UNIT-I

Introduction To Management: Concept of management – Functions of Management –

Evolution of Management thought: Taylor’s Scientific Management Theory – Fayal’s
Principles of management- Maslow’s theory of Hierarchy of human needs- Douglas Mc
Gregor’s Theory X and Theory Y, Hertzberg Two factor theory of motivation, Leadership
styles.

INTRODUCTION:

Management is universal in the modern industrial world and there is no substitute for good
management. It makes human efforts more productive and brings better technology, product, and
services to our society. It is a crucial economic resource and a life-giving element in business.
Without proper management the resources of production cannot be converted into production.
Management is a must to accomplish desired goals through group action. It is essential to convert
the disorganized resources of Men, Material, Machines and Methods into a useful and effective
enterprise. Thus, management is a vital function concerned with all aspects of the working of an
organization.

Management in all business and organizational activities is the act of getting people together to
accomplish desired goals and objectives efficiently and effectively. Management comprises
planning, organizing, staffing, leading or directing, and controlling an organization (a group of
one or more people or entities) or effort for the purpose of accomplishing a goal. Resourcing
encompasses the deployment and manipulation of human resources, financial resources,
technological resources, and natural resources.

MEANING:

It is very difficult to give a precise meaning to the term management. The concept of
management is as old as humans itself. Ever since people began forming groups to accomplish
aims, they could not achieve as individuals, managing has been essential to ensure the co-
ordination of the individuals’ efforts.

Management is the function of getting things done through people and directing the efforts of
individual towards a common objective.

DEFINITION:
Management is the art of getting things done through and with the people in formally organized
groups.
-Harlod Koontz
 In the words of Henry Fayol – “To manage is to forecast and to plan, to organize, to command,
to co-ordinate and to control”.

According to F.W Taylor, management is the art of knowing what you want to do and then
seeing that is done in the best and cheapest way.

According to Peter. F. Drucker “Management is a multipurpose organization that manages a

business and manages managers and manages worker and work.”

CONCEPTS OF MANAGEMENT:

Management is relatively a new discipline. Being a new discipline, it has drawn concepts and
principles from economics, physics, and statistics so on. The result is that each group has defined
management differently. Thus, taking all these points into view together it becomes difficult to
define management in comprehensive way. In this present context, the term management is used
in three alternative ways.

Management as an academic discipline: Discipline refers to a field of study having well

defined concepts and principles. When we refer to management as a discipline, we include in it
the various relevant concepts and principles, the knowledge which aids in managing. From this
point of view, management can be treated either as an art or science, the two basic and broad
principles.

Management as a team: As a team or a group of persons, management consists of all personnel

having managerial responsibility. Managers occupy positions at different levels of authority but
perform the same basic functions. Top-level managers have greater authority than middle-level
managers who in turn have greater authority than operating managers. In this way, a system of
authority is created in every organization.

Management as a process: Perhaps the best way to describe management is in terms of what
managers do. It involves organizing, directing, and controlling human efforts to accomplish
predetermined goals. As a process, management refers to a series of interrelated elements or
functions. These are:
 Defining the aims or objectives of the organization.
 Formulating policies, procedures, programmes, etc. to attain these objectives efficiently and
economically.
 Bringing together men, money, materials, machinery, and other factors of production.

Management as a human resource: The scientific management school developed by F.W.

Taylor laid exclusive emphasis on machines and neglected human factor in industry. The concept
of management as a human process was evolved by the behavioral scientists to recognize the role
of human factor in the industry. The advocates of this concept argue that in as much as a
manager gets things done through and with the help of people; the study of management should
be centered around the workers and their personal relations.

Management as an economic resource: Like land, labor capital and entrepreneurship

management are vital factors of production. An entrepreneur establishes the organization as its
owner. But it is management that transforms the various resources into a productive entity. The
inputs of labor, capital and materials do not buy themselves ensure growth. They require the
catalyst of management to produce results. It is a management that coordinates various factors of
production. Therefore, management occupies a central place among productive factors. As a
factor of production, management can be made efficient through the training and development of
managers.

NATURE OF MANAGEMENT OR FEATURES OF MANAGEMENT OR

CHARACTERISTICS OF MANAGEMENT

The study and application of management techniques in managing the affairs of the
organizations have changed its nature over the period. Various contributions on the field of
management have changed its nature, for example for merely a practice to science also. Similarly
other changes have also occurred. Thus, nature of management can be described as follows:

Organized Activities: Management is a process of organized activities. Without organized

activities; two groups of people cannot be involved in the performance of activities. Where a
group of people are involved in working towards a common objective, management comes into
existence.

Existence of Objectives: An objective or set of objectives should exist towards which the
organized group activities are directed. Without objectives, it becomes difficult to define the
direction where organized group activities should lead to. The existence of objectives is a basic
criterion of every human organization because all organizations are deliberate and purposive
creation and, therefore, they should have some objectives

Relationship among Resources: Organized activities meant to achieve common goals are
brought about to establish certain relationship among the available resources. Resources include
money, machine, materials, and people. All these resources are made available to those who
manage; they apply knowledge, experience, principles for getting desired results. Thus, the
essence of management is integration of various organizational resources.

