UNIT I
Introduction to Management
Concept of Management: Need for Study
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Business management refers to functions that aim at the effective use of individuals and resources in a corporation to realize business objectives. So, it's a way to an end. Basically, there are five functions in business management, and that they are:
Planning is that the start line. during this phase, you create your business plan and the way you're getting to achieve it. But it's not as easy because it seems. you would like to form a sensible assessment of your business objectives and map the detailed strategies (with full back up plans just in case those strategies fail) through which your company are able to do its business objectives.
The organization follows the design. Here you organize all of your resources like employees, machines and finances in one well-oiled unit. you would like to urge of these combinations and timing correctly. Organizing helps you define "who goes to try to what". Established well-defined job roles, organizational hierarchies, and streamlined coordination between them.
Staffing cares with acquiring, deploying, and retaining the proper skilled workforce to deliver business results. The goal of staffing is to make the proper positive impacts on the effectiveness of the organization. Through staffing, you get the proper people within the right jobs who do the proper things. In short, this is often a correct delegation.
Leading is that the most vital function of the management process. Without a motivated workforce, you'll never be ready to achieve your business goals. Leading is about how you'll align employee tasks with the general goals of the organization. Leading is how you'll motivate, influence, and encourage your employees to perform at their best at work. Leading is how you'll involve your employees voluntarily within the growth and development of the corporate.
Control is a lively and constant monitoring of the people, processes and other resources of your company. Here you track the performance of all the resources in your company and confirm they're on the proper track. Through monitoring, you'll accurately assess whether all company resources are optimally used for desired business tasks. And make corrections whenever and wherever there are deviations, errors and gaps.
For a nation's economy, business growth is extremely important. However, the processes involved in a company are complex. It is the way in which the administration of a business is managed, which governs the parameters of a business's success. There are numerous factors that must be considered when running a business. It is important that there is a person who has experience.
What is Business Management?
Companies have a tray of activities that must be kept in line for the proper functioning of the business so that it grows in all aspects and achieves a name in the market. In a country like India, where many start-ups live but can never stay in the market, one of the main reasons for the downfall of many companies may be a failure in managing the business and its activities.
The dynamics and success factors are extremely difficult to understand according to different markets, where the frequency of changing market demands is very high.
BM deals with the management and handling of all commercial activities that include and pertain to clients, the supervision and administration of the financial, accounting and marketing aspects of a company.
Business management has become one of the top career choices over the usual career prospects such as engineering and medicine.
There are several concepts related to business management which are listed below:
Business operations:
Business operations are a set of activities that are repeated and improve business operations, generating better investment value for the company's stakeholders. Business operations involve a group of business processes that aim to realize a specific goal.
Business processes:
Business processes would mean a set of activities directed towards a particular objective to provide a service or product. There are separate business processes for operations, administration, and support.
Helps achieve group objectives: order factors of production, gather and organize resources, integrate resources effectively to achieve objectives. Directs the group's efforts toward achieving predetermined goals. By clearly defining the objective of the organization, there will be no loss of time, money and effort. These resources are coordinated, directed and controlled in such a way that the company works to achieve the objectives.
Optimal use of resources: Management uses all physical and human resources productively. This leads to efficient handling. Management provides the maximum utilization of scarce resources by selecting its best possible alternative use in the industry among various uses. It makes use of experts, professionals and these services lead to the use of their skills, knowledge and proper use and avoid waste. If employees and machines are producing at their best, there is no underutilization of any resources.
Reduce costs - Get maximum results through minimal input through proper planning, and using minimal input and getting the most out of it. Management uses physical, human and financial resources in such how on end in the simplest combination. This helps in reducing costs.
Establish a solid organization: no overlapping efforts (fluid and coordinated functions). Establishing a solid organizational structure is one of the objectives of the administration that is in tune with the objective of the organization and for the fulfilment of this, establishes an effective relationship of authority and responsibility, that is, who is responsible to whom, who can give instructions to who, who are the superiors. and who are subordinates. Management occupies various positions with the right people, with the right skills, training and qualifications. All jobs must be authorized for everyone.
Establishes the balance: allows the organization to survive in a changing environment. Keeps in touch with the changing environment. With the change in the external environment, the initial coordination of the organization must be changed. Therefore, it adapts the organization to the changing demand of the market / changing needs of societies.
