Management Principles and

Organizational Behavior
UNIT-1
Meaning & Nature of
Management
 Learning Objectives

• Meaning of Management
• Management as a Process
• Levels of Management
• Managerial Skills
• Qualities of a Successful Managers
• Responsibilities and Roles of a Managers
 Meaning & Nature of Management
• In the modern world, one should utilize economically &
efficiently, resources of all kinds- human, physical,
technological, financial, intangible etc.
• Management plays a catalytic role in optimizing the
use of these resources.
• The people who manage the resources in organization
is known as Manager.
• The knowledge, skills, techniques and practices; they
use in managing are broadly referred to the Field of
Management.
 Meaning & Nature of Management [Contd..]

• Management is a broad field as it is an attempt to create a

desirable future, keeping the past and present in Mind.
• Thus Management is the process that unifies various
resources together and co-ordinate them to help accomplish
the organizational goal.
 Definitions of Management
Definitions can be categorized on the basis of:
1. Art of Getting Things Done:
• The Term Management refers to the process of getting things
done, effectively and efficiently, through and with people.
• It is also the art of creating friendly environment in which people
can perform as individuals and yet cooperate towards achievement
of group and organizational goal.
• The primary job of management is to convert the disorganized
resources of men, money, machines, methods and materials into
a productive organization.
• Management is the practice of continually shaping organizations.
 Definitions of Management [Contd…]
2. Process of Managing:
• Management is called a PROCESS as it involves a series of
functions as shown:
• This process consists of planning, organizing, staffing,
directing and controlling.

• It utilizes both human and other resources.

• It leads to accomplishment of predetermined objectives.

• It starts with planning and ends with controlling but they

always do not maintain a rigid sequence.
• A practical manager performs all the functions
simultaneously as management is a never ending process
Contd…..
 Definitions of Management [Contd…]
3. Management as a group of Team/ Managers:
• Management is a group or team of managers who together
carry out various managerial activities in the form of
POSDC.
• It includes all managers from CEO to the first line
supervisors.
• Practically, the term management is used to indicate only the
TOP MANAGEMENT that has the authority for making
important decisions like introduction of a new product, issue
of shares, joint venture with MNCs etc.
 Definitions of Management [Contd…]

4. Management as a Discipline or Field of study:

Management is the organized body of knowledge which
can be learnt in business schools & Institutes which
consists of principles, practices, techniques and skills
of management that help in achieving organizational
objectives.
 Management Systems and Processes

• Management is regarded as an Integrating Process

as it integrates all human efforts with non-human
resources like materials, machines, methods, money
etc. by their concerted efforts.

• Management is regarded as a Social Process as

every manager is required to use various skills of
human relations to achieve good relations with the
various groups of stakeholders like shareholders,
workers, consumers, government, suppliers etc.

• A process is a systematic way of doing things.

 Management Systems and Processes
DEFINITION:
•F.W. Taylor -“Art of knowing what you want to do and then
seeing that it is done the best and cheapest way”.

•Henry Fayol –“To Manage is to forecast, to plan, to organize,

to command, to co-ordinate and to control”.

•Peter F.Drucker –”Management is work and as such it has its

own skills, its own tools and its own techniques”.

•“Management is the art of getting things done through and

with people”.
 Nature of Management
• Goal oriented
• Various process
• Result through others
• A science and an art
• System of authority
• Universal application
• Is a Process /a function.
• Is a Social Process.
• Involves Group Effort.
• Required at all levels of management
• Is a Profession
 Contd…..
Multi-disciplinary subject
Economics,maths, psychology, sociology, history, etc. Management
integrates the ideas and concepts taken from these disciplines and
presents newer concepts which can be put into practice for managing the
organizations.
1.Psychology: Includes determinants of behavior in the form of
personality, perception, attitude, learning, motivation etc.
2.Sociology:
Focuses attention on behavior of groups, organization and societies rather
than individuals.
3.Anthropology: Its studies include individual culture, organizational
culture and external environment.
• The scientific study of the origin and behavior of man, including the
development of societies and cultures.
• Ex decision making in USA VS India
• Confidence level in developed vs under developed country
 MANAGEMENT IS AN ART
MANAGEMENT IS AN ART AND SCIENCE
Art : the use of skills to bring a desired result.
• Practical knowledge
• Personalized Application of Knowledge
• Improvement through Continuous Practice
• Situational Application
• Emphasis on Creativity
 MANAGEMENT IS A SCIENCE
MANGEMENT IS AN ART AND SCIENCE ART
Science
•Experiential Derived
•Critically tested
•General principles
•Cause and effect relationship
•Universal applicability
As a Science: It relies upon scientific methods for; Making
predictions about the real world.
• Determining accuracy of our predictions.
• Using the result of observations or conclusions to explain
relationships among objects, events or persons in the
real world.
Management As A Science Provides Principles And As
An Art Helps In Tackling Situations.
 Contd…..
• Management is dynamic: Management has framed
certain principles, which are flexible in nature and change
with the changes in the environment in which an
organization exits. Contingency variables.

• Relative, Not Absolute Principles: Management

principles are relative, not absolute, and they should be
applied according to the need of the organization.

• A particular management principle has different strengths in

different conditions. Therefore, principles should be
applied according to the current conditions.
 Contd…..
Objectives of management
• Determination of objectives
• Achievement of objectives
• Co-ordinate human efforts
• Meeting challenges
• Efficient use of resources
• Satisfaction of customers
• Good working conditions
• Good relationship with suppliers
• Contribution to national goals
 Management Vs. Administration
Point of Management Administration
Distinction
Nature Executive or doing Determinative or
function thinking function
Scope Concerned with Concerned with
implementation of determination of major
policies objectives and policies

Level Middle and lower level Top level function

function
Influence Mainly by objectives and Mainly by public
policies of organization opinion and outside
forces
 Cont…

Point of Management Administration

Distinction
Main function Directing and organizing Planning and control

Skills required Technical and human Conceptual and

skills human skills
 MANAGEMENT V/S ADMINISTRATION
MANAGEMENT AND ADMINISTRATION
I . No Distinction
Fayol-cannot distinguish which activities belong to
Management and which to administration .

Administration -Higher executive functions in government

public utility etc.

Management –Used for the same function in the business

sector, company, corporate.
 MANAGEMENT V/S ADMINISTRATION
MANAGEMENT AND ADMINISTRATION (American
viewpoint)- Administration Includes Management
I. Different
Administration Management
-With determination of -In the execution of
corporate policy policy
-Co-ordination of finance, -Within the limits
production and distribution -setup by
Oliver
administration.
Sheldon
-Under the control of the -Under the
commissioner, registrar, managers
Chancellors .
-Public/govt. -Private companies
 MANAGEMENT V/S ADMINISTRATION
MANAGEMENT AND ADMINISTRATION
I. Different
Administration Management

Florence & A process of thinking A process of actual

Tead more at higher levels operation.