Working with and Through People / management is people oriented: Management involves
working with people and getting organizational objectives achieved through them. The idea of
working through people is interpreted in terms of assigning activities to subordinates. The
superior – subordinate relationships are created because of organized activities. Through the
process of assignment and reassignment of activities, the actual work is performed by people at
the operative level which is the lowest level in an organization

Decision-Making: Management process involves decision making at various levels for getting
things done by others. Decision making basically involves selecting the most appropriate
alternative out of the several. The entire future of organizations resets on the degree to which the
right decision is made by managers. Therefore, the success or failure of managers can be judged
by the quality of decisions that the make.
Management is a Multidisciplinary: Management is basically multi-disciplinary. This implies
that, although management has been developed as a separate discipline, it draws knowledge and
concepts from various disciplines. It draws freely ideas and concepts from such disciplines as
psychology, sociology, anthropology, economics ecology, statistics, operation research, history
etc., Management integrated the ideas and concepts taken from these disciplines and presents
newer concepts which can be put in practice for managing the organizations

Management is Dynamic in Nature: Principles are a fundamental truth which establishes cost
and effect relationships of a function. This principal is flexible in nature and change with the
changes in the environment. In which an organization exists.

Management is situational in Nature: Management principals are relative not absolute and
there should be apply according to the need of the organization. Each organization may be
different from others. The differences may be existence because of type, place, and socio-culture
factors. Etc. However, includes working with the same organization may also differ.

Management Science or art: Science means body of knowledge acquired by making through
experiments. Art means application of skills in finding a desired results. There is controversy
weather management is science or art. However, management is both a science and an art.

Management as Profession: Management has been regarded as a profession by many why

many have suggested that it has not achieved to status of a profession.

Universality of Management: Management is a universal phenomenon. However, management

principles not universally applicable. But are to be modified according to the needs of situation.

Management is Goal Oriented: Management is goal oriented every organization tries to fulfill
its own goals. For reaching its goals it requires efficient management.

IMPORTANCE OF MANAGEMENT:
Management plays a unique role in modern society. It regulates our productive activities by
organizing factors of production. A business which has all the resources like men, money,
material, and machinery cannot satisfy customers unless they are efficiently managed. Thus,
every business needs repeated stimulus which can only be provided by management. The
following points further highlight the significance of management.

Management has been important to the daily lives of people in groups since long. Therefore, a
question is raised that if the management has been so important for human lives, that is why it
has assumed added importance in present day society.

Effective Utilization of Resources: Management tries to make effective utilization of various

resources. The resources are scarce in nature and to meet the demand of the society, their
contribution should be maximum for the general interests of the society. Management not only
decides in which alternative a particular resource should be used, but also takes action to
utilize it in that alternative in the best way.

To Incorporative Innovations: Today, changes are occurring at very fast rate in both
technology and social process and structure. These changes need to be incorporated to keep the
organizations alive and efficient. Business organizations are moving from primitive to
sophistication. Therefore, they required high degree of specialization, high level of competence,
and complex technology. All these require efficient management so that organizations work in
the most efficient way.

Integrating Various Interests Groups: In the organized efforts, there are various interests’
groups and they put pressure over other groups for maximum share in the combined output. For
example, in the case of business organization, there are various pressure groups such as
shareholders, employees, government etc. These interests have pressure on an organization. In a
more advanced and complex society, much more such pressure is on the organization.
Management must balance these pressures from various interests’ groups.

Achieving of objectives: It is the management which makes optimum utilization of various

resources such as land, lab our, capital and enterprise. “No ideology, no ism, no political theory
can win greater output with fewer efforts, only sound management.”

Meeting challenges: All the policy decisions of an enterprise are taken by the management. It
keeps in touch with the current environment and predicts what is going to happen in future.
Through better planning and control, management steers a concern to meet the demands of the
changing environment.

Smooth running of business: Management helps in smooth running of business through better
planning and control.
Establishes Sound Organization: No overlapping of efforts (smooth and coordinated
functions). To establish sound organizational structure is one of the objectives of management
which is in tune with objective of organization and for fulfillment of this, it establishes effective
authority & responsibility relationship i.e. who is accountable to whom, who can give
instructions to whom, who are superiors & who are subordinates. Management fills up various
positions with right peers.

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. It
increases the profit which is beneficial to business and society will get maximum output at
minimum cost by creating employment opportunities which generate income in hand sons,
having right skills, training, and qualification. All jobs should be cleared to everyone.
Organization comes with new products and researchers beneficial for society.

FUNCTIONS OF MANAGEMENT

Management is a dynamic process consisting of several actions or activities or elements. The

activities or elements which every manager must perform are known as the Functions of
management. These management functions have been classified by different experts.

Henry Fayol - The Father of modern management theory, have listed the management functions
as—

Planning Organizing commanding coordinating and controlling.

His classification of functions has been widely accepted. But, Staffing, which Fayol has ignored,
has now come to be recognized as an important managerial function.

Koontz and O’Donnell: Have classified Managerial functions are classified into five groups of
activities of Planning, Organizing, Staffing, Directing and Controlling.

Luther Gullick: has given a catch word “POSDCORB” for functions of management.

“P” means Planning, “O” means organizing, “S” means Staffing, “D” means Directing,

“Co” means Controlling, “R” means Reporting, “B” means Budgeting.

Most of the modern authors agree with this view. Thus, the functions of the management may be
classified as following.
 Functions Organizational
Subordinates
Manager
Planning Efficiency

Organizing

Staffing

Directing

Controlling

PLANNING:

Planning is the process of “thinking before doing.” It is determination of goals, as well as

activities required undertaken to achieve the goals. Planning consists of selecting the various
organizational goals, policies, programs, procedure, and other means of achieving the goals.