Essential for the prosperity of society: efficient management leads to better economic production which in turn helps increase people's well-being.Increase profit which is beneficial for businesses and society you will get the most out of it at the least cost by creating income-generating employment opportunities in your hands.
Management characteristics:
It is almost impossible to understand the concept of management in a nutshell. The best way to understand the management concept, nature and scope by describing its features
1. Management may be a process: continuous, social and unique:
Management is a continuous process because an organization continues perpetually and needs solutions to problems continuously. A process features a beginning and an end, and management begins with planning and ends with control and restarts with planning. It is a social process because it is managed by people (employees and managers) for people (clients) and by people (investors and society in general).
It is a unique process because it involves group activities; It is integrative in nature since it interlaces different resources in a coordinated way; and intangible in appearance (since the presence of management is felt solely through performance).
2. Management is a science, an art and also a profession:
Management has all the makings of being a science, but it is a soft science rather than a hard science (where 2 + 2 may not always be 4) because it is about human beings, whose behaviour is more difficult to predict.
Art refers to practical application, through creative use of the body of knowledge to obtain desired results through personal possession of skill where there is room for personal judgment. In this way, management is definitely an art, since it is a social process.
Two doctors who prescribe the same drugs to two different patients with the same disease may have different results with different doses. Management is rightly called the art of the arts. Since management is both a science and an art, it is correct to call it artistic science (art-based science) or scientific art (science-based art).
Management is not a profession like accounting, law or medicine, which are thousands of years older than management, because no qualification is essential to be a manager, there is a main body, All India Management Association, but its membership it is not mandatory.
However, management is becoming a profession as management education expands and businesses demand managers who are fully professional. With liberalization, globalization and privatization, the demand for professional managers will increase even more.
3. Management influences and is influenced by the environment:
Management does not work in a vacuum. It has to deal with the internal (controllable) and external (non-controllable) environment. The internal environment consists of employees, processes, and systems. The external environment comprises STEEPLE (social, technological, economic, ecological, political, legal and ethical environments).
The internal environment indicates strengths and weaknesses and the external environment indicates opportunities and threats. Management tries to turn threats into opportunities and weaknesses into strengths; but sometimes it changes depending on the environment.
4. The core of management is making decisions:
When Peter F. Drucker said that "everything a manager does, he does through decision making," he was very clear that the core of management was decision making.
Since management is interdisciplinary (management has borrowed concepts from economics, psychology, sociology, anthropology, law, mathematics, statistics, etc.), it makes use of multiple and interdisciplinary knowledge to make decisions and makes use of authority to obtain them. enforceable decisions.
5. Management is goal-oriented:
The management process is a purposeful activity and begins and ends with goals. All organizations, both for-profit and non-profit, are goal oriented. It is the responsibility of management to achieve these objectives.
Without goals, an organization would be like a ship without rudders. Management always starts with goals and remains aware of their achievement. If there are any gaps in performance and goals, management tries to harmonize them with each other. Management cares as much about efficiency as it is about its effectiveness.
6. Managers bring the organization to life:
"Good managers can propel an organization into unprecedented realms of success, while bad managers can devastate even the strongest companies." It is the management that can give life through its dynamism to the management process in this turbulent business environment. When things go well, the credit goes to management and when it is the other way around, the first victim is management.
7. Management is a multidisciplinary and multifaceted activity:
It is multidisciplinary because it is a young discipline and has borrowed most of the concepts from other disciplines such as economics, sociology, psychology, anthropology, mathematics, law, politics, etc.
However, it has begun empirical research to develop itself. It is multi-faceted because managers have to play different types of roles, many of them at the same time.
Managerial Functions – An overview
Regardless of the size, nature and type of organization, all managers must perform some basic functions which are as follows:
(a) Planning:
Planning is always the first function that every manager performs. Planning refers to “deciding beforehand what to try to, the way to roll in the hay, when to try to it, and who goes to try to it. Planning bridges, the gap between where we are today and where we want to go”. Every manager begins by deciding in advance the objectives of a company and how to achieve them. Planning is that the foundation of all other management functions.
(b) Organize:
After establishing the plans, the next role of each manager is to organize the activities and establish an organizational structure to execute the plan. Establishing the organizational structure means deciding the framework how many units and subunits or departments are needed, how many positions or designations are needed in each department, how to distribute authority and responsibility among different people. Once these decisions are made, an organizational structure is established.