Spriegal & -More at higher levels -Less at higher

Lansburg -Less at lower levels levels(-More at lower
levels(middle levels)
-More at lower levels
 MANAGEMENT V/S ADMINISTRATION
II. Management Includes Administration.
Brech -Management is an all wide-ranging function.
Top Management-Formulation of policy, co-
ordination, motivation of personnel.
Middle Management-Formulation of policies to a
lesser extent, co-ordination, motivation and
planning control.
Lower Management-Supervision and control of day
to day activities including administrative
procedures.
 FUNCTIONS OF MANAGEMENT
According to Luther Gulick
PODSCORB
1. Planning
2. Organizing
3. Directing
4. Staffing
5. Coordinating
6. Reporting
7. Budgeting
 FUNCTIONS OF MANAGEMENT
First Time HENRI FAYOL Suggested-
1. Forecasting and planning
2. Organizing
3. Commanding
4. Coordination
5. Control

Koontz and O’Donnell

1. Planning
2. Organizing
3. Staffing
4. Directing(Communication, Leadership, Motivation,
Supervision)
5. Controlling
FUNCTIONS OF MANAGEMENT
 FUNCTION OF MANAGEMENT
1.Planning
• Look ahead and chart out future course of operation
• Formulation of Objectives, Policies, Procedure, Rules,
Programmes and Budgets
• Setting firms goals plus the way to accomplish them
• A plan is a predetermined course of action which provides
purpose and direction of an organization.
 Basic Managerial Functions
Determining organizational goals and means to
reach them Managers plan for three
reasons.

1. Establish an overall direction for the

organization’s future
2. Identify and give resources to achieve
goals
3. Decide which tasks must be done to reach
those goals
FUNCTIONS OF MANAGEMENT
FUNCTIONS OF MANAGEMENT
 FUNCTIONS OF MANAGEMENT

3.Staffing
• Human Resource Planning(No. and kind of employee etc).
• Deciding sources of recruitment(attracting suitable
candidate, Internal / external recruitment.).
• Receiving applications.
• Testing & Interviewing.
• Final selection & Appointment letter.
• Orientation.
• Training & Development.
 FUNCTION OF MANAGEMENT
4. Directing
• Act of guiding, managing and leading people.
• Motivating employees to achieve firm’s objectives
• Motivation (inspire the employee )
• Leadership(guide and influence thee
behavior of subordinate)
• Decision making
• Supervision
• Communication (for delegation, instruction,
two-way, guide, motivate them, formal /
informal).
 Basic Managerial Functions
5. Controlling
1.Gather information that measures
recent performance
2. Compare present performance to
pre-established standards
3. Determine modifications to meet pre-
established standard

•Establishment of standard
•Measurement of performance
•Appraisal of performance
•Taking corrective action
 WHAT A MANAGER DOES?

Leadership(guide and influence the behavior of subordinate)

 Levels of Management
•No of level more if size of the business increase or large
•Level should be min otherwise it will create problem.
•Because communication process, controlling,
coordination will be challenge to managers.

Top
Top
Managers
Managers
MiddleManagers
Middle Managers
First-LineManagers
First-Line Managers
Non-managers
Non-managers
 Organizational Level
Responsibility Title/Desigination

vice president/president/chancellor/
Making decisions about the direction
chief operating officer/
of the organization and establishing
chief executive officer/
policies that affect all organizational
Top chairperson of the board
members.
managers
Translating the goals set by top Department or agency head/
management into specific details Middle-line project leader/ unit chief/
that lower-level managers can managers /dean/division manager
perform
Directing the day-to-day First-line managers supervisors
activities of operatives
Operatives
Levels of Management
Levels of Management
Levels of Management
Levels of Management
 Basic Levels of management
Top Managers
Chief Executive Officer(CEO), President, Vice
President
•Responsible for providing the overall direction of an
organization
•Develop goals and strategies for entire
organization
•Spend most of their time planning
•Communicate with key stakeholders, stockholders,
unions, governmental agencies, etc.,
•Company policies
•Use of multicultural and strategic action
 Basic Levels of management
Middle Managers
 Determine which goods or services to provide
 Assistant Manager, Manager (Section Head)
• Responsible for setting objectives that are dependable with
top management’s goals and translating them into specific
goals and plans for first-line managers to implement.
• Responsible for coordinating activities of first-line
managers
• Establish target dates for products/services to be
delivered
• Need to coordinate with others for resources
• communication, teamwork, planning and administration
competencies to achieve goals
• Develop leaders for the future by broad training and
experience
 Basic Levels of management

First-line Managers or supervisors

• Have direct responsibility for producing goods or services
Foreman, supervisors, clerical, accountant
• Spend little time with top managers in large organizations
• Technical expertise is important
• First line managers or supervisors represent link between
management and the workers.
• Provide training to the workers, supervise and guide the
workers
• Solve the problem of workers by top level management
 What are Managerial Competencies/capability
What are Managerial ability/skills/qualities Important?
• Foresight (open minded, forecast, predict the problems which
might be faced by the business in near future)
• Maturity (emotionally mature, balanced temperament, should
have high frustration tolerance)
• Technical knowledge (other wise subordinates may misguide)
• Human relation attitude (social understanding, maintain good
relation solve the problem, help them. treat as human being not
as machine.)
• Education (mgmt/admin knowledge)
• Intelligence (Ability to think, predict, analyze the problem
accurately)
• Leadership (Manager can motivate if he has leadership qualities)
 A Model of Managerial Competencies
A Model of Managerial Competencies
Communication
Competency

Teamwork Planning and

Competency Managerial Administration
Competency
Effectiveness
Global
Strategic
Awareness
Action
Competency
Competency
Self-Management
Competency
 MISTAKES OF MANAGERS

1. Insensitive, unapproachable, harassment

2. Unfriendly, arrogant (proud, superior, overconfidence)
3. Untrustworthy (unreliable, dishonest)
4. Too ambitious, playing politics
5. Specific performance problems
6. Over managing -- not delegating
7. Ineffective staffing
8. Can’t think strategically
9. Can’t adapt to different bosses
10. Over dependency on mentor (guru, teacher, guide,
advisor)
 Managerial Skills
•Management is a challenging job. It requires certain rainbow
skills to accomplish such a challenge.

•The job of a manager demands a combination of many types of

skills, whether he belongs to business organization, educational
institution, a hospital or a club.

•Thus, essential skills which every manager needs for doing

a better management are called as Managerial Skills.

-The degree (amount) of these skills varies (changes) from levels of

management and from an organization to organization.
S/w- Technical Max.
-Manager is to resolve, coordinate the various view points and pool
the talents of people working under him towards the
organizational goals.
 Managerial Skills
• Manager also has to plan and organize the operations of the
enterprise so that the subordinates are able to use the resources
in the best possible manner. For this, he must use the various
skills in appropriate degrees.
R. L. Katz has defined three types of managerial skills as follows:
1. Conceptual skills
2. Human skills
3. Technical skills
Management Level and Skills
 Conceptual Skills
• A manager needs conceptual skills to recognize the
interrelationships of various situational factors and
therefore, make decisions that will be in the best
interests of the organization.
• Conceptual skills are used for abstract thinking, planning,
ideas and strategy formulation.
• Conceptual skill is the ability to see the organization as a
whole.
• Most important at higher levels of management and much
less important at lower levels.
 Human Skills
•Human relations skills are also called Interpersonal
skills.
•It is an ability to work with people. It helps the
managers to understand, communicate and work with
others.

• It also helps the managers to lead, motivate and

develop team spirit.
•Human relations skills are required by all managers at
all levels of management.

-As all work is done when people work together, human

relations skills are equally important at all levels of
management.
 Human Skills
•To win cooperation of others and build effective work
teams.

•Social understanding, maintain good relation solve the

problem, help them. treat as human being not as machine.

•Sensitive to the needs & motivations of his superiors,

subordinates and peers.

