based on somewhat different assumptions about human beings and
the organisations for which they work. The different approaches of management
are:
a) Early management approaches
represented by scientific management (Classical approach or Theories)
b) Modern management approaches
represented by behavioral science movement, quantitative approach, systems
approach and Contingency approach (Neo-classical approach or theories)
a) THE CLASSICAL APPROACH: The
classical approach is the oldest formal approach of management thought. Its
roots pre-date the twentieth century. The classical approach of thought
generally concerns ways to manage work and organisations more efficiently.
Three areas of study that can be grouped under the classical approach are
scientific management, administrative management, and bureaucratic management.
(i)
Scientific Management: Frederick Winslow Taylor is known as the father of
scientific management. Scientific management (also called Taylorism or the
Taylor system) is a theory of management that analyzes and synthesizes
workflows, with the objective of improving labor productivity. In other words,
Traditional rules of thumb are replaced by precise procedures developed after
careful study of an individual at work.
(ii)
Administrative Management: Administrative management focuses on the management
process and principles of management. In contrast to scientific management,
which deals largely with jobs and work at the individual level of analysis,
administrative management provides a more general theory of management. Henri
Fayol is the major contributor to this approach of management thought.
(iii)
Bureaucratic Management: Bureaucratic management focuses on the ideal form of
organisation. Max Weber was the major contributor to bureaucratic management.
Based on observation, Weber concluded that many early organisations were
inefficiently managed, with decisions based on personal relationships and
loyalty. He proposed that a form of organisation, called a bureaucracy,
characterized by division of labor, hierarchy, formalized rules, impersonality,
and the selection and promotion of employees based on ability, would lead to
more efficient management. Weber also contended that managers' authority in an
organisation should be based not on tradition or charisma but on the position
held by managers in the organisational hierarchy.
b) Neo-classical approach: It can be
studied under the following headings:
a)
THE BEHAVIORAL Or SITUATIONAL APPROACH: The behavioral approach of management
thought developed, in part, because of perceived weaknesses in the assumptions
of the classical approach. The classical approach emphasized efficiency,
process, and principles. Some felt that this emphasis disregarded important
aspects of organisational life, particularly as it related to human behavior.
Thus, the behavioral approach focused on trying to understand the factors that
affect human behavior at work.
(i)
Human Relations: The Hawthorne Experiments began in 1924 and continued through
the early 1930s. A variety of researchers participated in the studies,
including Elton Mayo. One of the major conclusions of the Hawthorne studies was
that workers' attitudes are associated with productivity. Another was that the
workplace is a social system and informal group influence could exert a
powerful effect on individual behavior. A third was that the style of
supervision is an important factor in increasing workers' job satisfaction.
(ii)
Behavioral Science: Behavioral science and the study of organisational behavior
emerged in the 1950s and 1960s. The behavioral science approach was a natural
progression of the human relations movement. It focused on applying conceptual
and analytical tools to the problem of understanding and predicting behavior in
the workplace. The behavioral science approach has contributed to the study of
management through its focus on personality, attitudes, values, motivation,
group behavior, leadership, communication, and conflict, among other issues.
b)
THE QUANTITATIVE APPROACH: The quantitative approach focuses on improving
decision making via the application of quantitative techniques. Its roots can
be traced back to scientific management.
(i)
Management Science: Management science (also called operations research) uses
mathematical and statistical approaches to solve management problems. It
developed during World War II as strategists tried to apply scientific
knowledge and methods to the complex problems of war. Industry began to apply
management science after the war. The advent of the computer made many management
science tools and concepts more practical for industry
(ii) Production And Operations Management:
This approach focuses on the operation and control of the production process
that transforms resources into finished goods and services. It has its roots in
scientific management but became an identifiable area of management study after
World War II. It uses many of the tools of management science. Operations
management emphasizes productivity and quality of both manufacturing and
service organisations. W. Edwards Deming exerted a tremendous influence in
shaping modern ideas about improving productivity and quality. Major areas of
study within operations management include capacity planning, facilities
location, facilities layout, materials requirement planning, scheduling,
purchasing and inventory control, quality control, computer integrated
manufacturing, just-in-time inventory systems, and flexible manufacturing
systems.