(c) Staffing:
third step or function of a manager is Staffing. It refers to recruiting, selecting, appointing employees, assigning functions to them, maintaining cordial relationships, and handling employee complaints. It also includes training and developing employees, deciding their compensation, promotion, raises, etc., evaluating performance, keeping personal records of employees.
(d) Lead:
Once employees are appointed, they need to be trained and the job done. Leading refers to giving directions or instructions to employees motivating them, supervising the activities of employees, communicating with them. Managers act as leaders and guide them in the right direction, so the management function includes, supervising, motivating, communicating and leading.
(e) Control:
This is the last function of the managers. In this role, managers try to match actual performance with planned performance, and if there is no match between the two, managers try to find out the reasons for the deviation and suggest corrective measures to get on track. Control functions refer to all performance measures and follow-up actions that keep actual performance on track.
Co-ordination: Essence of Managership
When the organizational structure is made and departments are designed, managers coordinate the activities of those departments to realize the organization's goals. Senior managers communicate organizational goals to departmental managers and help them perform the design, organizing, staffing, directing, and controlling functions of their respective departments.
They integrate the objectives of the organization with the objectives of the departments and harmonize the departmental goals with the organizational goals. It helps each managerial function and every departmental activity contribute to organizational goals.
1. Coordination during planning:
When plans are made, managers make sure that the various sorts of plans (long and short term, strategic and routine), policies, rules and procedures operate consonant and coordination with one another in order that various departments follow these plans. effective way.
2. Coordination during the organization:
The division of labor into departments on the idea of the similarity of activities, the appointment of individuals to manage these departments, the definition of their authority and responsibility and therefore the creation of the organizational structure is aimed toward coordinating departmental activities with organizational objectives. If activities are randomly divided without coordination, some activities might not be assigned to people et al. could also be assigned to quite one person.
3. Coordination during staffing:
After jobs are created, managers make sure that people fill different jobs consistent with their skills and skills . This ensures that you simply place the proper person at the proper job to realize coordination between your work activities.
4. Coordination during management:
When a manager directs his subordinates through motivation, leadership and communication, he tries to coordinate the activities of the organization. it's also an effort to harmonize individual goals with the goals of the organization. Management maintains unity and integrity among the activities of the members of the organization.
5. Coordination while controlling:
Control ensures that actual performance is in accordance with planned performance. the aim of control through budgets or information systems is to coordinate the various organizational activities. All management activity is, therefore, coordinated to contribute to the organization's objectives. Coordination is required throughout the organization.
Management principles like unity of command and scalar chain facilitate the task of managers within the effective coordination of managerial functions.
Coordination because the essence of management is, therefore, intrinsic to management. Aligning the interior environment with the external environment, human with non-human resources to realize the objectives of the organization, is that the task of all people in the least levels of all departments. Coordination gives meaning and purpose to every task and promotes the group's effort to realize the goal.
Coordination isn't department or function specific. All management functions (planning, organization, staffing, direction and control) of all departments must be coordinated to realize the general objectives. However, the intensity of managerial functions may vary at different times for various departments.
Sometimes coordinated efforts should focus more on planning, while at other times, the main target should be more on control. no matter the degree of care, the essence of coordination highlights its need, which is omnipresent altogether departments, in the least levels, in the least times.
Contemporary organizations are open systems. Their active and continuous interaction with the environment presupposes the presence of a robust coordination system in organizations. Coordination is that the force of organizational success.
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Co-ordination is needed to perform all the functions of management
Evolution of the Management Thought
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Knowing the history behind the evolution of managerial thinking and the evolution of theories is essential. If you are familiar with them, including the development that spawned current business practices, then you will have a better understanding of management principles that can help you manage people more effectively.
The point is that management has changed tons. The emphasis on structure and authority is no longer as strong as it used to be in the past. Now the focus is on the employees. However, there are theories about the factors that motivate employees, but understand that knowing how these theories came about can give you the knowledge you need to manage your employees properly. Read on to understand the evolution of management thinking and management theories.
Evolution of the management concept
The evolution of managerial thinking is a process that began in the early days of man. It started from the time when man saw the need to live in groups. Powerful men were able to organize the masses, share them in various groups. The exchange was made according to the strength, mental capacity and intelligence of the masses.