•To Resolve conflicts.

 Technical Skills
• Managers need technical skills to guide and train sub-
ordinates.
• They can not handle their subordinates if they do not know
how the jobs are done.
• Technical skills are related to working with tools.
• knowledge how to operate the machine like computer and
any other machine.
• Examples of technical skills are writing computer programs,
completing accounting statements, analyzing marketing
statistics, writing legal documents, or drafting a design
• Calculation and prepare financial statement like balance
sheet and income statement etc.
 Technical Skills
•Technical skills includes specialized knowledge & proficiency in
handling methods, processes and techniques of specific jobs
•Most important at lower levels of management and much less
important at upper levels.
•Supervisory managers must train their subordinates in the
proper use of work – related tools, machines and equipment.

Now a days, some authors have added two more

skills in the previous list. These are:
4.Analytical Skills.
5.Administrative skills.
6.Communication Skills
7.Digital Skills
 Analytical Skills
•Analytical skills refer to abilities to proceed in a logical, step-
by-step and systematic manner to examine the various
aspects of a specific issue.
•Helping in problem solving & decision making.
•Helping in evaluating performance and to manage
complex situations.
•Ability to take a large quantity of data and analyze into
trends / results
 Administrative Skills
•Administrative skills are required at the top-level
management.
•The top-level managers should know how to make
plans and policies. They should also know how to get
the work done.
•They should be able to co-ordinate different activities
of the organization.
•They should also be able to control the full
organization.

•To Co-ordinate diverse activities and to regulate

organizational events in an orderly manner.
 Communication Skills and Digital Skills
Communication Skills
•Communication skills are required equally at all three levels of
management.
•A manager must be able to communicate the plans and
policies to the workers.
• Similarly, he must listen and solve the problems of the workers.
He must encourage a free-flow of communication in the
organization.

Digital Skills
•These are important because using digital technology
substantially increases a manager’s productivity.
•Computers can perform in minutes tasks in financial
analysis, HRP, and other areas that otherwise take hours,
even days to complete.
 Roles of a Manager by Henery Mintzberg
(10 Roles)
1.Interpersonal roles
Figurehead:
• Symbolic duties as head of the organization
• All social, inspiration, legal and Official Responsibility,
makes speeches.
• In this light, the manager is seen as a symbol of status and
authority.
Leader:
• Motivates,inspire,set an example.
• Promoting and encouraging their development, and balancing
effectiveness.
 Interpersonal roles

Liaison/Relationship:
• Develops and maintains a network of external contacts to
gather information
• Maintain relationship with other
organisations,government,industry groups etc.
• One must network and engage in information exchange to
gain knowledge.
 2.Informational Roles
1. Mangers as Monitors:
• gathers internal and external information relevant to the
organization
• Observes, collects and reviews data on the meeting of
standards.
• Managers gather information in order to be well
informed.
2.Managers as Disseminators:
• Transmits factual and value based information to
subordinates
• Transmits information and judgment about external and
internal environment/sources.
 2.Informational Roles
3.Managers as Spokespersons or Representatives
of the Organization:
• Communicates to the outside world on performance and
policies.
• Speak for the organization, defends.
• Engages in public relations.
 3.Decisional Roles
Managers as Entrepreneurs:
• Designs and Initiates changes, Set goals, Formulates
plans in the organization
• They are initiators, innovators, and designers of
improvement projects that direct and control change in
the organization.
Managers as disturbance handlers:
• Handles conflicts and complaints
• Managers react to situations that are unexpected, such
as mass absenteeism, resignation of subordinates, or
losing of customers.
 3.Decisional Roles
Managers as Resource Allocator:
• Approves budgets, schedules and programmes.
• Set priorities.
Managers as Negotiators:
• Works out agreement with customers, suppliers and
agencies.
 Interpersonal Relationship Role
This part encompasses three roles:

Role Description Identifiable

Activities
Figurehead Symbolic head; obliged to perform a Greeting visitors;
number of routine duties of a legal or social signing documents
nature
Responsible for the motivation and Performing virtually all
activation of employees; responsible for activities that involve
Leader
staffing, training, and associated duties subordinates
Maintains self-developed network of Acknowledging mail;
outside contacts and informers who provide performing other
Liaison activities that involve
special treatment and information
outsiders
 Informational Role

The informational roles also include three roles:

Role Description Identifiable
Activities

Emerges as nerve center of internal and Reading periodicals and

Monitor
external information about reports; maintaining
Information. personal contact.

Disseminator Transmits information received from Holding informational

other employees to members of meeting; making phone
the organization. calls to relay information.

Spokesperson Transmit information to outsiders on Holding board meeting;

organization’s plan, policies, actions, giving information to the
results, etc. media.
 Decision Making Role
The decisional roles include four roles:
Role Description Identifiable
Activities
Searches for development opportunities in the Designing and initiating
Entrepreneur dynamic environment and initiates changes within the
“improvement projects” to bring about organization.
change.
Disturbance Responsible for corrective action when Taking corrective action in
handler organization faces important disturbances. nonroutine situations.
Performing any activity that
Resource Responsible for the allocation of involves budgeting and the
organizational resources of all kinds. programming of
allocator employees’ work.
Responsible for representing the organization Participating in negotiations
with other parties.
Negotiator at major negotiations.
 The Evolution of Management
Thought

Development or Progress of Management Thought

 HISTORICAL BACKGROUND OF MANAGEMENT

There are many examples from past history that illustrates

how management has been practiced for thousands of years.

•The Egyptian pyramids and the Great Wall of China are

good examples of projects of great scope and magnitude that
employed tens of thousands of people.
•How was it possible for these projects to be completed?

•. Ever Since Down Of civilization.

•Administration of Mohenjo-Daro & Harappa Cities Of ancient
Aryan in 2000 B.C.

•Buddha order and the sangha

•Organizations of public life in ancient Greece.
 EVALUATION OF MANAGEMENT THOUGHT

-In Greece the existence of council, courts, administrators

and board of generals indicates the nature of management.

Organization of roman catholic church.

• Through the use of the scalar principle and the
delegation of authority, the city of Rome was
expanded to an efficient empire.

•Organization of military forces.

• Confucius-proper public administration, appoint

honest, unselfish and capable public officers.
 EVALUATION OF MANAGEMENT THOUGHT

Industrial revolution(1760-1820,England)

• Increase the demand of production

• Can be thought of as possibly the most important
pre-twentieth century influence on management.
• The introduction of machine powers, combined
with the division of labor, made large, efficient
factories possible.
• Planning, organizing, leading, and controlling
became necessary.
 EVALUATION OF MANAGEMENT THOUGHT

Contributions of Industrial revolution

• Large scale production by machine in place of hand
tools.
• Cottage system of production was greatly replaced by
the factory system. the factories gave employment to a
large number of workers. so need of managers to
handle these workers.
• The invention of steam engine enabled man to drive the
machines by power.
• Growth of engineering industries
• Rise of chemical industries
• Revolution in iron making
• Transport facilities increase
 Pre-classical Contributors
Adam Smith
 Published “The Wealth of Nations” in 1776
Advocated the division of labor (job specialization) to
increase the productivity of workers

Charles Babbage(1792-1871)
• Leading British mathematician at Cambridge university
• Method of science and maths should be applied in the
factories to solve the problem.
• He was a mathematical management scientist,
interested in division of labor, scientific methods.
 SCIENTIFIC MANAGEMENT ERA
SCIENTIFIC MANAGEMENT ERA (F.W Taylor, Henery Gantt,
Frank Gilbreth, Emerson)
•After Industrial revolution
•Machine theory or traditional theory, structural theory of
organization, anatomy of formal organization
•To solve the problem of management
•First systematic study of mgmt
 Fredrick Winslow Taylor The “father” of scientific management
 Published Principles of Scientific Management (1911)
 Using scientific methods to define the “one best way” for a
job to be done
 SCIENTIFIC MANAGEMENT ERA
 Having a standardized method of doing the job
 Putting the right person on the job with the correct tools
and equipment
 Providing an economic incentive to the worker
-Increased production, quality control, cost reduction, Elimination of
wastes, supreme importance to organization,
• Its main objective was improving economic efficiency,
especially labor productivity.