Planning means it is a future course of action. It is present thinking about the future action.
Planning consisting of designing in advance
 What is to be done in the future; (i.e., determination of future objective)
 How it is to be done (i.e., determination of means to achieve the objective)
 Where it is to be done;
 When it is to be done;
 By whom it is done;

Planning process consists of following steps:

 Forecasting after the appraisal of internal and external environment;

 Establishment of planning premises;
 Development of alternative course of action;
 Evaluation of each alternative courses of action;
 Making choice among the alternatives;
 Formulation of medium and short-range plans;
 Making arrangements for effective implementation of plans;
 Review of existing plans;
ORGANIZING:

As a function of management, the term “organizing” refers to the process of---

a) Bringing together human and non- human resources, like materials, machines, and money
b) Defining and establishing authority- responsibility relationships for the achievement of
goals.
The outcome of organization process is creation of “organization structure and to establish the
relations among the organizational people to work for the achievement of organizational goals”.

The organization process consists of following activities:

a. Identifying the activities involved in achieving the objectives.

b. Grouping the activities.
c. Assigning the activities to employees.
d. Delegation of authority to carry out the activities
e. Integration of group activities.

STAFFING:

The Managerial function of staffing involves manning the organizational structure through
proper and effective selection; appraisal and development of personnel to fill the role designed in
the structure.” staffing is a process of filing all positions in the organization with adequate and
qualified personnel.” It is a managerial function of attracting, acquiring, activating, developing,
and maintaining, human resources for achieving organizational goals efficiently.

Staffing includes well recognized activities as follows Human resource planning, recruitment,
selection, training, placement and orientation, training and development, Performance appraisal,
motivation, promotion and transfer, remuneration, of employees etc.

DIRECTING:

According to Drucker “directing is a process that activates the organizational members to work
efficiently and effectively for the attainment of organizational objectives”. Directing is a process
of issuing orders and instructions to guide and teach in the subordinates the proper methods of
work and ensuring that a perform their jobs as planned.

(a)Leading: It is a decisive function of the management in which the workers/employees are led
and directed so that the objectives of the organization will be successfully achieved. it is quite
likely that the workers willingly and enthusiastically perform their job, if they like their leader.
(b)Motivating: The process of stimulating the employees to perform more effectively using their
abilities and full potential is called motivating. The employee gets stimulated when his social and
physiological needs are met, in the process of contributing to the organizational goals.

(c)Communicating: It is the process of creating, transmitting, and interpreting messages, ideas,

facts, opinions, and feelings. The vital function of the manager is to communicate to his staff as
to what they should do through order, meetings, circulars, and notices.

(d)Coordinating: Organization structure provides for division of labor. This calls for linking the
different parts of the organization in terms of performance to help achieve the given goals.
Coordination refers to the process of arranging group efforts in such a way that the common
purpose is achieved effectively and efficiently.

CONTROLLING:

Controlling is the process of checking actual performance against the agreed standards with a
view to ensuring satisfactory performance. Controlling is the last function of management.
Planning is identifying the activities whereas controlling is regulating that activities.

Controlling activities involves

(a) Measuring the actual performance of the employee,
(b) Comparing it with the target, and
(c) Taking follows up action, that is, corrective or remedial action for improving the
performance, if necessary.

EVOLUTION OF MANAGEMENT THOUGHT:

INTRODUCTION:
The recorded use of organized management dates to 5000 B.C. when the agricultural revolution
had taken place. These agricultural civilizations existed in India, China and Egypt According to
Peter Drucker these irrigation civilizations "were not only one of the great ages of technology,
but it represented also mankind ‘s most productive age of social and political innovation". As the
villages grew and civilizations evolved, the managers too grew and evolved. They became the
priests, the kings, the ministers holding power and wealth in the society. Written documents
found in the Sumerian civilization which flourished some 5000 years ago, contains evidence of
management control practices.

As early as 4000 B.C., the Egyptians were aware of the importance of planning, organizing, and
controlling. The huge pyramids of Egypt stand a mute testimony to the managerial and
organizational abilities of the ancient Egyptian civilization. One pyramid required 1,00,000 men
working for 20 years, covering 13 acres, using 2.3 million blocks, each weighing an average of
2.5 tons. To produce such a monument required proper planning, work allocation, organizing,
directing, controlling and decision making.

In the Grecian civilization we find the origin of the Scientific Method in the famous Socratic
discourses. The Romans who built a vast empire extending from Britain in the west to Syria in
the east ruled it for many years only because of their superior and advanced managerial abilities.
In ancient India Kautilya wrote his Artha shastra in about 321 B.C. the major theme of which
was political, social, and economic management of the State. The study of administration of the
cities of Mohenjo-Daro and Harappa of the ancient Aryans in 2000 B. C., Buddha's order, and
the Sangha in 530 B. C., provide evidence about the use of the principles of management. During
the 13th and 14th centuries AD the large trading houses of Italy needed a means of keeping
records of their business transactions. To satisfy their needs Luca Pacioli published a treatise in
1494 describing the Double Entry System of Book-keeping for the first time.

Management thought is an evolutionary concept. New theories and principles were suggested
along with new developments in the business field. The new thoughts supplemented the existing
thoughts and theories. This is how developments are taking place continuously regarding
management thoughts/theories. Management thinkers and thinkers from other fields such as
economics, psychology, sociology, and mathematics have also made their contribution in the
evolution of management thought.