The point is, management has been practiced in one form or another since civilization began. If you want a good example where advanced management principles were applied, consider the organization of the ancient Roman Catholic Church, military forces, and ancient Greece. These are all excellent examples. But the industrial revolution brought a drastic change. And suddenly, the necessity to develop a more holistic and formal management theory became a necessity.
- Explain the evolution of managerial thinking
- Stages in the evolution of managerial thinking
You cannot understand what it implies or appreciate how it happened without looking at the various areas where it happened. For a better understanding, the evolution of management thinking will be shared in four different stages. These include:
- Prescientific management period
- Classical theory
- Neoclassical theory or behavioural approach
- Max Weber's Bureaucratic Model
- The prescientific management periods
The industrial revolution that happened within the 18th century had a big impact on management as an entire. It changed the way companies, as well as individuals, raised capital; organize work and the production of goods. Entrepreneurs had access to all factors of production such as land, labor, and capital. Theirs was to make an effort to combine these factors to successfully achieve a specific goal.
However, the new dimension that management took after the industrial revolution cannot be discussed without mentioning notable personalities who contributed their quarter. They were ready to introduce useful ideas and approaches to offer management a particular and universally acceptable direction. Here are some of them.
Professor Charles Babbage - United Kingdom (1729-1871)
Robert Owens - United Kingdom (1771-1858)
Robert was considered the father of personnel management because of his focus and focus on employee well-being. He introduced cooperation and unions. Robert believed that employees' well-being could determine their performance to a great extent. He promoted the training of workers, the education of their children, canteens in the workplace, the reduction of working hours, among others.
Other contributors to the prescientific management period include:
- Henry Robson Towne - United States
- James Watt Junior - United Kingdom
- Seebohm Rowntree - United Kingdom
Classical theory
But its contribution to the evolution of management is limited. The beginning of what is known as management science began in the last decade of the 19th century. Names like Emerson, F.W. Taylor, H.L. Grant et al. paved the way for the establishment of what's called scientific management.
During the classical period, managerial thinking focused on work content, standardization, division of labor, and a scientific approach to organization. It was also closely related to the industrial revolution, as well as the rise of large-scale companies.
Neoclassical theory
This period of evolution of management thinking is an improvement on classical theory. In other words, he modified and improved the classical theory. For example, classical theory focused more on the area of job content, including the management of physical resources, while neoclassical theory placed a deeper emphasis on employee relationships in the work environment.
A German sociologist named Max Weber proposed this model. And it includes a system of rules, the division of labor that depends on functional specialization, legal authority and power, the hierarchy of authority, and the location of employees based on their technical competence.
The evolution of management theories
Organizations have been formed and through the writings of various writers. Its writing consisted of the government of the kingdoms and the management of humans. And these formed the literature that aided in the development of management theories. And these management models were also offered by military, political and religious organizations.
For example, Sun Tzu's book "The Art of War" was written in the 16th century BC. C. Sun was also a general in the Chinese Army. However, Sun's book writings were also used for management purposes.
The book emphasizes that it is possible to achieve success by using the strength of the organization to exploit the weakness of rivals. Another great book was Chanakya's Arthashastra. It was written in the 3rd century BC. C. and focused on the government of the kingdom in regards to the formulation of government policies and people management.
Conclusion
The evolution of management started from civilization. So what we have now are refined and improved management thoughts and theories. It will help to improve the knowledge of the process and will effectively use the management principles for the improvement of the organization.
Classical Approach –Fayol
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Henry Fayol, the father of recent management, has developed a group of management principles. Fayol wrote perceptibly supported his practical experience as a manager. Fayol argued that there's one "management science" whose principles are often utilized in all management situations regardless of what sort of organization is being managed.
Fayol argued that the activities of an industrial company are often grouped into six categories: (i) technical (production), (ii) commercial (purchase, sale and exchange), (iii) financial (search and optimal use of capital), (iv ) security (protection of property and people), (v) accounting (including statistics); and (vi) managerial.