Reasons of Low Efficiency of Workers

•Lack of Knowledge on the part of management as to how much
work should be done by a worker in a day.
 SCIENTIFIC MANAGEMENT ERA
SM or Taylorism involves-
PRINCIPLES OF SCIENTIFIC MANAGEMENT
To enhance Productive efficiency of each worker-Principles
to be followed
1) Science, not rule of thumb- traditional mgmt(decision are
based on opinions, intuition or rule of thumb)
2)Harmony(Agreement),not discord (disagreement ,
conflict).
3)Co-operation (to change mental attitude /mental
revolution/mutual trust and confidence), not individualism
4) Maximum output, in place of restricted output.
5)Development of each man to his greatest efficiency &
prosperity.
 SCIENTIFIC MANAGEMENT ERA
6)Equal division of work and responsibility
between management and labour. (manager for
planning and worker for execute them)

Technique Developed -To implement these Principles

1)ELEMENT OF SCIENTIFIC MANAGEMENT
• Determination of workload (work study) by-
• Method study (to know the best method of doing a
particular job),
• Time study (standard time taken for any operation),
• Weakness /Fatigue/low energy/tiredness study or Motion
study (Reduce wasteful motions. some element of a job
can be eliminated, combined, their sequence change)
 SCIENTIFIC MANAGEMENT ERA
2)Proper selection, placement and training of workers by a
centralized personnel department.
(selection process is faulty-right worker not on the right job)

3.IMPROVEMENT IN METHODS OF WORK

i) Standardization of materials, tools and equipment, working
conditions, methods for improve the quality of production.
ii) Regulation of speeds of machines.
iii) Improvement of the work environment.

4.Scientific task setting (A fair day’s work)

5-setting of wage/pay/salary/income/earning
 SCIENTIFIC MANAGEMENT ERA
Differential Piece Rate System
• Taylor observed that workers did as little work as
possible. He felt that under existing wage system, an
efficient worker gained nothing extra. So, Taylor used the
differential piece (unit) rate system.
• Under differential piece rate system, a standard output was
first fixed. Then two wage rates were fixed as follows :-
• Low wage rate was fixed for those workers who did not
produce the standard output.
• Higher wage rate was fixed for those workers who produced
the standard output or who produced more than the
standard output.
 SCIENTIFIC MANAGEMENT ERA
• Differential piece-rate system can be explained with
following example :-
• The standard output for a day is 10 units. The wage rate
for producing less than 10 units is $ 5 per unit, and for
producing 10 or more units is $ 8 per unit. If Mr. X
produces 7 units, and Mr. Y produces 12 units, then their
wages will be as follows :-
• Mr. X's wage is 7 x 5 = $ 35
• Mr. Y's wage is 12 x 8 = $ 96
• Because of this system, the inefficient workers will try to
improve their efficiency, and the efficient workers will
be motivated to maintain or improve their production
capacity.
 SCIENTIFIC MANAGEMENT ERA
Mental Revolution
• Taylor introduced the concept of "Mental
Revolution".
• He said that the management and workers
should have a positive attitude towards each
other.
• This will result in close cooperation between
them. This will increase productivity and profits.
 SCIENTIFIC MANAGEMENT ERA
Fatigue and Motion Study
• Frank and Lillian Gilbreth (Husband and Wife) introduced
fatigue and motion studies. Fatigue and motion studies find out
and remove unnecessary and wasteful movements while
doing the job.
• According to the Gilbreths, fatigue (tiredness) and motion
(movements or actions) are interlinked.
• Every motion that is removed will reduce weakness. They
found that the workers do many wasted motions while
doing their work. This resulted in low energy.
• So, the Gilbreths asked the workers to stop all unnecessary
motions and to do only the motions which were necessary
for doing the job.
• Therefore, productivity of workers increased.
 SCIENTIFIC MANAGEMENT ERA
• Taylor separated planning from doing. At the planning
level there were four supervisors. They are :-

• Time and Cost Clerk : This boss prepares the standard time
for completing the work and cost of doing that work.
• Route Clerk : This boss makes the exact route (way) through
which each product has to travel from a raw-material to a
finished product.
• Discipline Clerk : This boss looks after the discipline and
absenteeism problems in the organisation.
• Instruction Card Clerk : The boss gives instructions about
how to do a particular work.
 SCIENTIFIC MANAGEMENT ERA
At the Doing Level :-
• At the doing level there were also four supervisors. They
are

• Gang Boss : He is responsible for setting up the machines

and tools and for direct supervision of workers.
• Speed Boss : He is responsible for maintaining a proper
speed of work.
• Repair Boss : He is responsible for the repairs and
maintenance of machines.
• Inspector Boss : He is responsible for maintaining the
quality of production.
 SCIENTIFIC MANAGEMENT ERA
Advantage to employers-
1-Replacement of traditional rule of thumb method by
scientific investigation
2.Proper selection and placement of the workers leading
to better performance in every context
3.Harmonious relationship between the workers and
mgmt.
4.Standard tools, methods, materials etc.
5.Better utilization of resources and elimination of wastes.
6.Scientific determination of fair work a worker can do
during the day.
 SCIENTIFIC MANAGEMENT ERA
Advantage To workers-
-Detailed instructions and constant guidance for the workers
-Training and devt to increase skills.
-Incentive wages to the workers for higher production.
Advantage To Society-
-Better quality products at lower costs to the people
-Higher standard of living of people through better products.
-Increased productivity in the country
-Technological development due to scientific investigation
How Do Today’s Managers Use Scientific Management?
 Use time and motion studies to increase productivity
 Hire the best qualified employees
 Design incentive systems based on output
 CRITICISM OF SCIENTIFIC MANAGEMENT

• Speeding up of workers (SM attempt to force them to work their

max)
• Boredom (routine work just like automatic machine)
• No scope for initiative (order-have to do, No innovation, Employee
were supposed to obey their superiors ,No new work method)
• Exploitation of workers (Mgmt is a clear device for the
exploitation of the workers, salary not increased as production
increase)
• it is said that the focus of this theory on “organization without
people”
• Focus on only production, not on marketing, human, accounting,
finance etc.
 General Administrative Theory

General Administrative Theory

 Fayol’s Fourteen Principles of Management
Functional Management Approach
 Henri Fayol (France)-Mining Engg
 Henri Fayol, a French industrialist, is now
recognised as the Father of Modern
Management.
-The father of management process or
administrative management school
-Fourteen Principles of Management:
Fundamental or universal principles of
management practice
Management as an universal process
 General Administrative Theory
• In year 1916 Fayol wrote a book entitled "Industrial and
General Administration". (1916 in French, translated into
English in 1949) .

