Organizational Behaviour

Unit – I
Introduction to management and management
process
 Introduction to Management
1. Management can be referred to as the process of
planning, organizing, staffing, directing, coordinating,
and controlling, at other times it is used to describe
people as the task of managing them. It is also known
as the body of knowledge, practice, and discipline.

2. There are some people who describe the concept of

management as a leadership and decision-making
technique, while others have analyzed
the management as a process of economic resources,
production factors or authority.
 Introduction to Management
The concept of Management can be defined as the
process of achieving things with the aim of achieving
goals effectively and efficiently. Management is the
process of working with people and other organizational
resources and reaching organizational goals.

There are some important words in the definition of

management which need to describe:
• Process
• Effectiveness
• Efficiency
 Definitions of Management
• A'Management is a distinct process consisting of
planning, organising, actuating and controlling;
utilising in each both science and art, and followed in
order to accomplish pre-determined objectives."
- George R Terry (1877 - 1955)
• "Management is the art of getting things done
through others and with formally organised groups.“
- Harold Koontz (1909-1984)
• Management may be defined as the process by
means of which the purpose and objectives of a
particular human group are determined, clarified
and effectuated
- Peter Ferdinand Drucker
 Definitions of Management
• "Management is the art of knowing what you want
to do and then seeing that they do it in the best and
the cheapest way."
- Frederick Winslow Taylor (March 20, 1856 – March
21, 1915)
• One popular definition is by Mary Parker Follett.
Management, she says, is the "art of getting things
done through people.“
• According to Henry Fayol, “To manage is to forecast
and plan, to organize, to command, & to control”
 Characteristics of Management

Management as a process
Management as an activity
Management as a discipline
Management as a group
Management as a profession
Management is an art
Management is a science
 Characteristics of Management
• Management is a goal-oriented process
• Management is a continuous process
• Management is a dynamic task
• Management is a group activity
• Management is pervasive
 Objectives of Management
• Make Proper Use of the Available Resources
• Ensure Business Development and Growth
• Quality Products and Services
• Availability of Goods and Services
• Ensuring Discipline in the Workplace
• Attracting the Best Candidates for the Job
• Make Futuristic Plans
• Reduce the Element of Risks
• Coordination
• Promotes Research and Business Growth
 Importance of Management
• Achieving Group Goals.
• Increasing Efficiency.
• Creating Dynamic Organisations.
• Creating Robust Processes.
• Maintaining Organisational Culture.
• Aiding Technical and Social Innovation.
• Contributing to Society.
 Functions of Management
According to George & Jerry, “There are four
fundamental functions of management i.e. planning,
organizing, actuating and controlling”.
The most widely accepted are functions of management
given by KOONTZ and O’DONNEL are
• Planning
• Organizing
• Staffing
• Directing
• Controlling
 Functions of Management
Luther Gullick has given a keyword ’POSDCORB’
where
P stands for Planning,
O for Organizing,
S for Staffing,
D for Directing, Co for Co-ordination/Controlling,
R for reporting
B for Budgeting.
 Functions of Management
Planning

According to KOONTZ, “Planning is deciding in advance -

what to do, when to do & how to do. It bridges the gap
from where we are & where we want to be”. A plan is a
future course of actions. It is an exercise in problem
solving & decision making. Planning is determination of
courses of action to achieve desired goals. Thus,
planning is a systematic thinking about ways & means
for accomplishment of pre-determined goals. Planning
is necessary to ensure proper utilization of human &
non-human resources
 Functions of Management
Organizing
Organizing is a process of linking and arranging activities
in a sequence. “To organize a business is to provide it
with everything useful or its functioning i.e. raw
material, tools, capital and personnel’s”. To organize a
business involves determining & providing human and
non-human resources to the organizational structure.
Organizing as a process involves:
• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
• Coordinating authority and responsibility relationships.
 Functions of Management
Staffing

The main purpose of staffing is to put right man

on right job i.e. square pegs in square holes and
round pegs in round holes. According to Kootz &
O’Donell, “Managerial function of staffing
involves manning the organization structure
through proper and effective selection, appraisal
& development of personnel to fill the roles
designed in the structure”..
 Functions of Management
Directing