This evolution of management thought can be studied in the following broad stages:
It is rather difficult to state the exact period of each stage in the evolution of management
thought. Experts, in general, agree with the following period for each thought/school.

a. Classical School/thought: 1900 to 1930.

b. Neo-classical School/thought: 1930 to 1960.
c. Modern School/thought: 1960 onwards.

The development of management thought is the result of contributions made by pioneering

management thinkers and experts from other social sciences such as economics and psychology
 Evolution of management thought

Classical Management Era Neo- classical Management Era Modern Management

Era
Scientific management
Human relation school Decision making school
school

Administrative Quantitative school

management
Behavioral management
school. Systems approach
Bureaucracy management

Contingency approach

The Classical Theory of Management:

Scientific Management:

Fredrick Winslow Taylor, an engineer, proposed and developed the Scientific Management
Theory. He is also known as the Father of Scientific Management and his school of thought
came to be known as Taylorism. He introduced a scientific approach to productivity, which
meant that an increase in efficiency can lead to higher productivity and profits. He believed that
research-backed and standardized procedures were necessary for effective management.

Administrative Management:

Henry Fayol, a French mining engineer, laid down five functions and 14 principles of
management under the theory of Fayolism. This gave way to the school of administrative
management. He believed that these functions and principles can guide managers to fulfill their
responsibilities effectively and they should have the liberty to determine how to use them.
Bureaucratic Management:

A bureaucratic theory introduced by Max Weber includes two essential elements, including
structuring an organization into a hierarchy and having a clearly defined role to help administer
an organization and its members. A German Sociologist, Max Weber, described a theory to
operate an organization effectively which is known as the Bureaucratic management approach or
Weberian Bureaucracy.

Bureaucratic organizations evolved from traditional structures due to the following changes:

 In traditional structures, the leader delegates duties and can change them at any time.
However, over time, this changed and there was a clear specification of jurisdiction areas
along with a distribution of activities as official duties.

 In a bureaucratic organization, the subordinates follow the order of superiors but can
appeal if they feel the need. On the other hand, in the traditional structure, the authority
was disseminated.

 The rules are detailed, stable, and can be easily understood by employees. Additionally,
the company registers them in permanent archives.

 Personal property is distinct from property in the workplace. The means of production or
administration, therefore, belong to the bureau.

 The selection of officials shall be based on professional qualification and appointment

and shall not be based on an election. In addition, for their service, officials receive a
salary as compensation.

 The official is hired for a trial period and then offered a permanent position with the
organization. This protects him from arbitrary discharge.

The Neo-classical theory of Management:

Human Relations Management:

Developed by Elton Mayo, an Australian psychologist, the Human Relations Theory of

Management was proposed after a series of experiments, also known as Hawthorne Studies or
Hawthorne Experiments. This theory emerged as a response to the criticism faced by the
classical management theories, where social factors such as human behavior and attitudes were
not considered important.

Behavioral Management

Behavioral approaches to management set the pace for how modern workplaces build an
employee-friendly culture. Abraham Maslow, an American psychologist, proposed the hierarchy
of need, where employee need and expectations were prioritized. The theory suggests that human
relations and behavior are essential in driving efficiency in teams and managing the workforce
successfully.

The Modern Theory of Management:

Decision Theory School

Major contribution of this school of thought has come from Simon. Other contributors are: Cyert,
March, Forrester, etc. The emphasis of this school is that decision making is the job of every
manager. In other words, manager is a decision-maker while organization is a decision-making
unit. Rational decisions are required to be made for achieving the goal. According to L.M.
Prasad and G. Edward Evans, ‘Decision- Theory School’ has the following features:

 Management is essentially for decision making;

 The members of the organization are decision-makers and problem solvers;
 Organizations can be treated as a combination of various decision centres. The level and
importance of organizational members are determined based on importance of decision
which they must make;
 Quality of decisions affect the organizational effectiveness; and
 All factors effecting decision-making are the subject matter of study of management.
Besides processes and techniques involved in decision-making, other factors affecting the
decisions are: information system, social and psychological aspects of decision makers.
Thus, it covers the entire range of human activities.

The Decision-Theory School has provided management and the library managers, with a very
useful means for developing techniques to be used to identify and then attack the problems
systematically. This school of thought is applicable in all types of organizations even today.

Quantitative Approach

The quantitative approach applies statistics, optimization models, information models, computer
simulations, and other quantitative techniques to the management process. Central to the
quantitative approach is the principle that organizations are decision-making units. These decision-
making units can be made more efficiently using mathematical models that place relevant factors into
numerical terms.

Systems Approach

The Systems Theory of organization has its roots in biology and systems science. This concept
broke away from classical management theory that viewed organizations as machines and moved
toward a more holistic view that sees them as networks of people, procedures, and activities.
Systems Theory allows for an understanding of the connections between various parts of the
organization and how they interact with one another.

Contingency Approach

The Contingency Management Theory suggests that there is not any perfect way to organize a
business or corporation. The optimal solution lies in the situation that an organization operates
in. A business is contingent (depends) upon internal or external environments.

SCIENTIFIC MANAGEMENT

The concept of scientific management was introduced by Fredrick Winslow Taylor in USA in
the beginning of 20th century. Taylor joined Midvale steel company in USA as a worker and later
became supervisor. During this period, he continued his studies and eventually completed his
M.E master of engineering in 1883. Later he joined Bethlehem steel company. At both these
places he carried experiments about how to increase the efficiency of people. All his
contributions were compiled in his book “Scientific Management.”