• In this book, he gave the 14 Principles of Management.

• These 14 principles of management are universally
accepted and used even today.

• According to Henri Fayol, all managers must follow these 14

principles.
 General Administrative Theory

Fayol’s Fourteen Principles of Management

Division of work Centralization

Authority Scalar chain
Discipline Order
Unity of command Equity
Unity of direction Stability of tenure of personnel
Subordination of the Initiative
individual
Esprit de corps (Union is
Remuneration strength)
 Fayol’s Fourteen Principles of Management

1-Division of work-
-Among various individuals
-Specialization of labor
-Avoid waste of time
-job enlargement /growth for job satisfaction

2.Remuneration/payment/fee/wages of personnel
• For their services
• Should be fair to everybody
• It should include both financial and non-financial incentives.
 Fayol’s Fourteen Principles of Management

3-Authority and Responsibility

• Denotes the right or power to give the orders to the
subordinates.
• Responsibility means the duty which the subordinate is
expected to perform.(Ex-No of units of a product)
• According to Henri Fayol, there should be a balance
between Authority (Power) and Responsibility (Duties).
• Authority must be equal to Responsibility.
• If the authority is more than responsibility then chances are
that a manager may misuse it.
• If responsibility is more than authority then he may feel
frustrated.
 Fayol’s Fourteen Principles of Management
4.Discipline-
• Discipline means a respect for the rules and regulation of
the organization.
• Code of conduct, ethical norms of society
• Discipline may be Self-discipline, or it may be Enforced
discipline.
• Self-discipline is the best discipline. However, if there is no
self-discipline, then discipline should be enforced through
penalties, fines, etc.
• No organization can survive without discipline.
• Getting obedience to rule and regulations of the
organization.
• Essential for the smooth running of the organization.
• Depend upon leadership quality, clear and fair
agreement, no divide and rule, coordination ,mental
support.
 Fayol’s Fourteen Principles of Management
5.Unity of command
• A subordinate must receive orders from only one
superior. In other words, a subordinate must report to
only one superior.
• Dual command is a permanent source of conflict. conflict
among the superiors
• It helps clarify authority-responsibility relationship in the
organization.
• No possibility of receiving conflicting orders.
• Who is responsible to whom
• According to this principle, a subordinate (employee) must
have only one superior (boss or manager).
 Fayol’s Fourteen Principles of Management

• According to Fayol, if one subordinate receives orders from

more than one superior then there will be disorder.
• This will affect the discipline, efficiency, productivity and
profitability of the organisation.
• Unity of Command is a very important principle of
management.
• This principle is based on the rule "Too many cooks spoil
the soup."
 Fayol’s Fourteen Principles of Management

6.Unity of Direction
• All activities which have the same objective must be directed by
one manager, and he must use one plan. This is called Unity of
Direction.
• For example, all marketing activities such as advertising, sales
promotion, pricing policy, etc., must be directed by only one
manager.
• He must use only one plan for all the marketing activities.
• One unit and one plan
• Group of activities having the same objective or directed towards
its common goal.
• Functioning of a department, sub dept or the organization as a
whole.
 Fayol’s Fourteen Principles of Management

7.Subordination of Individual Interest to the

general interest
• In an organization, there are two types of interest, viz., the
individual interest of the employees, and the general
interest of the organisation.

• The individual interest should be given less importance,

while the general interest should be given most importance.
If not, the organization will fail.

• The interest of the organization must prevail upon the

personal interests of individuals. (both toward Goal)
 Fayol’s Fourteen Principles of Management

8.Scalar Chain
• Scalar Chain is a line of authority. This line joins all the
members (managers and employees) from top to bottom.
• Every member must know who is his superior. He must
also know who is his subordinate.
• Scalar Chain is necessary for good communication.
Scalar Chain must not be broken in standard situations.
• However, if quick action is necessary, then this chain can be
broken. This is done using "Gang Plank" / "Bridge" /
"Direct Contact".
• Scalar Chain is shown in diagram below with Gang plank as
dotted line FP.
•The Scalar Chain is shown by a double ladder A to G and A to Q. A
is the head of the organisation. B and L are the next level, and so
on.
• If quick action is necessary, then a "Gang Plank" "FP" is
made.
•Now F and P can contact each other directly but they
should inform E and O about their decisions.
 Fayol’s Fourteen Principles of Management
-Take more time from top to bottom communication
-Distortion of message as every superior from top to bottom,
may add and delete, edit something.
-Communication should be min (Short-circulating chain for
quick communication gang plank
 Fayol’s Fourteen Principles of Management

9. centralisation
• In centralisation, the authority is concentrated only in few
hands.
• However, in decentralisation, the authority is distributed to
all the levels of management.
• No organisation can be completely centralised or
decentralised.
• If there is complete centralization, then the subordinates
will have no authority (power) to carry out their
responsibility (duties).
• Similarly, if there is complete decentralisation, then the
superior will have no authority to control the organisation.
• Therefore, there should be a balance between centralisation
and decentralisation.
 Fayol’s Fourteen Principles of Management

10.Order
• A place for everything and everything in its place (order of
employee i.e. social order, order in materials things)
• Employee must be at appointed place
• Right person on the right job and right place
• There should be an Order for Things and People in the
organization. Order for things is called Material Order.
• Order for people is called Social Order.
• Material Order refers to "a place for everything and everything in
its place."
• Social Order refers to the selection of the "right man in the
right place". There must be orderly placement of the resources
such as Men and Women.
• Misplacement will lead to misuse and disorder.
 Fayol’s Fourteen Principles of Management

11.Equity/Fairness/Impartially
• Fair judgments in dealing wd human resources.
• person must be treated wd kindness.
• superiors should be good natured, soft spoken
• Impartiality creates loyalty ,reliability and devotion in the
employees.
12.Stability of tenure/term of personnel
• An employee needs time to learn his job and to become
efficient.
• Therefore, he should be given time to become efficient.
When he becomes efficient, he should be made permanent.
• In other words, the employees should have job security.
• Employee should not be rotate at different jobs very
frequently
 Fayol’s Fourteen Principles of Management

13.Initiative
• Management should encourage initiative.They
should encourage the employees to make their own
plans and to execute these plans.

• This is because an initiative gives satisfaction to the

employees and brings success to the organisation.
• very important and essential
 Fayol’s Fourteen Principles of Management

14. Esprit de corps (Union is strength)-

•Esprit de Corps means "Team Spirit".
•Therefore, the management should create unity, co-operation
and team-spirit among the employees.
•They should avoid the divide and rule policy.
•Harmonious human relation
•Avoid written communication (Use face to face contacts tend to
promote speed, clarity and harmony)
By: Marissa Madrigal, Beau Hindman, Amy Wrenn
 Weber’s Ideal Bureaucracy
Meaning-system of government, official procedure, administration

• In the 1930s Max Weber, a German sociologist

• A group of workers (for example, civil service employees
of the U. S. government), is referred to as "the
bureaucrats.“

• Bureaucracy has an informal usage, as in "there's too

much bureaucracy where I work." This informal usage
describes a set of characteristics or attributes such as
"red tape" or "inflexibility" that frustrate people who
deal with or who work for organizations they recognize as
"bureaucratic."

• Max Weber's principles spread throughout both public

and private sectors.
Weber’s Ideal Bureaucracy

Weber’s
Weber’s
Principles
Principles of
of
Bureaucracy
Bureaucracy
 Weber’s Ideal Bureaucracy

•The idea is to treat all employees equally and customers

equally, and not be influenced by individual differences.

