PAPER No.1: MANAGEMENT CONCEPTS AND ORGANISATION BEHAVIOUR MODULE NO.1: SCHOOLS OF MANAGEMENT THOUGHT

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1 Subject Management Concepts and Organizational Behaviour Paper No and Title 1: Management Concepts and Organisational Behaviour Module No and Module 1: Schools of management thought Title Module Tag COM_P1_M1 TABLE OF CONTENTS

1. Learning Outcomes Through this module, you will gather information to: 2. Management Managing as an activity is considered to be of paramount significance.

3 1. Learning Outcomes Through this module, you will gather information to: 2. Management Managing as an activity is considered to be of paramount significance. Ever since human beings started forming groups in order to achieve targets, that were not attainable individually, managing has played a big role to ensure the coordination of individual efforts. Management involves making others work and obtaining the desired level of work by giving direction to their efforts in an integrated and coordinated manner that is required to attain business objectives. It is a process comprising of functions such as planning, organizing, actuating and controlling business operations in such a manner that is necessary to achieve the premeditated goals. It also involves securing men, materials, money and machinery required for the achievement for business objectives and putting all of them into operation and checking their performance so to assure the productive and beneficial use of the material resources. It consists of all organizational activities that require formation of goal and achievement, performance appraisal and the development of an operating philosophy that ensures organization survival. 3. Management: Defined

Here are the examples of some managers you may know: Mark Zuckerberg at facebook; Timothy D. Cook at Apple Computer; Barack Obama, President of the United States. All do manage organizations.

4 Here are the examples of some managers you may know: Mark Zuckerberg at facebook; Timothy D. Cook at Apple Computer; Barack Obama, President of the United States. All do manage organizations. The following are a few of the important definitions of the term management. 4. Organization: Defined It can be defined as a cluster of people functioning jointly and coherently to produce a surplus. Some of the examples of the same are: governments, nongovernmental organizations, corporations, international organizations, armed forces, charities, partnerships, cooperatives, not-for-profit corporations and universities. In business organizations, this surplus is profit. In nonprofit organizations such as charitable organizations, it may be satisfaction of needs. Universities too, generate a surplus through creation and dispersal of information and by providing community or society service.

5 5. Levels of management Decentralizing authority and responsibility among the subordinates created what we term as levels of management. The process of decentralizing authority and responsibility among the various executives is called the creation of levels of management. In other words, it revolves around categorization of superior- subordinate relationship in an organization. There isn t a stipulated number of management levels specified for a particular organization and this depends, majorly, on how they are defined and classified, the nature of organization, size of enterprise, etc. For the convenience of study, the management levels may be classified into three groups: 6. The functions of Management Management involves the following functions: The above functions have to be carried out by each and every worker irrespective of any form of organization. The functions are

6 interdependentand hence it is possible for a worker to perform them simultaneously at once. This implies that the functions are not mandatorilyperformed in a sequence and it is not a principle to complete one function completely before the next function is undertaken Managing: Art or Science? 8. The evolution of management thought This can be studied under the following headings:

7 Pre scientific management period F.W. Taylor s scientific management theory laid down the foundation for actual development of management, though few concept building was done by thinkers previous to him. Initial thoughts find their sources in military organizations, Roman Catholic Church, the CameraliastsEarly management thoughts have come from:

8 The contributions of management thinkers started above were restricted majorly to the area of developing the concept to make resources more

effective at the shop floor levels. These additions were made gradually and in a random, chaotic manner and have faltered in stimulating management as a distinct field for further study.

A foundation was laidby the end of the 19th century for making a systematic study of management and the inauguration was done by Fredrick Taylor at the beginning of the 20th century.

9 effective at the shop floor levels. These additions were made gradually and in a random, chaotic manner and have faltered in stimulating management as a distinct field for further study. However, the various ideas started by them have created awareness about managerial problems. A foundation was laidby the end of the 19th century for making a systematic study of management and the inauguration was done by Fredrick Taylor at the beginning of the 20th century. His theory came to be known as theory of Scientific Management. Early management approaches Scientific management: F.W Taylor, Gilberth, Lillian Gilberth, Gantt and others have made humungous additions to the concept of scientific management. Of all, Taylor s contribution is of most importance and consequently, he is considered as the father of scientific management. We shall present here the contributions of Taylor and some others. Fredrick Winslow Taylor ( ) was chief engineer in the Midvale Steel Works where he joined as a worker. Afterwards, he worked in the Bethlehem Steel Works and after retirement from his concern, he worked as a consultant. Taylor, has put forward that the utmost importance should be given to safeguarding the max. prosperity for each employer and employee.according to Taylor, scientific management, to its core, involves a certain philosophy which leads to the mixture of 4 great principles of management, viz. When management of a business unit is based on a systematic study and analysis of various aspects of work involved with a view to find out the best way of completing things, we refer to it as scientific management of