The term scientific management contains two words--scientific and management.

Scientific means systematic, analytical, and objective approach, but management means getting
things done through others

F.W. Taylor has defined scientific management as

“Scientific Management is concerned with knowing exactly what you want men to do and then
see in that they do it in the best and cheapest way.”

Since Taylor has put the emphasis on solving managerial problems in scientific way. Hence he is
called as Father of scientific management.

PRINCIPLES OF SCIENTIFIC MANAGEMENT:

Taylor’s scientific management is based on the following principles:

Replacement of old rule of thumb method: The substitution of rule of thumb by scientific
approach is one of the chief contributions of Taylor. Under scientific approach, decisions are
made based on facts as developed by the application of scientific method to the problem
concerned. The scientific methods consist of research and experimentation, collection of data,
analysis of data and formulation of certain principles based on such analysis.

Scientific selection and training: The selection of the right type of worker for the right job is
very significant. Under scientific management, the task of selection is entrusted to a central
personnel department. Then the selected workers are trained to teach the right methods of work.
Labor-management cooperation: Cooperation between labor and management maybe regarded
as the pedestal on which the structure of scientific management can be built. This can achieve
through a change in the mental attitudes of the workers and the management towards each other.
Taylor called it mental revolution.

Maximum output: The management and worker should try to achieve maximum output. This
will prove highly beneficial and useful to workers, management, and society at large.

Equal division of responsibility: If management is responsible for planning and organizing, the
workers are responsible for the execution of work as per the instructions of management. This
principle is known as “equal division of responsibility.”

Mental Revolution: All the principles of scientific management will prove futile unless there is
a healthy cooperation between the workers and the employees. The idea behind the principle of
scientific management, therefore, is to change the mental attitude of the workers and employers
towards each other. Taylor called it ‘Mental Revolution.’ He wanted to bring a revolutionary
change in the mental attitude of workers and employers, mainly to accomplish the enterprise
objectives of maximum productivity and prosperity. Thus, the main aspects of mental revolution
are the following

(I) To create the spirit of mutual trust and confidence.

(II) To put in all efforts for increased production.
(III) To inculcate and develop the scientific attitudes towards problems.

TECHNIQUES OR ELEMENTS OF SCIENTIFIC MANAGEMENT:

To bring scientific management into practice, Taylor suggested the following techniques.

Scientific Task Setting: It is essential to set the standard task of every worker through scientific
investigation. Taylor called it, a ‘proper day’s work’. While setting the standard, care is taken to
see that a correct standard is set. It should be neither more nor less than the average capacity of
the worker.

Work study: Work study means a systematic, objective, and critical examination of operational
efficiency in an organization. It eliminates wasteful and unnecessary operations, reduces efforts,
and increases productivity. The main aspects of work study are:

i) Method study: Method study is a preliminary survey of the production process. Its object is to
know the best method of doing a job and to familiarize the investigator with the tools, methods,
and operations in process.

ii) Motion study: Motion study involves the study of the movement of a worker or a machine.
Its object is to eliminate useless and inefficient motions and to find out the best method of doing
a particular job
iii) Time study or work measurement: Time study is an art of observing and recording the time
required to do a job. It helps in fixing the standard time for doing a job under the given
conditions.

iv) Fatigue study: Workers are human beings prone to fatigue on account of over work, stress
and strain, etc. Thus, fatigue of all kinds—physical or mental—has an adverse effect on the
workers’ health and efficiency. This study helps in diminishing fatigue among the workers.

Rate setting: Positive measures should be adopted to fix wage rates in such a manner that the
average worker is induced to attain the standard. For this purpose, Taylor recommended the
differential piece rate system. Under this system, the standard daily output of a worker is fixed
and there are two-piece rates. Workers who perform the standard task in the prescribed time are
paid a much higher rate per unit. Taylor was of the view that first-class men should be paid from
30 per cent to 100 per cent more than the average workers

Planning the task: After setting the task of an average worker, the next step is to plan the
production. Taylor advocated that the planning function should be separated from the executive
function. The planning department should prepare detailed instructions and the information
relating to the type, shape, and quality of products to be produced. Workers should not be
allowed to choose their own methods and decide what they must do.

Specialization: Specialization is a kind of division of labor. Taylor recommended functional

foremanship even at the shop floor level. Under this scheme, an operator is under as many as
eight foremen- four belonging to the shop and four to the office work. The foremen to operate at
the office level are:

(I) Time and Cost Clerk-- to lay down standard time for completion of the work and to
make calculations in respect of the work.
 (II) Instruction Card Clerk—to lay down the exact method of doing the work.Route

Clerk—to lay down the route through which the productive process shall pass to
completion.

Figure shows the Taylor’s functional foremanship

IV) Disciplinarian—to deal with the cases of discipline and absenteeism.

The foremen at the shop level are:

(I) Gang Boss—to assemble and set up machines and tools for a particular job.
(II) Speed Boss—to determine the appropriate speed to run the machine.
(III) Repair Boss—the foreman responsible for keeping the machines and equipment in
working order.
(IV) Inspector—to check quality functional foremanship.