•A Clear hierarchy -. All positions within a bureaucracy is

structured in a way that allow the top positions to manage
and control the lower positions.

•This allows for a clear chain of command, control and order

organization.

•Division of labor and specialization - All responsibilities in an

organization are specialized, so that each employee has the
expertise to make a special task.
 Weber’s Ideal Bureaucracy
• Intangible relationships between managers and
employees - Leaders must maintain an unfriendly
relationship with employees so that Partiality and personal
biases do not access decisions.
• Interpersonal relations are based on positions and not on
personalities.
• Only Bureaucratic or legal power is given importance.

• Competence, skills - Should be the basis for all decisions

made-up in hiring, work assignments, and promotions in
adjustment to Advance ability and merit as the main
characteristic of a bureaucratic organization.
• Selection and Promotion is based on Technical
qualifications.
 Weber’s Ideal Bureaucracy
• Records - The bureaucracy should be continued for the
complete files regarding to all activities.

• There are well defined Rules and Regulations. There

rules cover all the duties and rights of the employees. These
rules must be strictly followed.

• There are well defined Methods for all types of work.

 Weber’s Ideal Bureaucracy
Bureaucratic organization is criticized because of
the following reasons :-
• It does not give importance to human relations.
• Too much emphasis on rules and regulations. The rules and
regulations are rigid and inflexible.

• It is suitable for government organizations. It is also suitable

for organizations where changes are very slow.

• But it is not suitable for business organizations because

business organizations believe in quick decision making
and flexibility in procedures.

• It is appropriate for static organizations.

• Bureaucratic organization is a very rigid type of organization.

 Weber’s Ideal Bureaucracy
• No importance is given to informal groups. Nowadays,
informal groups play an important role in all business
organizations.

• Bureaucracy involves a lot of paper work. This results in

lot of wastage of time, effort and money.

• There will be unnecessary delay in decision-making due

to formalities and rules.

• Too much importance is given to the technical

qualifications of the employees for promotion and
transfers. Dedication and commitment of the employee is
not considered.

• There is limited scope for Human Resource (HR).

 Classical Approach
Classical Approach/functional
approach/management process
approach/administrative mgmt approach-
1.Scentific Management (Taylor)
2.Administrative or functional management (Henri Fayol)
3.Bureaucracy(Max Weber)

-One of the oldest approach to management

-Concentrate on organization structure and their mgmt
-They concentrate on work planning, the technical requirement,
principles of mgmt.
-known as structural framework of organization
 Classical Approach
-Taylor suggested scientific method to solve mgmt problem
-Fayol 14 principles of mgmt and their universal applications
Contribution of classical approach

-Focus on division of labour, Scalar chain, Functional processes

-Focus on the managerial experiences and implementation

-They ignored the role of human element

-Money is considered the main motivator under this theory

-Centralization of authority.
-
 Classical Approach
--Organization as a closed system, no interaction with the
external environment.

-Based on past managerial experiences and their limited

observations.

-Strict rules and regulation.

If conflict, the interest of the organization should prevail.

-Classical writers emphasis on the universality of mgmt
principles but in practice, mgmt principles can not be
applied blindly, they may need modifications according to
situation.
 Neo-Classical or Human Relations Theory
-This theory is a reaction to the classical approach.
--This theory focused on the human aspect of Industry, -Human
factor is the most important resources of organization
-focus on inter-personal relations at the work place
-Manager must take interest in the welfare of workers.
-Elton Mayo is as Father of the Human relations school
-Conducted some experiments known as Hawthorne
experiments
Chester Barnard
Saw organizations as social systems that require human
interaction and cooperation.
Expressed his views in his book “The Functions of the Executive
(1938)”.
 Neo-Classical or Human Relations Theory
Robert Owen-(1771-1858)
Father of personnel management
Scottish businessman and reformer who advocated for better
treatment of workers.
Relieve human sadness/unhappiness.
was a British factory owner who advocated concern for the working
and living conditions of workers
He made provisions for reduced working hours, housing
facilities, education of workers and their children, human
treatment to workers.

Mary Parker Follett

Management therefore involves getting things done with and
through people.
Organizations viewed as individuals and group behavior.
Believed that individual potential could only be released by
group association.
 Neo-Classical or Human Relations Theory
it focused on the following :
•Man is a social animal and he never thinks alone. He is
greatly influenced by what others with whom he is
associated thinks or behaves.
•Human relations, through team work, seeks to fulfill both
individual and organizational objectives simultaneously
•Form small informal group and leader can fix norms,
recognition, behavior, performance of workers.
•Thus it is the group that sets the pattern of human
behavior.
-Improve relations with workers.
•A focus on people, rather than upon machines or economics
•-Importance of employee satisfaction—a satisfied worker
was believed to be a productive worker.
 Neo-Classical or Human Relations Theory

• -Making management practices more humane.

• A key activity in human relations is motivating people and
their job satisfaction
 Abraham Maslow
 Douglas McGregor
• The core of human relations approach is "being nice to
workers”.
• It is necessary to study the organizational behavior as a
whole, involving the study of the attitude, behavior and
performance of both individuals and groups in organizational
setting.
 Neo-Classical or Human Relations Theory

Hawthorne Experiments-
-1927-1932 by Elton mayo and associates
-Western Electric company, Chicago
• The human relations movement drew heavily in support of its
findings on a series of famous experiments called the
Hawthorne Studies which were conducted at the
Hawthorne Plant of the Western Electric Company
• The neglect of human aspect and over- emphasis on
machines, materials and abstract functions led to the
development of this approach.
• Prof. Elton Mayo is considered as the initial profounder of
the Human Relations or Behavioral Approach to
Management
 Neo-Classical or Human Relations Theory

Hawthorne Experiments-
1. -Illumination/light/lighting/experiment
-Effect of lighting on employee o/p
-One group in room where lighting remain constant / Second
group where lighting varied (over voltage, under voltage,
not proper supply, intensity of light )

-O/P of both group increased

Result-it was concluded that lighting was a minor factor.

there were some other factors which influenced the
productivity of workers when the intensity of light was
increased or decreased.
 Neo-Classical or Human Relations Theory

2.Relay assembly (meeting / get-together) test room

experiments-
-Test group of six female workers, frequent changes were
made in their working conditions such as shorter working
hours, rest periods, hot lunch, friendly interaction
among members of the group, free social interaction
among group members.
-Result-Productivity increased,
-
Socio-psychological factors like feelings, recognition,
participation having greater influence than working
condition for higher productivity.
 Neo-Classical or Human Relations Theory

3.Mass interview Programme

-A large number of workers were interviewed by the
researchers to understand their attitude, opinion on work,
working conditions etc.

Result--
Attention on happiness of employee
-The Hawthorne studies suggested that happy employee
will be more productive employee.
 Neo-Classical or Human Relations Theory
Contribution of Human relations or Neo-classical Approach
• Role of money-
-Money is not every thing to motivate
-Socio-psychological factor act as important motivator

-Conflict between organizational and individual goals

- For the smooth functioning of the organization, it is
necessary to achieve the integration between the goals of
the organization and those of the individuals
• Communication
-Both way communication is necessary
-Space for feelings and sentiments, moral /ethical support
 Neo-Classical or Human Relations Theory

-Group Dynamics/cluster/set
-Workers often do not act or react as individuals but as
members of groups
-The groups plays an important role in determining the
attitude and performance of individual workers.