It is that part of managerial function which

actuates the organizational methods to work
efficiently for achievement of organizational
purposes. Direction has following elements:
• Supervision
• Motivation
• Leadership
• Communication
 Functions of Management
Controlling

It implies measurement of accomplishment

against the standards and correction of deviation
if any to ensure achievement of organizational
goals. The purpose of controlling is to ensure
that everything occurs in conformities with the
standards
 Functions of Management
Reporting

Reporting provides insight into the progress and

agreements can also be recorded in this way.
Other essential information—such as problems
with employees, new processes, performances
interviews and sales figures—is also made
transparent through reporting. Involved parties
can also quickly find archived reports.
 Functions of Management
Budgeting

Finance is the lifeblood of any organisation. The

manager is responsible for the management,
expenditure and control of the department’s
budget and also has to keep an eye on tax details
 Levels of Management
The term “Levels of Management’ refers to a line of
demarcation between various managerial positions in
an organization. The number of levels in management
increases when the size of the business and work force
increases and vice versa. The level of management
determines a chain of command, the amount of
authority & status enjoyed by any managerial position.
The levels of management can be classified in three
broad categories:
• Top level / Administrative level
• Middle level / Executory
• Low level / Supervisory / Operative / First-line
managers
 Levels of Management
Top Level of Management
It consists of board of directors, chief executive or managing director.
The top management is the ultimate source of authority and it
manages goals and policies for an enterprise. It devotes more time on
planning and coordinating functions.
The role of the top management can be summarized as follows -
• Top management lays down the objectives and broad policies of the
enterprise.
• It issues necessary instructions for preparation of department budgets,
procedures, schedules etc.
• It prepares strategic plans & policies for the enterprise.
• It appoints the executive for middle level i.e. departmental managers.
• It controls & coordinates the activities of all the departments.
• It is also responsible for maintaining a contact with the outside world.
• It provides guidance and direction.
• The top management is also responsible towards the shareholders for the
performance of the enterprise .
•
 Levels of Management
Middle Level of Management
The branch managers and departmental managers constitute middle level.
They are responsible to the top management for the functioning of their
department. They devote more time to organizational and directional
functions. In small organization, there is only one layer of middle level of
management but in big enterprises, there may be senior and junior middle
level management. Their role can be emphasized as -
 Levels of Management
• They execute the plans of the organization in accordance
with the policies and directives of the top management.
• They make plans for the sub-units of the organization.
• They participate in employment & training of lower level
management.
• They interpret and explain policies from top level
management to lower level.
• They are responsible for coordinating the activities
within the division or department.
• It also sends important reports and other important data
to top level management.
• They evaluate performance of junior managers.
• They are also responsible for inspiring lower level
managers towards better performance.
 Levels of Management
Lower Level of Management
Lower level is also known as supervisory /
operative level of management. It consists of
supervisors, foreman, section officers,
superintendent etc. According to R.C. Davis,
“Supervisory management refers to those
executives whose work has to be largely with
personal oversight and direction of operative
employees”. In other words, they are concerned
with direction and controlling function of
management. Their activities include -
 Levels of Management

• Assigning of jobs and tasks to various workers.