Criticisms of scientific Management:

Taylor’s scientific management was criticized by the workers, managers, psychologists, and the
public at large. The various grounds of criticism are as follows

1. The concept of functional foremanship is not feasible in practice as it violates the

principle of unity of command
 2. Taylor’s is confined mostly to production management and fully ignores the areas of
finance, marketing, accounting, and personnel.
3. To use of the word ‘Scientific’ before ‘Management’ is objected to because what is meant
by scientific management is nothing but a scientific approach to management.
4. Trade unionists object to it as the wages of the workers are not increased in direct
proportion to the increase in productivity.
Despite the criticism many of the recommendations are still being applied by modern business
undertakings.

PRINCIPLES OF MANAGEMENT

Fayol has given fourteen principles of management. He has made distinction between
management principles and management elements. While management principle is a
fundamental truth and establishes cause effect relationship, management element denotes the
function performed by manager. While giving the management principles, Fayol has emphasized
two things:

1. The list of management principles is not exhaustive but suggestive and has discussed only
those principles which he followed on most occasions.

2. principles of management are not rigid but flexible. according to him,” there is nothing rigid
or absolute in management affairs; it is all a question of proportion.

Therefore, principles are flexible and capable of being adapting to every need. It is a matter of
knowing how to make use of them which is a difficult art requiring intelligence, experience, and
proportion.” Various principles of management are as follows:

Division of work: It refers to the division of work among various individuals in the organization
to bring about specialization in every activity. Specialization tends to increase efficiency and
help to avoid waste of time and effort caused by changes from one work to another.

Authority and Responsibility: Authority is the power to give order to the subordinates.
Responsibility means the duty which the subordinates are expected to perform. Fayol suggested
that authority and responsibility should go hand in hand. Authority without responsibility
promotes irresponsible behavior on the part of management. Similarly, responsibility without
authority makes management ineffective. Thus, there should be parity between authority and
responsibility.

Discipline: Discipline is highly essential for the smooth running of the organization. It means
obedience to rules and regulations of the organization. Maintenance of discipline in the
organization depends upon the quality of leadership, clear and fair agreement and so on.
Unity of command: An employee should receive orders from one superior only for action or
activity. This principle is necessary to avoid confusion and conflict. Besides, when there is unity
of command it is easy to fix responsibility for mistakes. If this principle is violated, authority will
be undermined, discipline will be jeopardy, order will be disturbed and stability will be
threatened.

Unity of direction: The principle of unity of direction states that for a group of activity having
the same objective. There should be one head and one plan. It alone can produce a sense of
loyalty and devotion among the employees.

Subordinates of individual interest to general interest: Common interest is above the

individual interest. Individual interest must be subordinate to general interest when there is
conflict between these two. So, management should make sure that individual’s goals and
objectives are always matching to the organization goals and objectives. Management should
take proper care about the individual interest and motivate the subordinates towards group
interest and group cause.

Remuneration of personnel: The remuneration of employees should be fair and just.

Employees who are paid decent wages will have high morals.

Centralization: Centralization refers to the concentration of authority at one level in the

organization. On the other hand, decentralization is the dispersal of authority to the lower levels
in the organization. The degree of centralization may be different in various organizations in
various cases. But a balance should be maintained between centralization and decentralization to
ensure the best results.

Scalar chain: Scalar chain refers to the chain of superiors ranging from the final authority to the
lowest level in the concern. Scalar chain states superior – subordinate relationship throughout the
concern. It is highly essential to ensure unity of command and effective communication in
organization. A

B L
C M
D N
E O

F P

Information flow from A to B, B to C and so on and vice versa.

A is superior to B; B is superior to C and so on.
B –L, C-M, D-N, E-O, F-P are peer groups.

Order: This principle implies “right man inn right place”. Fayol said there should be place for
everything and everyone. The management should get order in work through suitable
arrangement of men and materials.

Equity: It means justice and kindness. Management should practice equity and equality of
treatment while dealing with the people. Equity ensures healthy industrial relations between
management and employee. It brings loyalty in organization.

Stability of tenure: No employee should be removed within short time. There should be
reasonable security of jobs. Stability of tenure is essential to get an employee accustomed to new
work and succeed in doing it well. Unnecessary turn over is both cause and effect of bad
management.

Initiative: With in the limits of the authority and discipline, managers should encourage their
employees for taking initiative. Initiative increases zeal and energy on the part of human being.
Esprite de Corps: This is the principle of “union is strength” and extension of the unity of
command for establishing team work. The manager should encourage esprite de corps among the
employees.

THEORIES OF MOTIVATION

There are mainly three motivational theories. They are as follows:

MASLOWS NEED – HIERARCHY THEORY OF MOTIVATION:

All people have a variety of needs. At any given time, some of these needs are satisfied and
others are unsatisfied. An unsatisfied need to the starting point in the motivation process it begins
the changing of events leading to behavior when a person has an unsatisfied, need, how he or she
attempts to identify something that will satisfy the need.

Probably the most widely known theory of individual need and motivation comes from
Abraham Maslow who was a clinical psychologist in U.S.A., Maslow. Maslow stated that
people have five basic levels of needs which they tend to satisfy in a hierarchical fashion. He
proposed that human needs can be arranged in a particular order from lowest level need to the
highest-level need.

This hierarchy of human needs is as shown in following figure:

SELF ACTUALIZATION
Maslow’s
(Personal growth and fulfillment) Needs
Hierarchy
ESTEEM NEEDS
(Achievement, status, responsibility, reputation.)

SOCIAL / BELONGING NEEDS

(Family, affection, relationships, work groups etc.,)

SAFETY NEEDS (protection, security, order, law, limits, stability.)