• Social system
-Organization in general is a social system composed of
interacting parts.
-The workers follow a social norms determined by their co-
workers, which defines the proper amount of work
-Social env. Affects and affected by workers
-A family, a village, a political party a trade union is all social
groups.
 Neo-Classical or Human Relations Theory

Criticism of Neo-classical approach-

• Invalid Assumption
-Assumption that there is a solution to every problem which
satisfies everyone is not true
• Lack of scientific Validity-
-The groups chosen for study were not representative in
character.
-The findings based upon temporary groups
• Limited Application
-Application is limited not universal to all organization.
• Limited Focus on work
-Focus on interpersonal relations and on the social groups
 Neo-Classical or Human Relations Theory

• Over concern with happiness

-Attention on happiness of employee
-The Hawthorne studies suggested that happy employee
will be more productive employee.
-It is possible a lot happiness but unproductive workers
 APPROACHES TO MANAGEMENT

APPROACHES TO MANAGEMENT
1) Empirical Approach
2) Human Behaviour Approach
3) Social System Approach
4) Decision Theory Approach
5) Mathematical Approach
6) Socio-Technical Systems Approach
7) Systems Approach
8) Contingency Approach
9) Operational Approach
 APPROACHES TO MANAGEMENT
Empirical/Experimental/practical approach
•Features
-Mgmt is the Study of past managerial experiences and cases
-Past experiences as lesson for the future.
–Study of Successful & failure cases help managers.
–Learning through experience of others
-Knowledge and experiences of successful managers can be
applied by other managers in problem solving and decision
making.
•Limitations–Situations of past not the same as present.
• Contributors:
Earnest Dale, Mooney & Reiley, Urwick.
 APPROACHES TO MANAGEMENT
Contingency/ common sense /Situational
School(1950)
-Also known as a common sense approach. If -Then approach.
 Organizations are individually different, face different
situations (contingency variables), and require different
ways of managing.
• The environment is relatively uncertain
• The technology is complex and dynamic.
• -The goals are diverse and changing.
• The impact of environment on the organization structure and
managerial style is the major concern
-It rejects the blind applications of principles.
–Depends on situation.
–Each organization is to be studied as a unique entity.
 APPROACHES TO MANAGEMENT

Contingency/Situational School Defined

 It suggest that no organizational design may be
suitable for all situations.
• There are many non-routine activities in which
creativity and innovation are important.
-Particular action is valid only under certain conditions.
• There is no one universally applicable set of
management principles (rules) to manage
organizations.
 APPROACHES TO MANAGEMENT
DECISION THEORY APPROACH
•Manager –Decision maker and problem solvers.
•Organisation–Decision making unit.
•Features
•Management is decision making.
•Decision making -control point in management
•Increasing efficiency -the quality of decision
•Contributors
–Simon, Cyert, Forrester, etc.
•Uses
–Tools for making suitable decisions in organizations.
•Limitation
–Does not take the total view of management
–Decision making -one aspect of management
 APPROACHES TO MANAGEMENT
Decision Making Model In Five
Steps
1.State the problem
2. Identify alternatives
3. Evalute the alternatives
4. Make a decision
5.Implementation of the decision

-An alternative is (uniquely) best if

and only if it is better than all other
alternatives.
-If there is a uniquely best
alternative, choose it.
 APPROACHES TO MANAGEMENT
SYSTEMS APPROACH (1960)
-Organization is a system composed of interrelated and
interdependent elements.
-The system does not exist in a vacuum. it receive information,
material and energy from other systems as inputs.
-An organization is a dynamic system as it is responsive to its
environment.
--Environment (e.g. technological, social, economic, and
political, competition in the market)
-It does not comment on the validity of the classical principles
of management.
 The Systems Approach
Basic Types of Systems
Closed systems
 -Self-dependent, self-contained, self-maintaining unit
Are not influenced by and do not interact with their
environment
Ex- physical and mechanical systems are closed
system.
Concentrate on internal relationships between
subsystems
Open systems
Dynamically interact to their environments by taking in
inputs and transforming them into outputs that are
distributed into their environments
APPROACHES TO MANAGEMENT
 APPROACHES TO MANAGEMENT
For example, living organisms are considered open
systems. Humans, for example, inhale oxygen out of the
environment and exhale carbon dioxide into the environment.

-Whereas, say, a human living in a house where he can get

deliveries, that's an open system

Similarly, some organizations consume raw materials in the

production of products and Produce finished goods and
pollution as a result.

In contrast, a watch is an example of a closed system in

that it is a relatively self-contained, self-maintaining unit
that has little interacts or exchange with its environment.
 APPROACHES TO MANAGEMENT
-Imagine, say, a human in a house, that is perfectly insulated from the world
and has no mechanism of bringing ANYTHING new in. That would be a
'closed system'.
• World-various national economy-industries-firm-production,
accounting, finance etc.
- The world considered a system in which various national economies are
subsystems. each economy is composed of its various industries, each
industry is composed of firm, a firm can be considered a system with
subsystems such as production. marketing, finance, accounting etc.
- Ex.-Internet, Organization, Democracy
-Composed of a hierarchy of subsystems.
-System-subsystem-further sub system
-Input, Process and Output
 APPROACHES TO MANAGEMENT

implications of the Systems Approach

-Coordination of the organization’s parts is essential for
proper functioning of the entire organization.
-Decisions and actions taken in one area of the
organization will have an effect in other areas of the
organization.
-Organizations are not self-contained and therefore, must
adapt to changes in their external environment.
 APPROACHES TO MANAGEMENT
SOCIAL SYSTEM APPROACH
-Chester Barnard father of social system approach.
-Almost same as Human relations approach.
-Organization as a social/collective/shared system that is
composed of people who work in cooperation.
- Employee cooperate, communicate, work for a common
purpose
•Understanding the behavior of groups & individuals.

•Features
1.Social System, a system of cultural relationship
• Cultural relations may be defined as interactions, both direct
and indirect, among two or more cultures.
 APPROACHES TO MANAGEMENT
• Formal/official/proper Organization -Cultural relationships of
social groups working within the organization.

2.Co-operation necessary

3.Efforts directed –harmony (agreement/synchronization)

between goals of organization & goals of groups.

4.Organizational decisions should not be based on desires of

one group alone but should reflect the interests of all the
parties.
 SOCIAL SYSTEM APPROACH Contd…

•Contributors/Thinkers
–Pareto, Chester Barnard

•Uses
–Organizational decisions should not be based on desires of
one group alone but should reflect the interests of all the
parties.

•Limitations
–Miss\ ignore many management concepts principles &
techniques that are important to practicing managers.
BUSINESS ETHICS

&
SOCIAL RESPONSIBILITY
 ETHICS

Ethics comes from the Greek root “ethos” which means

character, guiding beliefs, standards or ideals for group
and community.
-Ethics mean :what is good or bad, fair or unfair,
Right/Wrong for group, culture, or nation or while doing
the business.?
Ethics may be defined as-
That set of moral values /Moral code/Principles
Business Ethics refer to the
moral/good/right/decent/honest principles which should
govern business activities.
-Code of conduct for the managers.
-Guide the human to perform their job ethically \ fairly \
decently \ morally.
 Example of Ethical business practices-
-To charge fair prices from the customers.
-To pay taxes to the government honestly.
-To charge reasonable profits from the customers.
- To give fair treatment to the workers.
-Business should follow the ethical or moral norms of the society.
-Ethical values in business operations.
-Honest dealing with every one.
-if a manager is just and fair in his action, his behavior will be deemed to
be ethical.