• They guide and instruct workers for day to day activities.
• They are responsible for the quality as well as quantity of production.
• They are also entrusted with the responsibility of maintaining good
relation in the organization.
• They communicate workers problems, suggestions, and
recommendatory appeals etc to the higher level and higher level goals
and objectives to the workers.
• They help to solve the grievances of the workers.
• They supervise & guide the sub-ordinates.
• They are responsible for providing training to the workers.
• They arrange necessary materials, machines, tools etc for getting the
things done.
• They prepare periodical reports about the performance of the workers.
• They ensure discipline in the enterprise.
• They motivate workers.
 Skills of Management
Management is a challenging job. It requires
certain skills to accomplish such a challenge.
Thus, essential skills which every manager needs
for doing a better management are called as
Managerial Skills.
According to Professor Robert Katz, there are
three managerial skills, viz.,
Conceptual Skills,
Human Relations Skills, and
Technical Skills.
 Skills of Management
According to Prof. Robert Katz, all managers require above three
managerial skills. However, the degree (amount) of these skills
required varies (changes) from management and from an
organization to organization.
 Skills of Management
1. Conceptual Skills
Conceptual skill is the ability to visualize (see) the
organization as a whole. It includes Analytical, Creative
and Initiative skills. It helps the manager to identify the
causes of the problems and not the symptoms. It helps
him to solve the problems for the benefit of the entire
organization. It helps the manager to fix goals for the
whole organization and to plan for every situation.
According to Prof. Robert Katz, conceptual skills are
mostly required by the top-level management because
they spend more time in planning, organizing and
problem solving.
 Skils of Management
2. Human Relations 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. This is so,
since all managers have to interact and work with
people.
 Skills of Management
3. Technical Skills
A technical skill is the ability to perform the given job.
Technical skills help the managers to use different
machines and tools. It also helps them to use various
procedures and techniques. The low-level managers
require more technical skills. This is because they are in
charge of the actual operations
 Skills of Management
3. Technical Skills
A technical skill is the ability to perform the given job.
Technical skills help the managers to use different
machines and tools. It also helps them to use various
procedures and techniques. The low-level managers
require more technical skills. This is because they are in
charge of the actual operations
 Roles of Management
Mintzberg published his Ten Management Roles in his
book, "Mintzberg on Management: Inside our Strange
World of Organizations," in 1990.
The 10 roles are then divided up into three categories, as
follows:
 Roles of Management
Interpersonal Roles
Figurehead – includes symbolic duties which are legal or
social in nature.
Leader – includes all aspects of being a good leader.
This involves building a team, coaching the members,
motivating them, and developing strong relationships.
Liaison – includes developing and maintaining
a network outside the office for information and
assistance.
 Roles of Management
Informational Roles
Monitor – includes seeking information regarding the
issues that are affecting the organization. Also, this
includes internal as well as external information.
Disseminator – On receiving any important information
from internal or external sources, the same needs to be
disseminated or transmitted within the organization.
Spokesperson – includes representing the organization
and providing information about the organization to
outsiders.
 Roles of Management
Decisional Roles
Entrepreneur – involves all aspects associated with
acting as an initiator, designer, and also an encourager
of innovation and change.
Disturbance handler – taking corrective action when the
organization faces unexpected difficulties which are
important in nature.
Resource Allocator – being responsible for the optimum
allocation of resources like time, equipment, funds, and
also human resources, etc.
Negotiator – includes representing the organization in
negotiations which affect the manager’s scope of
responsibility.
Evolution of Management
The Romans, famous for their legions of warriors led by
Centurions, provided accountability through the hierarchy of
authority. The Roman Catholic Church was organized along
the lines of specific territories, a chain of command, and job
descriptions.
Military organizations :
 PRE SCIENTIFIC MANAGEMENT PERIOD

Professor Charles Babbage (UK 1729 -1871): He felt

that the methods of science and mathematics could be
applied to the solution of methods in the place of guess
work for the solution of business problems.
James Watt Junior (UK 1796 - 1848) and Mathew
Robinson Boulton(1770 - 1842): James Watt Junior and
Mathew Robinson Boulton contributed to the
development of management thought by following
certain management techniques in their engineering
factory at Soho in Birmingham.
 PRE SCIENTIFIC MANAGEMENT PERIOD

Robert Owens (UK 1771 - 1858): Robert Owens, the

promoter of co-operative and trade union movement in
England, emphasized the recognition of human element
in industry. He firmly believed that workers' performance
in industry was influenced by the working conditions and
treatment of workers.
Henry Robinson Towne (USA 1844 -1924): H.R Towne
was the president of the famous lock manufacturing
company "Yale and Town". He urged the combination of
engineers and economists as industrial managers. This
combination of qualities, together with at least some
skill
 PRE SCIENTIFIC MANAGEMENT PERIOD

