Management Theory and Practice

MBA- I Semester

Course Instructor
Dr. Subrahmanyam A

UNIT- 1
Introduction to Management and
Evolution of Management Thought

GITAM Institute of Management

(GITAM Deemed to be University)

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Introduction to Management:
Management: It is a wide term. It is various described as an activity, a process and a group
of people vested with the authority to make decision.

“Management is what a manager does”. ---- Allen Louis

“Management is the art of getting work done out of others, working in a group” – Marry
Parker Follet

“Scientific Management is an art of knowing exactly what you want your men to do and
seeing that they do it in the best and cheapest way”. –F.W.Taylor

“To manage is to forecast and plan, to organize to command, to co-ordinate, to control”. –

Henry Fayol

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Introduction to Management:

Who Is a Manager?
Manager: someone who coordinates and oversees the work of other people so that
organizational goals can be accomplished.

Where Do Managers Work?

Organization: a deliberate arrangement of people to accomplish some specific
purpose

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Nature / Features / Characteristics of Management
1. Management as an activity (or a process)

2. Management is a universal process

3. Management is factor of production:

4. Management is goal oriented:

5. Management is intangible:

6. Management is purposeful:

7. Management is Decision-Making:

8. Art as well as Science:

9. Management is a profession:

10. Management needed at all levels:

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Scope of Management
1. Subject-Matter of Management:
2. Functional Areas of Management:
3. Management is an Inter-Disciplinary Approach:
4. Universal Application:

Importance of Management
1. Management meets the challenge of change:
2. Accomplishment of group goals:
3. Effective utilization if business:
4. Resource Development:
5. Management directs the organization:
6. Integrates various interests:
7. Stability:
8. Innovation:
9. Co-ordination and team spirit:
10. Tackling problems:

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Classifying Managers:
• First-Line Managers: manage the work of non-managerial employees

• Middle Managers: manage the work of first-line managers

• Top Managers: responsible for making organization-wide decisions and

establishing plans and goals that affect the entire organization

Levels of Management

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 Why Are Managers Important?
• Organizations need their managerial skills and abilities now more than
ever
• Managers are critical to getting things done
• Managers do matter to organizations

What Do Managers Do?

• Management involves coordinating and overseeing the work activities of
others so that their activities are completed efficiently and effectively.

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Efficiency and Effectiveness
• Efficiency: doing things right
– getting the most output from the least amount of input

• Effectiveness: doing the right things

– attaining organizational goals

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Four Functions of Management

Exhibit shows the four functions used to describe a manager’s work: planning, organizing,
leading, and controlling.

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Mintzberg’s Managerial Roles
• Roles: specific actions or behaviors expected of and
exhibited by a manager

• Mintzberg identified 10 roles grouped around

interpersonal relationships, the transfer of
information, and decision-making

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Management Skills
• Technical skills
– Knowledge and proficiency in a specific field
• Human skills
– The ability to work well with other people
• Conceptual skills
– The ability to think and conceptualize about abstract and complex situations
concerning the organization

Skills Needed at Different Managerial Levels

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Important Managerial Skills

Exhibit 1-7 shows other important managerial skills.

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Changes Facing by Managers

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Exhibit 1-8 shows some of the most important changes facing managers.
Focus on the Customer
• Without customers, most organizations would cease to exist
• Managing customer relationships is the responsibility of all managers and
employees
• Consistent, high-quality customer service is essential

Focus on Technology
• Managers must get employees on board with new technology
• Managers must oversee the social interactions and challenges
involved in using collaborative technologies

Focus on Social Media

• Social media: forms of electronic communication through which users
create online communities to share ideas, information, personal
messages, and other content

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Focus on Innovation
• Innovation: exploring new territory, taking risks, and doing things
differently

Focus on Sustainability
• Sustainability: a company’s ability to achieve its business goals and
increase long-term shareholder value by integrating economic,
environmental, and social opportunities into its business strategies

Focus on the Employee

• Treating employees well is not only the right thing to do, it is also good
business

The Reality of Work

• When you begin your career, you will either manage or be managed.