Unethical practices
-Sale of products injurious to public health. Ex.- charas, heroine
-False claims in advertisement
-Exploitation of workers
-Plain water in injection
-Duplicate products under popular brand names.
-Using company property for personal use.
 Business Ethics and management
Ethics may be Business ethics, medical ethics, legal ethics etc.
 Business Ethics and management
Business Ethics importance-
-Business is a part of the society. social values must
become the guiding principles for doing business.
-Organisation fail and not at society's expectations, it may
lose its image, market share.
-Managers must respect the social norms and expectations.
-If a business is not ethical, govt can take action .
- Equity-fair and reasonable treatment to all.
- Honest business, responsible citizen
-Sense of right and wrong
 Sources of Ethical Norms

Fellow Workers Institutions Regions of Country

Family Profession
The Individual
Ethics

Friends Employer

The Law Religious Beliefs Society at Large

 Business Ethics and management
Factors influencing the Ethical behaviour
1.Social factors -social values, norms, traditions, customs.
2.Economic factors -immoral advertisement for profit
3.Cultural factors -cultural values, family system, religion,
education,
4.Political factors -business ethics are also influenced by the
ideology and philosophy of the political party in power.
5.Organisational factors.
6.Institutional codes
 Tools for promoting Ethical Practices
1.Mission statement-the objective of the organization, What
business wants to be?

2.Core Values-based on its vision and mission. core values

like impartiality, fairness, technical excellence, respect
between co- workers.

3.Policies and procedures should be based on ethical values.

4.Code of conduct or code of ethics
-Have the support of top management,
-Be clearly explained to all employee
-Be practical and realistic
 Business Ethics and management
5.Grievance/Complaint handling mechanism
-For proper implementation of the code of ethics and conduct.

6.Dilemma resolution workshops and Ethical

training
-Ethically dilemma resolution workshop should be organized
from time to time to prepare the participants for dealing with
ethical dilemmas in future in an effective manner.
7. Establishing Ethical climate of firm
 SOCIAL RESPONSIBILITY

Social responsibility refers to a firm’s obligation to act for

benefit of society.
-It is based on the assumption that what is good for the society.
--Several corporations have been engaged in discharging their
social responsibility.
 SOCIAL RESPONSIBILITY
-A business enterprise must try to understand the goals
of the society of which it is a part and take steps to
contribute towards the achievement of those goals.
•-Act in a manner which will serve the best interests of the
society.

Classical view of social responsibility

•Business is an economic institution and major responsibility
is to produce more goods and earn more profit to owners.

Modern view of social responsibility

•The business houses are a part of the society, take input and
resources from society. so must respond to the social needs
and values.
 SOCIAL RESPONSIBILITY
• J.R.D Tata was the first leading businessman to clearly
recognize that business does not operate in isolation
from society.
• Solve the problems of people
- Ex. TISCO has contributed a lot in the areas of
community development, social welfare, tribal
development, rural industrialization.
- “Meeting of minds” SDP/FDP By TCS
-Finolex industries started the Hope foundation in 1979
for the detection and treatment of cancer.
- Reliance foundation
 SOCIAL RESPONSIBILITY
•Companies are taking initiatives for developing infrastructure in
rural areas, e.g., TATA Motors provides desks, benches,
chairs, tables, computer laboratory, electrical fittings and
educational and sports material to various primary schools in
Singur.
•-Lupin laboratories launched “ Lite for Life” programme in
1973 to control and eliminate tuberculosis from India.
-BHEL is also providing drinking water facilities, construction
of roads, provision of health facilities, educational
facilities, and so on..
•-Companies like ONGCs are encouraging sports by placing
good players on their pay rolls.
•-Microsoft corporation donated $100 million (more than 400
crore) for the containment of AIDS in India.
 SOCIAL RESPONSIBILITY
Social responsibility towards different interest
groups
1.Responsibility towards Employees
- To pay reasonable wages and salaries to its employees
so that they may satisfy their needs and lead a good life.
- To provide good working conditions to maintain the health
of the workers.
- Provide services such as medical facilities, child
education, life insurance, medical insurance.
- Create better human relations in the business.
-Provide equal opportunities to the workers to develop their
skills through training and education.
 SOCIAL RESPONSIBILITY
2.Responsibility towards Customers
• Customer satisfaction is the ultimate aim of all economic
activities.
- To produce goods which meet the needs of the
consumers of different classes.
- Goods at reasonable prices.
- To handle the customer’s grievances quickly and
carefully.
- To ensure regular supply of goods and services.
- To ensure that advertisement and other statement
issued by the business are truthful.
- To follow fair trade practices.
 SOCIAL RESPONSIBILITY
3.Responsibility towards Government
-Follow the polices or guidelines issued by the government.
-To pay taxes honestly(VAT, Sales tax etc) and in time to the
government.
- To adopt fair dealing in foreign trade.
4.Responsibility towards community and society
- To promote national integration.
-To preserve and promote social and cultural values.
-To provide high quality product to the society.
- To improve the quality of life of the workers.
- To generate employment opportunities.
- To ensure Efficient use of national resources.
- To take steps against air, water and noise pollution.
Long Questions
Long Questions
 Short Questions
1.“The fundamental functions of management are universal.
they are applicable to all situations." Discuss.
2.Difference between authority and responsibility.
3.Distinguish between management process, principle and
practices.
4.Discuss the contributions of ‘Hawthorne Experiments’ in the
development of managerial thinking.
5.Discuss Taylor’s principles of scientific management.
6.What is the contingency approach to management?
7.Diffrences between Human relations and scientific
management approach.
8. “Elton mayo is known as the father of human relations
school." comment.
 Short Questions
9.Write Short notes on the following:
a) Level of management
b)Interpersonal Roles of Managers
c)Managerial skills
d)Management as a Process
e)Management Vs. administration
f)Impotance of management
g)Scientific management
h)Concept of business ethics
 Objective questions
1.Which one of the following approaches is adopted in studying
management?
a) Profession b) Art
c) Science d) Process

2.Management is
a) Pure Science b) applied science
c) Art d) science and art both

3.The concept of scientific management was given by

a) Frederick Taylor b) Henery Fayol
c) Elton Mayo d) Peter Drucker
 Objective questions
4.Management as a system emphasises on-
a) close system perespective
b) open system perespective
c) socio-technical system
d)None of these
5.What is the natur of management process?
a) Time-bound b) Continuous
c) Procedural d) disjointed
6.Top management functions are the most important because
these take care of-
a)Overall organisation b)specific problems
c)Routine problem d)extraordinary problems
 Objective questions
7.Which one of the following terms is not associated with social
responsibilty?
a)Social commitment b) Social concern
c) Social programme d) Social structure

8.Business organisations should feel concerned with social

responsibility because they-
a) Are the part of society b)can make huge profit
c)Can be more efficient d)can complete in better way
 Thanks…
REFERNCES:-
• Koontz,”Principles of management”,TMH,2008
• Robbins and Coulter,”Management”,PHI
• L.M.Prasad,”Principles and Practices of management”
• T.Ramasamy “Principles of Management.”
• Google.co.in etc.