Seebohm Rowntree (UK 1871- 1954): Rowntree created

a public opinion on the need of labour welfare scheme
and improvement in industrial relations.
 CLASSICAL THEORIES

SCIENTIFIC MANAGEMENT (F.W.TAYLOR)

Taylor's four principles are as follows:
• Replace working by "rule of thumb," or simple habit
and common sense, and instead use the scientific
method to study work and determine the most
efficient way to perform specific tasks.
• Rather than simply assign workers to just any job,
match workers to their jobs based on capability and
motivation, and train them to work at maximum
efficiency.
 CLASSICAL THEORIES

SCIENTIFIC MANAGEMENT (F.W.TAYLOR)

Taylor's four principles are as follows:
• Monitor worker performance, and provide
instructions and supervision to ensure that they're
using the most efficient ways of working.
• Allocate the work between managers and workers so
that the managers spend their time planning and
training, allowing the workers to perform their tasks
efficiently.
 CLASSICAL THEORIES

MODREN MANAGEMENT (HENRI FAY0L)

Division of Work – When employees are specialized, output can
increase because they become increasingly skilled and efficient.
Authority – Managers must have the authority to give orders, but
they must also keep in mind that with authority comes
responsibility.
Discipline – Discipline must be upheld in organizations, but
methods for doing so can vary.
Unity of Command – Employees should have only one direct
supervisor.
Unity of Direction – Teams with the same objective should be
working under the direction of one manager, using one plan. This
will ensure that action is properly coordinated.
 CLASSICAL THEORIES

MODREN MANAGEMENT (HENRI FAY0L)

Subordination of Individual Interests to the General Interest –
The interests of one employee should not be allowed to become
more important than those of the group. This includes managers.
Remuneration – Employee satisfaction depends on fair
remuneration for everyone. This includes financial and non-
financial compensation.
Centralization – This principle refers to how close employees are
to the decision-making process. It is important to aim for an
appropriate balance.
Scalar Chain – Employees should be aware of where they stand in
the organization's hierarchy, or chain of command.
Order – The workplace facilities must be clean, tidy and safe for
employees. Everything should have its place.
 CLASSICAL THEORIES

MODREN MANAGEMENT (HENRI FAY0L)

Equity – Managers should be fair to staff at all times, both
maintaining discipline as necessary and acting with kindness
where appropriate.
Stability of Tenure of Personnel – Managers should strive to
minimize employee turnover. Personnel planning should be a
priority.
Initiative – Employees should be given the necessary level of
freedom to create and carry out plans.
Esprit de Corps – Organizations should strive to promote team
spirit and unity.
 CLASSICAL THEORIES

BUREAUCRATIC THEORY OF ORGANIZATION (MAX

WEBER)
1. Administrative Class:
Bureaucratic organisations generally have administrative class
responsible for maintaining coordinative activities of the
members.
2. Hierarchy:
The basic feature of bureaucratic organisation is that there is
hierarchy of positions in the organisation. Hierarchy is a system of
ranking various positions in descending scale from top to bottom
of the organisation. In bureaucratic organisation, offices also
follow the principle of hierarchy that is each lower office is subject
to control and supervision by higher office
 CLASSICAL THEORIES

BUREAUCRATIC THEORY OF ORGANIZATION (MAX

WEBER)
3. Division of Work:
Work of the organisation is divided on the basis of specialisation
to take the advantages of division of labour. Each office in the
bureaucratic organisation has specific sphere of competence.
4. Official Rules:
A basic and most emphasised feature of bureaucratic organisation
is that administrative process is continuous and governed by
official rules.
5. Impersonal Relationships:
A notable feature of bureaucracy is that relationships among
individuals are governed through the system of official authority
 CLASSICAL THEORIES

BUREAUCRATIC THEORY OF ORGANIZATION

(MAX WEBER)
6. Official Record:
Bureaucratic organisation is characterised by maintenance of
proper official records. The decisions and activities of the
organisation are formally recorded and preserved for future
reference.individuals are governed through the system of official
authority
 NEO-CLASSICAL THEORIES