He developed the subsequent principles underlying the management of all kinds of organizations:
HENRY FAYOL'S FOURTEEN MANAGEMENT PRINCIPLES:
1 Authority and responsibility goes hand in hand Fayol argued that authority flows from responsibility. Managers who exercise authority over others must take responsibility for both decisions and results. He viewed authority as a corollary of responsibility. Authority is both official and private. Official authority springs from the manager's position within the organizational hierarchy and private authority is formed from intelligence, experience, moral worth, past service, etc. A corollary of the principle that no manager should tend authority unless he assumes responsibility is that those that have responsibility should even have corresponding authority so as to enable them to initiate action over others and command the resources necessary for the performance of their functions.
2. Unity of command: This principle holds that an employee should have just one boss and receive instructions from him only. Fayol discovered that if this principle is disobeyed, authority is going to be undermined, discipline are going to be jeopardized, order are going to be disturbed and stability are going to be threatened. Dual control may be a permanent source of conflict. Therefore, in every organization, each subordinate must have a superior whose mandate he must obey.
3. Unity of direction: this suggests that each one the executive and operational activities that relate to a special group with an equivalent objective must be directed by “a boss and an idea. However, it doesn't mean that each one decision must be made up of above. It just means all related activities should be led by one person. for instance, all marketing activities like product strategy and policy, advertising and advertisement, channel policy, product pricing policy, marketing research, etc., should be under the controlled by a manager and directed by an integrated plan.
4. Scalar chain of command: consistent with Fayol, the scalar chain is that the chain of superiors that goes from the very best authority to rock bottom ranks. the road of authority is that the route followed through each link within the chain by all communications that start from or attend the last word authority.
5. Division of labor: this is often the principle of specialization that, consistent with Fayol, applies to all or any sorts of work, both managerial and technical. It helps an individual acquire a skill and precision with which he can do more and better work with an equivalent effort. Therefore, the work of everyone within the organization should be limited the maximum amount as possible to the performance of one leadership role.
6. Discipline: Discipline may be a sine qua non condition for the right functioning of a corporation. The members of a corporation must perform their functions and behave in reference to others in accordance with rules, norms and customs. consistent with Fayol, the simplest thanks to maintain discipline is: (i) to possess good superiors in the least levels; (ii) agreements (entered into with individual employees or with a union, because the case may be) that are the foremost clear and fair as possible; and (iii) sanctions imposed with criteria.
7. Subordination of the individual interest to the general interest: The interest of the organization is above the interests of the individual and the group. It can only be achieved when senior managers in the organization set an example of honesty, integrity, fairness and fairness. It will involve an attitude and a spirit of sacrificing your own personal interests whenever it is evident that those personal interests are in conflict with the interests of the organization. However, it can be emphasized that social and national interests must take precedence over organizational interests whenever the two are opposed to each other.
8. Remuneration: Employees must receive fair and equitable remuneration. Differences in pay should be based on job differences, in terms of employee qualities, application, responsibility, working conditions, and job difficulty. You must also take into account factors such as cost of living, general economic conditions, demand for labor, and the economic status of the business.
9. Centralization: Fayol believed in centralization. However, he did not contemplate the concentration of all decision-making authority in senior management. However, he argued that centralization and decentralization is a matter of proportion. In a small business with a limited number of employees, the owner-manager can give orders directly to everyone. However, in large organizations, where the worker is separated from the CEO through a long scalar chain, decision-making authority must be distributed among several managers to varying degrees. Here one generally encounters a situation of decentralization with centralized control. The degree of centralization and decentralization also depends on the quality of the administrators.
10. Order: Order, in Fayol's conception, means the right person in the right job and everything in its proper place. This type of order depends on a precise knowledge of the human and resource requirements of the concern and a constant balance between these requirements and resources.
11. Fairness: Means that subordinates should be treated fairly and kindly. This is essential to awaken your devotion and loyalty to the company. Therefore, it is the CEO's duty to instil a sense of fairness at all levels of the scale chain.
12. Stability of staff tenure: Management policies should provide a reasonable sense of job security. The hiring and firing of personnel should not depend on the whims of superiors but on well-conceived personnel policies. He points out that it takes time for an employee to learn his job; If they drop out or are discharged in a short time, the learning time is lost. At the same time, those deemed inappropriate should be eliminated and those deemed competent should be promoted. However, "a middle manager who stays is infinitely preferable to top managers who come and go."