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Universal Need for Management

Exhibit 1-9 shows that management is universally needed in all types of, and throughout all
areas of, organizations.
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Rewards and Challenges of Being a Manager
Rewards Challenges

Create a work environment in which organizational Do hard work

members can work to the best of their ability
Have opportunities to think creatively and use May have duties that are more clerical than
imagination managerial
Help others find meaning and fulfillment in work Have to deal with a variety of personalities

Support, coach, and nurture others Often have to make do with limited resources

Work with a variety of people Motivate workers in chaotic and uncertain situations

Receive recognition and status in community and Blend knowledge, skills, ambitions, and experiences
organization of diverse work group
Play a role in influencing organizational outcomes Success depends on others’ work performance

Receive appropriate compensation in the form of Blank cell

salaries, bonuses, and stock options
Good mangers are needed by organizations Blank cell

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MANAGEMENT VS ADMINISTRATION

S.NO ADMINISTRATION MANAGEMENT

1 It is an higher level function It is an lower level function

2 It refers to the owners of the It refers to the employees

business
3 It concerned with decision It concerned with execution of the
making decision
4 It acts through the management It acts through the organisation

5 It lays down broad policies and It executes these policies into

principles and guidance practice.

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Management History and Evolution

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Evolution of Management Thought

I Historical background

• Early examples

• The Egyptian pyramids and the Great Wall of China

• In 1776 Adam Smith published “The Wealth of Nations”

– division of labor (job specialization): the breakdown of jobs into

narrow and repetitive tasks

• Industrial revolution: a period during the late eighteenth century when

machine power was substituted for human power, making it more
economical to manufacture goods in factories than at home

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 Evolution of Management Though

II Pre-scientific or pre-classical management period

• Robert Owen (1771-1858) (Father of personnel management)

• Charles Babbage (1792-1871) (Father of modern computing)

• Henry Robinson Towne (1844-1924)(early systematizer of management)

III Classical management theory

• Scientific management theory by F.W. Taylor

• Administrative management by Henry Fayol

• Bureaucratic model of Max Weber

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 Evolution of Management Though
IV Neo-classical theory or behavioural theory

• Mary Parker Follett (1868-1933)

• Elton mayo (1880-1949) (Hawthorne studies)

• Abraham Maslow (1908-1964)

• Douglas McGregor (1906-1964)

• Chester Barnard (1886-1961)

V Modern or Contemporary theory

• System approach

• Contingency approach

•
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Major Approaches to Management

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Classical Approach
• Classical approach: first studies of management, which emphasized
rationality and making organizations and workers as efficient as
possible.

1. Scientific Management
2. General Administrative Theory

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Scientific Management
• Scientific management: an approach that involves using the scientific
method to find the “one best way” for a job to be done.
• The scientific management theory developed due to the need to
increase productivity and efficiency.
• The major contributors of scientific management theory are:
1. Frederick W. Taylor (Father of scientific management)

2. Frank Gilbreths (1968-1924) and Lillian Gilbreths (1878-1972)

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1. Frederick W. Taylor (Father of scientific management)
Seven basic principles
1. Science, not the rule of thumb

2. Harmony, not discord

3. Co-operation, not individualism

4. Maximum production, in place of restricted production

5. Development of each person to the greatest of his capabilities

6. A more equal division of responsibility between management

and workers

7. Mental revolution on the part of managerial and workers

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1. Frederick W. Taylor (Father of scientific management)
• Features of Scientific Management
1. Separation of Planning and Doing
2. Functional foremanship
3. Job analysis
4. Scientific Selection and Training of Workers
5. Financial Incentives
6. Economy
7. Mental Revolution

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2. Frank and Lillian Gilbreth
Frank Gilbreths (1868-1924) and Lillian Gilbreths (1878-1972)
A husband-and-wife team studied job motions. They refined Taylor’s analysis of
work movements and made many contributions to time-and-motion study.

• Therbligs: a classification scheme for labeling basic hand motions

• Motion Study : Motion study is a systematic way of determining the best

method of doing the work by scrutinizing the motions made by the worker or
the machine. As per Gilbreth it is the science of eliminating the wastefulness
due to unnecessary motions.