DOUGLAS MC GREGOR’S THEORY X & THEORY Y

Theory X is based on a pessimistic view of employee
motivation and behavior. Theory X assumes that
employees dislike work, are not ambitious, want to avoid
responsibility, dislike change, and are self-centered.
Managers who hold these assumptions believe that
employees can only be motivated by money, promotions,
and job security. Such managers are likely to use more of
a command and control approach with their employees.
Employees will cooperate if they feel their basic needs
for income and security will be met.
 NEO-CLASSICAL THEORIES

DOUGLAS MC GREGOR’S THEORY X & THEORY Y

Theory Y is based on an optimistic view of employee motivation
and behavior. Theory Y assumes that employees enjoy work that is
meaningful, are willing to take on responsibility, and are willing to
work for organizational goals or causes they believe in. Theory Y
also assumes that employees are capable of creativity, ingenuity,
and self-direction.
Managers who hold these assumptions believe that employees are
motivated not just by material needs, but also by higher-level
needs, such as self-esteem and a sense of fulfillment. Since these
are continuous needs throughout life, managers should address
these needs when seeking to motivate employees.
 NEO-CLASSICAL THEORIES

HAWTHORNE EXPERIMENTS

• Illumination Experiments (1924-1927)

• Relay Assembly Test Room Experiments (1927-1932)
• Experiments in Interviewing Workers (1928- 1930)
• Bank Wiring Room Experiments (1931-1932)
 MODERN THEORIES

SYSTEMS’S THEORY (Ludwig von Bertalanffy):

A system is a collection of elements or components that are

organized for a common purpose

CHARACTERSTICS;
INTER RELATEDNESS
INTER DEPENDENCY
INTER CONNECTEDNESS

TYPES ;
OPEN SYSTEM
CLOSED SYSTEM
 MODERN THEORIES

SYSTEMS’S THEORY (Ludwig von Bertalanffy):

A system is a collection of elements or components that are

organized for a common purpose

CHARACTERSTICS;
INTER RELATEDNESS
INTER DEPENDENCY
INTER CONNECTEDNESS

TYPES ;
OPEN SYSTEM
CLOSED SYSTEM
 MODERN THEORIES

Contingency Approach of Management (Professor

Fred Fiedler)

A contingency approach to management is based on the theory

that management effectiveness is contingent, or dependent, upon
the interplay between the application of management behaviors
and specific situations. In other words, the way you manage should
change depending on the circumstances. One size does not fit all.
 MODERN THEORIES

BEHAVIOURAL THEORY (OR) SOCIAL

LEARNING THEORY (ALBERT BANDURA)

Social learning theory, introduced by psychologist ALBERT

BANDURA, proposed that learning occurs through observation,
imitation, and modeling and is influenced by factors such as
attention, motivation, attitudes, and emotions. The theory accounts
for the interaction of environmental and cognitive elements that
affect how people learn.
 Key Differences between Management and Administration

1. Management is a systematic way of managing people and things

within the organization. The administration is defined as an act of
administering the whole organization by a group of people.
2. Management is an activity of business and functional level, whereas
Administration is a high-level activity.
3. While management focuses on policy implementation, policy
formulation is performed by the administration.
4. Functions of administration include legislation and determination.
Conversely, functions of management are executive and governing.
5. Administration takes all the important decisions of the organization
while management makes decisions under the boundaries set by the
administration.
 Key Differences between Management and Administration

6. A group of persons, who are employees of the organization, is

collectively known as management. On the other hand, administration
represents the owners of the organization.
7. Management can be seen in the profit making organization like
business enterprises. Conversely, the Administration is found in
government and military offices, clubs, hospitals, religious
organizations and all the non-profit making enterprises.
8. Management is all about plans and actions, but the administration is
concerned with framing policies and setting objectives.
9. Management plays an executive role in the organization. Unlike
administration, whose role is decisive in nature.
10. The manager looks after the management of the organization,
whereas administrator is responsible for the administration of the
organization.
 Key Differences between Management and Administration

11. Management focuses on managing people and their work. On the other hand,
administration focuses on making the best possible utilization of the organization’s
resources.
 Introduction to Planning

Planning as a process involves the determination of future course of

action, that is why an action, what action, how to take action, and
when to take action. These are related with different aspects of
planning process.