13. Initiative: focuses on the ability, attitude and resourcefulness to act without being asked by others. Managers must create an environment that encourages their subordinates to take initiative and responsibility. Since it provides a sense of great satisfaction to smart employees, managers must sacrifice their personal vanity to encourage their subordinates to show initiative. However, it should be limited, according to Fayol, by respect for authority and discipline.
14. Esprit de Corps: Cohesion and team spirit should be fostered among employees. One of the main characteristics of organized activity is that several people work together in close cooperation to achieve common goals. An environment must be created in the organization that induces people to contribute to the efforts of others in such a way that the combined effort of all together promotes the achievement of the general objectives of the company. Fayol warns against two enemies of the esprit de corps, viz. (i) divide and conquer, and (ii) abuse of written communication. It may be to the company's benefit to divide its enemy, but it will surely be dangerous to divide the workers themselves. Rather they should be soldiers in cohesive and highly interactive task forces. Over-reliance on written communication also tends to disrupt team spirit. Written communication, when necessary, should always be complemented by oral communication because face-to-face contacts tend to promote speed, clarity, and harmony.
CONTRIBUTION FROM F.W TAYLOR
His thoughts about management came from his ample workings with three companies: Midvale Steel Works, Simonds Rolling Mills, and Bethlehem Steel Co.
Scientific management 5 principles proposed by Taylor:
1. Science, not a golden rule 2. Harmony, not discord 3. Mental revolution 4. Cooperation, not individualism 5. Development of each and every person towards their greater efficiency and prosperity.
1. Science, not a rule of thumb:
To increase organizational efficiency, the "rule of thumb" method must be replaced by methods developed through scientific work analysis.
Golden rule means the decisions made by the manager based on his personal judgment. Taylor says that even a small manufacturing activity, such as loading iron sheets into rail cars, can be scientifically planned. This will help save time and human energy. Decisions must be based on scientific research with cause-and-effect relationships.
The work assigned to any employee must be observed and analyzed with reference to each element or a part of it and therefore the time involved in it to make a decision the simplest way to perform that work and determine the standard performance for it.
2. Harmony, not discord:
Taylor emphasized that there must be complete harmony between the workers and the management since if there is any conflict between the two, it will not be beneficial to either the workers or the management.
Both management and workers must realize the importance of each. To achieve this level, Taylor proposed that an entire mental revolution on the a part of both management and workers.
He means that there must be a complete change in the attitude and perspective of workers and management towards each other. It should always be kept in mind that prosperity for an employer cannot exist for long unless it is accompanied by prosperity for the employees of that organization and vice versa.
It is possible to (a) share a part of the surplus with the workers (b) the training of the employees, (c) the division of labor (d) the team spirit (e) the positive attitude (f) the sense of the discipline (g) sincerity, etc.
The management must always be willing to share the profits of the company with the workers and the latter must give their full cooperation and hard work to achieve the organizational objectives. Group action with mutual trust and understanding must be perfect to understand the focus of work. This principle requires that there's an ideal understanding between management and workers which both feel a part of an equivalent family. It helps to produce a synergistic effect as both management and workers work in unison.
3. Mental revolution:
it involves a change in the behaviour of workers and management towards each other. Both must realize the importance of the other and work with full cooperation. Both management and workers should aim to increase the profits of the organization.
To do this, the workers must do their best to make the company profit and, on the other hand, the management should share part of the profits with the workers. Therefore, the mental revolution requires a complete change in the perspective of both the management and the workers. There should be a spirit of union between workers and management.
4. Cooperation, not individualism:
This principle is an extension of the "harmony, not discord" principle and emphasizes mutual cooperation between workers and management. Cooperation, mutual trust, and a sense of goodwill must prevail among both managers and workers. The main motive is to replace internal competition with cooperation.
Both "management" and "workers" must realize the importance of each other. Workers should be considered part of management and allowed to participate in management's decision-making process. Management should always accept their proposal and should also reward them if their suggestions prove beneficial to the organization, viz. cost reduction or production increase, etc.
At the same time, workers must also resist the strike or make unnecessary demands on management. Workers must be treated as an integral part of the organization and all-important decisions must be made after proper consultation with workers. Both must see themselves as two pillars whose strength alone can guarantee the achievement of the common objectives of the organization.
Taylor also suggested that there should be a proper division of labor and responsibility between the two. Management must always guide, encourage and assist workers.