BIOLOGOCAL AND PHYSIOLOGICAL NEEDS (Basic life needs- air, food, drink, shelter,
warmth, sleep, etc.,
 1. Physiological needs:

physiological needs are those which arise out of basic physiology of life, for example,
the need for food, water, air etc. these are essential for the very survival of any human
being.

2. Security needs:

These needs are to feel from economic threat and physical harm. They include, safety
against physical dangers like fire, accidents etc. and economic security against
unemployment, old age, sickness, disability etc.

3. Social needs:
These are needed to associate with other people and be accepted by them to love and to
be loved. Affection, friendship, belongings, or association with family, friends, and other
groups of people, also fall part of social needs. Man finds a great satisfaction when these
needs are fulfilled and feel deprived of when it is not possible.

4. Esteem needs:

These relate to the social status and prestige. A need for dominance also is a kind of
esteem needs. They imply needs for independence, self-confidence, recognition, and
achievements etc.

5. Self-actualization needs:

Needs to ones full potentiality i,e; like desire to become what one is capable of becoming
the need to be creative and to experience continuous self-development.

The above-mentioned needs are arranged in a hierarchy of importance. Out of them, the
physiological and safety needs are considered as basic or primary as they are to be
satisfied first.

Maslow suggested the following points:

 There are five levels of needs.

 All these needs are arranged in a hierarchy.
 A satisfied need is no longer a need. Once a need or a certain order of need is
satisfied its ceases to be a motivating factor.
 Once one level of need is satisfied, the next level of need will emerge as the
depressed needs seeking to be satisfied.
  The physiological and security needs are finite but the needs of higher order
infinite and are likely to be dominant in persons at higher levels in the
organization.
 Maslow suggests that various levels are interdependent and overlapping. Each
higher level emerging before the lower-level need has been completely satisfied.
Even though a need is satisfied it will influence behavior because of
interdependent and overlapping characteristics of needs.

CRITICISMS:

 There is no proof that every individual has the capacity to achieve the self-actualization.

DOUGLAS MC GREGOR’S THEORY X AND THEORY Y

Introduction:

The management’s action of motivating human beings in the organization according to

McGregor, involves certain assumptions, generalizations, and hypothesis relating to human
behavior and human nature. Douglas Mc Gregor divides leadership in two styles labeled theory
‘X’ and theory ‘y.’ The traditional style of leadership and controls, stated in theory ‘X’ by Mc
Gregor is exercised to managers based on his assumptions about human beings.

McGregor has characterized these assumptions in two opposite functions-Theory X and Theory
Y.

Theory X: This is the traditional theory of human behavior. In this theory, McGregor has certain
assumptions about human behavior. These assumptions as laid down or observed by Mc Gregor
for theory X are:

 Management is responsible for organizing the elements of productive enterprises-money,

materials, equipment; people-in all interest of economic ends.
 With respect to people, this is a process of directing their efforts, motivating them,
controlling their actions modifying their behavior to needs of organization.
 The average man is by nature indolent he works as little as possible.
 He lacks ambition, dislikes responsibility prefers to be led.
 He is inherently self-centered, indifferent to organizational needs.
 He is, by nature, resistant to change.
 They do not show up any ambition but always seek security.

Theory Y: The assumptions of theory Y are described by McGregor in the following words:

 Some employees consider work as natural as play or rest.

  These employees can directing & control performance on their own. They are much
committed to the objectives of organization.
 Higher rewards make these employees more committed to organization.
 Given an opportunity, they not only accept responsibility but also look for opportunity to
outperform others.
 Most of them are highly imaginative, creative & display ingenuities in handling original
issues.

Comparison of theories X and Y

Both theories have certain assumptions about human nature. In fact, they are reverse sides of a
coin, one representing a head and other represents a tail. Thus, these assumptions seem to be
mutually exclusive. The difference between two sets of assumptions can be visualized
as follows:

THEORY X THEORY Y

1. It assumes human beings to be inherently 1. It assumes that for human beings’ work is
distasteful towards work. as natural as play.

2. Its emphasis that people do not have ambitions 2. The assumptions of theory Y are just
and try to avoid responsibilities in jobs. reverse.

3. Most people have little capacity for creativity. 3. The capacity for creativity is widely
distributed in the population.

4. Higher order needs are more important

4.Motivation factors are the lower needs for motivation though unsatisfied lower
needs are also important.
5.people lack self-motivation and require to be
externally controlled and closely supervised to get 5. People are self –directed and creative and
max output from them prefer self-control.

6. Its emphasis scalar chain system and 6. Its emphasis decentralization and greater
centralization of authority in the organization. participation in the decision-making
process.
7. Its emphasis autocratic leadership.
7. Its emphasis democratic and supportive
leadership.
HERZBERG’S MOTIVATION-HYGIENE THEORY OR TWO FACTOR THEORY

Fredrick Herzberg and his associates developed the motivation hygienic theory, commonly
known as the two-factor theory in the late 1950s and early 1960’s. Herzberg and his associates
conducted a research based on the interview of 200 engineers and accountants who looked for 11
different firms in Pittsburg area, USA.

Based upon the answers received from these 200 people herbs conclude that there are certain
factors that tend to be consistently related to job satisfaction and on the other hand, there are
some factors, which are consistently related to job dissatisfaction. The last of job conditions, he
referred to as maintenance job dissatisfaction. The last of job conditions, he referred to as
motivational or hygiene factors.