Terry has defined planning in terms of future course of action i.e.,

“planning is the selection and relating of facts and making and using of
assumptions regarding the future in the visualisation and formalisation
of proposed activities believed necessary to achieve desired result.”
 Introduction to Planning

McFarland has defined Planning as “a concept of executive

action that embodies the skills of anticipating,
influencing and controlling the nature and direction of
change.”

Peter Drucker defined as “planning is the continuous process

of making present entrepreneurial decisions systematically
and with best possible knowledge their futurity, organizing
systematically the efforts needed to carry out these decisions
and measuring the results of these decisions against the
expectation through organised systematic feedback.”
 Introduction to Planning

In the words of Koontz and O’Donnell, “planning is

deciding in advance what to do, how to do it, when to do
it, and who is to do it. Planning bridges the gap from
where we are to where we want to go.”
 Importance of Planning

1. Reduces Uncertainty
2. Focus on Objectives/Goals
3. Economical Operation
4. Facilitates Control
5. Encourages Innovation and Creativity
6. Improves Motivation
7. Avoids Random Activity
8. Improves Competitive Strength
9. Focuses attention on objectives and results
10. Establishes a basis for teamwork
11. Helps anticipate problems and cope with change
12. Better coordination
 Types of Planning

The process of planning may be classified into different categories

on the following basis:

(1)Nature of Planning:
a. Formal Planning
b. Informal Planning:

(ii) Duration of Planning:

a. Short term Planning:
b. Intermediate Planning
c. Long-Term Planning
 Types of Planning

(iii) Levels of Management:

a. Strategic Planning:
b. Tactic planning
c. Operational planning

(iv) Use:
a. Standing Plan:
b. Single Use Plan:
 Steps in Planning

As planning is an activity, there are certain reasonable measures for

every manager to follow:

(1) Setting Objectives

(2) Developing Planning Premises
(3) Identifying Alternative Courses of Action
(4) Evaluating Alternative Course of Action
(5) Selecting One Best Alternative
(6) Implementing the Plan
(7) Follow Up Action
 Decision Making

Decision-making is the selection based on some criteria from two or

more possible alternatives. “-—George R.Terry
A decision can be defined as a course of action consciously chosen
from available alternatives for the purpose of desired result —J.L.
Massie
A decision is an act of choice, wherein an executive forms a conclusion
about what must be done in a given situation. A decision represents a
course of behaviour chosen from a number of possible alternatives. -—
D.E. Mc. Farland
From these definitions, it is clear that decision-making is concerned
with selecting a course of action from among alternatives to achieve a
predetermined objective.
Importance of Decision making
Steps of Decision Making
 Management by Objectives

Management by Objectives (MBO) is a strategic approach to

enhance the performance of an organization. It is a process
where the goals of the organization are defined and conveyed by
the management to the members of the organization with the
intention to achieve each objective.

An important step in the MBO approach is the monitoring and

evaluation of the performance and progress of each employee
against the established objectives. Ideally, if the employees
themselves are involved in setting goals and deciding their course
of action, they are more likely to fulfill their obligations.
Steps in Management by Objectives Process
 Benefits of Management by Objectives
• Management by objectives helps employees appreciate their on-
the-job roles and responsibilities.
• The Key Result Areas (KRAs)planned are specific to each employee,
depending on their interest, educational qualification, and
specialization.
• The MBO approach usually results in better teamwork and
communication.
• It provides the employees with a clear understanding of what is
expected of them. The supervisors set goals for every member of
the team, and every employee is provided with a list of unique
tasks.
• Every employee is assigned unique goals. Hence, each employee
feels indispensable to the organization and eventually develops a
sense of loyalty to the organization.
• Managers help ensure that subordinates’ goals are related to the
objectives of the organization.