c)
SYSTEMS APPROACH: The systems approach focuses on understanding the organisation
as an open system that transforms inputs into outputs. The systems approach
began to have a strong impact on management thought in the 1960s as a way of
thinking about managing techniques that would allow managers to relate
different specialties and parts of the company to one another, as well as to
external environmental factors. The systems approach focuses on the
organisation as a whole, its interaction with the environment, and its need to
achieve equilibrium.
d)
CONTINGENCY APPROACH: The contingency approach focuses on applying management
principles and processes as dictated by the unique characteristics of each
situation. It emphasizes that there is no one best way to manage and that it
depends on various situational factors, such as the external environment,
technology, organisational characteristics, characteristics of the manager, and
characteristics of the subordinates. Contingency theorists often implicitly or
explicitly criticize the classical approach for its emphasis on the
universality of management principles; however, most classical writers
recognized the need to consider aspects of the situation when applying
management principles.
Distinction
between classical neoclassical approaches:
|
Basis |
Classical Approach |
Neo Classical Approach |
|
a) Focus |
Funcitons and economic demand of worker |
Emotion and human qualities of workers |
|
b) Structure |
Impersonal and mechanistic |
Social system |
|
c) Application |
Autocratic amanagement and strict rule |
Democratic process |
|
d) Emphasize |
Discipline and rationality |
Personal security and social demand |
|
e) Work Goal of worker |
Maximum remuneration and reward |
Attainment of organisation goal |
|
f) Concept about men |
Economic being |
Social being |
|
g) Content |
Scientific management, administrative
management and bureaucratic management |
Human relation movement and organisational
behaviour |
|
h) Relation |
Formal |
Informal |
|
i) Nature |
Mechanistic |
Organisitic |
Concept of Coordination
Coordination is an orderly arrangement of group
efforts to provide unity of action in pursuit of common purpose. The key
features of coordination are as follows:
a)
Coordination is not
a distinct function but the very essence of management.
b)
It is the result of
conscious and concerted action by management.
c)
Coordination is a
continuous, never ending or on-going process. It is also a dynamic process.
d)
Coordination is
required in group efforts not in individual effort.
e)
Coordination has a
common purpose of getting organizational objectives accomplished.
Importance
of co- ordination (Essence of Management):
Co-ordination is an integral element or ingredient
of all the managerial functions as discussed below: -
a)
Coordination
through Planning: Planning facilitates co-ordination by integrating the various
plans through mutual discussion, exchange of ideas. e.g. - co-ordination
between finance budget and purchases budget.
b)
Co-ordination
through Organizing - Mooney considers co-ordination as the very essence of
organizing. In fact when a manager groups and assigns various activities to
subordinates, and when he creates department’s co-ordination uppermost in his
mind.
c)
Co-ordination
through Staffing - A manager should bear in mind that the right no. of
personnel in various positions with right type of education and skills are
taken which will ensure right men on the right job.
d)
Co-ordination
through Directing - The purpose of giving orders, instructions &
guidance to the subordinates is served only when there is a harmony between
superiors & subordinates.
e)
Co-ordination
through Controlling - Manager ensures that there should be co-ordination
between actual performance & standard performance to achieve organizational
goals.
Now
we can conclude that all the functions of management are affected by
coordination. Hence coordination is essential for achieving the objectives of
the organisation. It is also required for the survival, growth and
profitability of the organisation. Coordination encourages team spirit, gives
right direction, motivates employees, and makes proper utilisation of
resources. Therefore, Coordination is rightly called the "Essence of
Management".
Difference
between Co-ordination and Co-operation
|
Basis |
Co-ordination |
Co-operation |
|
1. Meaning |
It refers to bringing together the activities of an
organisation. |
It refers to voluntary efforts of individuals to work together
and help each other. |
|
2. Nature |
It is a conscious and deliberate effort of manager. |
It is a voluntary effort of employees. |
|
3. Scope |
It includes co-operation and hence has a wider scope. |
It has a narrow scope as it is towards establishing
co-ordination. |
|
4. Requirement |
Co-ordination is essential for achievement of organisational
goal. |
Co-operation is voluntary in nature. |
|
5. Relations |
Co-ordination arises out of both formal and informal relations. |
It arises out of informal relations. |
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