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General Administrative Theory
• General administrative theory: an approach to management that
focuses on describing what managers do and what constitutes good
management practice

Henri Fayol

Henri Fayol (1841-1925) (Father of general and industrial

management)
A French mining engineer identified 14 principles of management based
on his management experiences.
• Principles of management: fundamental rules of management that
could be applied in all organizational situations and taught in schools

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Fayol’s Administrative Management Theory
Fayol’s contributions are published in his famous book “The general and
industrial administration”. This book is divided into two parts.

First part is concerned with the theory of administration in which Fayol divided
the total industrial activities into six categories which are given below:

1. Technical (Production and manufacturing)

2. Commercial (Buying, Selling and Exchange)

3. Financial (Optimum use of capital)

4. Security (Protection of property and person)

5. Accounting (Balance sheets and cost stations)

6. Management (Planning, Organising, Coordinating, Directing and

Controlling)

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Fourteen (14) Principles of Management

1. Division of work 8. Centralisation

2. Authority and responsibility 9. Scalar chain

3. Discipline 10. Order

4. Unity of command 11. Equity

5. Unity of direction 12. Stability of tenure of personnel

6. Subordination of individual 13. Initiative
interest to general interest
14. Esprit-de-corps
7. Remuneration of personnel

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Gang-plank:
• The formal lines of authority from highest to lowest ranks are known as scalar
chain. According to Fayol Organisation should have a chain of authority and
communication that runs from top to bottom and should be followed by
managers and subordinates.

• Gang-plank is the technique of shortening the route of communication which

is usually followed through all channel of hierarchy. Fayol suggested that in
case of urgencies, by jumping the prescribed line of authority, these officials
could deal with one another at one sitting and sort out several problems
quickly.

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 Behavioral Approach
• Organizational behavior (OB): the study of the actions of people at
work
Early OB Advocates

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Behavioural Management Theory

Elton Mayo (1880-1949)

Elton Mayo’s contributions came as part of the Hawthorne Studies which is a
series of experiments that rigorously applied classical management theory only to
reveal its shortcomings.

A team of researchers from Harvard University, led by Elton Mayo, conducted

some experiments and investigated informal groupings, informal relationships,
patterns of communication, patterns of informal leadership etc.

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Hawthorne Studies
• Hawthorne studies: a series of studies during the 1920s and 1930s One series of
studies was conducted from 1924 to 1932 at the

• Hawthorne Works of the Western Electric Company in Chicago.

• That provided new insights into individual and group behavior.

The Hawthorne experiment consists of four parts:

I Illumination experiment (1924-1927)

II Relay assembly test room experiment (1927-1932)

III Mass interviewing programme (1928-1930)

IV Bank Wiring Test Room Experiments (1931-1932)

The general conclusion from the above experiments is human relation and social needs of
the workers are crucial aspects of business management.

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Behavioural Management Theory

Mary Parker Follett (1868-1933)

• She felt that Taylor was ignoring the human side of the organisation.

• She pointed out that management often ignore the various ways in which
employees can contribute to the organisation when managers allow them to
participate in their every day work lives.

• She felt that managers needed to coordinate and harmonize group efforts
rather than force and compel people.

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Quantitative Approach
• Quantitative approach: the use of quantitative techniques to improve
decision-making
• Total Quality Management
• Total Quality Management (TQM): a philosophy of management that
is driven by continuous improvement and responsiveness to customer
needs and expectations
• Characteristics of TQM:
1.Intense focus on the customer
2.Concern for continual improvement
3.Process focused
4.Improvement in the quality of everything the organization does
5.Accurate measurement
6.Empowerment of employees

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Contemporary Approaches
System Approach
• System: a set of interrelated and interdependent parts arranged in a
manner that produces a unified whole
• Closed systems: systems that are not influenced by and do not
interact with their environment
• Open systems: systems that interact with their environment

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Contingency Approach
• Contingency approach: a management approach that recognizes
organizations as different, which means they face different situations
(contingencies) and require different ways of managing

Popular Contingency Variables

Organization Size.
Routineness of Task Technology.
Environmental Uncertainty.
Individual Differences.

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 End of UNIT-1

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