The motivational factors are intrinsic in nature and the hygiene factors are extrinsic in nature.
These two factors are described in detail as follows:

1. Hygiene factors:

Hygiene factors or the maintenance factors do not motivate people, they simply
prevent dissatisfaction. If these factors are not there it will lead to job dissatisfaction.
In other words, these factors do not provide any satisfaction but
eliminate dissatisfaction. According to Herzberg there are ten maintenance or
hygiene factors:

 Company policy & administration

 Technical supervision
 Inter-personal relations with supervisor
 Inter-personal relations with peer.
 Inter-personal relations with subordinates
 Salary
 Job security
 Personal life
 Working conditions
 Status

The word hygiene is taken from the medical science, where it means taking preventions to
maintain your health but not necessarily improve it. Similarly, hygiene factors in this theory
prevent damage to efficiency but do not encourage growth. As such, these are also called
dissatisfies.
 2. Motivational factors:

These factors are intrinsic in nature and are related to job. The motivational factors
have a positive effect on job satisfaction and often result in an increase in total
output. Thus, these factors have a positive influence on morale, satisfaction,
efficiency, and productivity. Herzberg concluded that six factors the employee:

 Achievement
 Advancement
 Possibility of growth
 Recognition
 Work itself
 Responsibility

Any increase in these factors will improve the level of satisfaction thus these factors can be used
for motivating the employees.

He further concluded that today’s motivational; factors are tomorrow’s hygiene factors. Because
once a need is satisfied, it stops influencing the behavior. Further, one person’s hygiene may be
another person’s motivator, because motivation is also influenced by the personality characters
of individuals.

LEADERSHIP STYLES:

A leader is someone who directs and guides others in a team. A leader directs and motivates the
team members’ efforts by influencing their activities. The leadership style refers to the way a
leader acts while trying to accomplish an objective through others. The leader’s personality,
skills, business values, and environment determine the leader’s leadership style. When it comes
to authority, there are three major leadership styles:

 Authoritative Leadership (Autocratic)

 Participative Leadership (Democratic)
 Delegative Leadership (Free Rein)

Authoritative Leadership (Autocratic)

When the leader has all the authority and power, it is called autocratic leadership. Subordinates
do not participate. The leader has complete authority and takes responsibility. The leader alone
determines planning, policy, and other operational procedures. They organize the entire
workplace environment, and they want the staff to work their instructions without question. An
autocratic leader believes in and practices authoritarian leadership.
Features

 They take their decisions and overlook others’ opinions.

 They have complete control over how they lead the members.
 They are very strict when it comes to rewards and punishments. Autocratic leadership
relies on negatively affecting practices.
 They do not provide complete information to the subordinates.
 They carefully specify each task and set strict work standards for their subordinates. This
implies that subordinates are obligated to perform specific tasks assigned to them.

Advantages

 It is beneficial in an emergency or during a war.

 It works better when the workers are not organized.
 There is no requirement for skilled work. Untrained workers can utilize it.
 It is a quick way to make decisions because one individual decides on behalf of the entire
group.

Disadvantages

 In an autocratic style of leadership, subordinates are excluded from decision-making.

 It places little emphasis on the proper appraisal of an employee’s performance.
 Employee morale is low.
 There is no opportunity for management advancement.
 Autocratic leadership is unsuitable for innovative ideas and ways of thinking.
 Negative motivation forces the workforce to do their tasks.

Participative Leadership (Democratic)

When authority and decision-making rights are decentralized to subordinates, this is called
democratic leadership. Subordinates take an active role in the process. The leader and the
subordinates work together to develop and implement plans, policies, and other operational
procedures. They organize the entire workplace democratically.

Features

 A democratic leader delegates authority according to the employee’s capacity.

 All subordinates participate in decision-making.
 The importance of human values is also considered.
 A democratic leader enforces flexible work standards and sets goals for work
performance.
 A democratic leader places greater emphasis on results rather than on action.
Advantages

 Effective communication among individuals is emphasized.

 Staff members are delighted, and their morale has improved.
 The importance of human efforts is very well-recognized.
 It increases productivity.
 There are more ideas for policies, planning, and other operational procedures when
different logical and creative ideas are mixed.
 Subordinates gain substantial freedom of action, which aids in personal development and
provides an excellent opportunity to maximize their strengths.

Disadvantages

 It takes a long time to decide.

 It is not appropriate for untrained subordinates.
 It is not appropriate if the followers are unskilled and lacking in discipline.
Delegative leadership (Free Rein)

When full authority and accountability are transferred to subordinates, this style of leadership is
referred to as free rein. The leader who adheres to this philosophy is a free rein leader. The free
rein leadership delegates authority to subordinates. As a result, the leader does not contribute to
planning or policymaking. This leadership style is quite effective when all members are
conscious of their positions and obligations.

Features

 Subordinates have complete decision-making authority.

 They are self-motivated and self-controlled.
 The free-rein leader provides staff with resources, tools, and information.
 There is no involvement from the leader in developing plans and policies.

Advantages

 Staff members are comfortable with their work because they have decision-making
authority.
 The work environment is developed.
 As a result of the abundance of opportunities for professional growth, the workforce is
well-versed in the field.
 The subordinate’s ideas and skills are fully utilized.

Disadvantages

 Leaders’ contributions are ignored.

 Subordinates are not always self-directed in their actions.
 The leader’s directives should not be communicated to the subordinates.

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