10 business. Broadly speaking, SM is the skill of finding out what is required to be performed and how, most effectively, to do it. Taylor noticed that inefficiency abounds in the organization because of three reasons/factors, viz The elements of scientific management are: (a) determination of the task, (b) planning of industrial operations, (c) appropriate selection and training of workers, (d) improvement in methods of work, (e) modification of organization, and (f) mental revolution. Determination of task uses 1.method study, 2.routing, 3. motion study, 4. time study, 5. fatigue study and 6. differential piece- wage system. After setting the task to workers, the ensuing step is to plan production, which requires the planning of industrial operations. This involves further considerations, viz., what work shall be done, how the work shall be done, where the work shall be done and when the work shall be done. Appropriate selection and training of workers and also their correct placement have to be performed by the management. Further, to make the workers finish the task as per the conditions conditioned by the management, there is need for improvement in the methods of work. This involves standardization of tools and equipment, speed, conditions of work and materials. Taylor also suggested modification in the organization. This encapsulates introduction of functional foremanship. According to functional foremanship, the 2 functions of planning and doing are divided. He has also advised 8 functional foremen, viz., (a) route clerk, (b) instruction card clerk, (c) cost and time clerk, (d) gang boss, (e) speed boss, (f) repair boss, (g) inspector, and (h) shop disciplinarian. A complete overhaul in the mental perspective on the part of employer and employee is called for and cooperation and goodwill should be a consequence of their mutual animosity and suspicion.

It was after this year that a English translation of the said book was bought out.

He specifically distinguished the aberration between technical and managerial skills and stressed that supervisor should be

11 ADMINISTRATIVE THEORY OF MANAGEMENT (H. Fayol ) General and Industrial management, Fayol s book in French went to print in It was after this year that a English translation of the said book was bought out. Fayol regarded management as a distinct set of skills or functions performed by a supervisor in an organization. He specifically distinguished the aberration between technical and managerial skills and stressed that supervisor should be competent in both. He propounded that the lower level tend to utilize more of technical ability rather than managerial ability which is most utilized by top management. Fayol has suggested 14 principles that capture the essence of management process: The 14 principles of management are:

13 Fayol also stated that all operations in business organizations can be classified under 6 heads, viz.. Human relations movement Elton Mayo, who is considered to be the founder of human relations movement, and his associates, conducted the Hawthorne Studies in the Hawthorne plant of Western Electric Company, USA during They stated that the employees morale had a great authority on productivity and the manager should consider them as social beings instead of economic beings or simply as cogs of a wheel. It is a pre-requisite for a manager to comprehend the attitudes and behavior of the group if he is willing to provide a solution of any management problem. Every employee is to be regarded as a member of the group. This theory focuses on the significance of human and social factors while giving due consideration to human relations within and external to a group, while the classical theory of Taylor and Fayol gave importance to job content and management of physical resources. This theory served to focus attention on the social side of the work and man, as opposed to the economical and technical aspects. The Hawthorne theory did not present any empirical evidence concluding to the fact that as morale of a worker increases, the productivity too increases. Hence, the study suffered from management bias, and that the samples were too small. Despite these criticisms, the contribution of human relations remains and are being applied even today by managers.

14 Modern management approaches BEHAVIORAL SCIENCE MOVEMENT: The behavioural approach applies the knowledge of behavioural sciences- psychology, sociology and anthropology- to managing people. Behavioural scientist have made significant contributions to our comprehension of individual motivation, group behavior, inter-personal relationship at work, and the importance of work to human beings. They have virtually laid the foundation for the emergence of an exciting discipline, human resource management which emphasizes the effective utilization of human resources in organizations.

SYSTEMS APPROACH: Systems theory is the big-picture approach that overcomes the problem of giving a small and narrow perspective to everything.

Hence, a manager can have a birds-eye-view of the entire organization which is a subset of a greater, larger external environment.

changing, a best performance by the production department of the same firm will be of no significance and hence the overall performance of the firm would be beyond

CONTINGENCY (SITUATIONAL) APPROACH: The principles governing the management that we have studied so far suffers from a drawback; only a handful of principles are universal.

As the name suggests, this theory propounds that solution to a problem should be based on the situations and conditions of that specified problem.

15 SYSTEMS APPROACH: Systems theory is the big-picture approach that overcomes the problem of giving a small and narrow perspective to everything. This approach considers a firm or a company as a whole, which is a sum of many smaller interdependent parts, having some purpose of existence. Hence, a manager can have a birds-eye-view of the entire organization which is a subset of a greater, larger external environment. For instance, this approach will pinpoint that until and unless the marketing department of the organization is not able to secure sales of the consumers whose taste is ever changing, a best performance by the production department of the same firm will be of no significance and hence the overall performance of the firm would be beyond satisfactory. CONTINGENCY (SITUATIONAL) APPROACH: The principles governing the management that we have studied so far suffers from a drawback; only a handful of principles are universal.it has been shown through various studies that methods used in one circumstance seldom work the same way in others. As the name suggests, this theory propounds that solution to a problem should be based on the situations and conditions of that specified problem. Hence, each situation may require a unique solution.no single way of solving problems is best for all situations. Because tasks and people in organizations differ, the contingency theorists (Selznik, Burns and Stalker, Woodward, Lawrence and Lorsch, James Thompson) argue, the method of managing them must also differ. Effective management varies with the organization and its environment. This approach is both analytical and situational, with the purpose of developing a practical answer to the question at hand. 10. Summary

EVOLUTION OF MANAGEMENT CLASSICAL THEORY (TRADITIONAL)

EVOLUTION OF MANAGEMENT CLASSICAL THEORY (TRADITIONAL) EVOLUTION OF MANAGEMENT Management thinking in the current economic situation (1970 onwards) can best be understood in the light of its historical development. Similarly, the future of management thought