5. Development of each and every one of the people towards their greater efficiency and prosperity:
The efficiency of any organization also largely depends on the skills and abilities of its employees. Therefore, it was considered essential to provide training to workers to learn the best method developed using the scientific approach. To achieve efficiency, steps must be taken from the employee selection process. Employees must be scientifically selected.
Scientific Management Elements and Tools
- Separation of planning and execution: Taylor emphasized the separation of planning aspects from the actual performance of the work. Planning should be left to the supervisor and workers should emphasize operational work.
- Functional foreman: the separation between planning and execution resulted in the development of a supervision system that might require planning work adequately in addition to maintaining the supervision of workers. Thus, Taylor developed the concept of functional foreman based on the specialization of functions.
Functional Foreman
- Job analysis: it is carried out to find out the best way to do things. The best way to do a job is the one that requires the least movement consequently less time and cost.
- Standardization: standardization should be maintained with respect to instruments and tools, work period, amount of work, work conditions, production cost, etc.
- Scientific selection and training of workers: Taylor has suggested that workers be selected on a scientific basis taking into account their education, work experience, skills, physical strength, and so on.
- Financial incentives: Financial incentives can motivate workers to do their best. Therefore, monetary (bonuses, compensation) and non-monetary (promotion, improvement) incentives must be provided to employees.
Neo-Classical Approaches
Neoclassical organization theory
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In general, most people identify neoclassical theory with the human relations movement in which Elton Mayo had pioneered. Mayo and his collaborators carried out the Hawthorne experiments that formed the basis for this theory. In this article, we will talk about the Neoclassical Theory of Organizations.
Introduction to neoclassical theory
Hawthorne's experiments revealed that an informal organization, as well as socio-psychological factors, exert a much greater influence on human behaviour than psychological variables.
Therefore, these findings focused on human beings and their behaviour in organizations.
Therefore, neoclassical theory is also called the behaviour theory of organizations or human relations approach.
The main propositions are the following:
- Generally speaking, an organization is a social system. Also, it has several interacting parts.
- There is an informal organization within each formal organization. More importantly, the two affect each other.
- Human beings are interdependent. Therefore, the organization can predict its
- Behaviour if you look at social and psychological factors.
- Motivation is a very complex process. Several socio-psychological factors work together to motivate people at work.
- Human beings don't always act rationally. In fact, the most irrational behaviour is when they seek rewards at work.
- Normally, the objectives of the organization conflict with the objectives of each individual. Therefore, it is important to reconcile these objectives.
- Another important aspect of running an organization is teamwork. However, organizations must work to achieve this.
Furthermore, neoclassical writers offered an organizational design as follows:
- Flat structure: the scalar chain is shorter. Therefore, communication and motivation are more effective.
- Decentralization: a decentralized structure allows initiative and autonomy at lower levels.
- Informal organization: a formal organization represents the official channels of interaction. However, it has many weaknesses. Therefore, an informal organization can fill these gaps and meet people's social and psychological needs.
Weaknesses of Neoclassical theories
While neoclassical theory improves on its predecessors, it has the following weaknesses:
- Neoclassical theory offers several structures. However, you cannot apply them to all situations. Furthermore, a single structure does not serve the purposes of all organizations.
- This theory lacks a unified approach. In simpler terms, it is just a modification of classical organizational theory.
- The Noe Classical theory is based on several assumptions that may not be true. To give you an example, the assumption that it is always possible to find a solution to a problem that satisfies everyone is not true.
Human Relations Approaches
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The human rationalists, which also denotes the neoclassicals, focused on the human aspect of business. These theorists emphasize that the organization is a social system and the human factor is the most vital element within it.
There are numerous basic principles of the Human Relations Approach listed below:
Decentralization: The concept of hierarchy employed by classical management theorists is replaced by the thought that individual workers and functional areas (i.e., departments) should have greater autonomy and decision-making power. This needs a greater emphasis on lateral communication so that coordination of efforts and resources can occur. This communication occurs through informal communication channels rather than formal and hierarchical ones.
Participatory Decision Making: Decision making is participatory in the sense that those who make day-to-day decisions include line workers who are not normally considered "management." The greater sovereignty granted to individual employees and the consequent reduction in the "height" and increased scope of control of the organizational structure requires that they have the knowledge and ability to make their own decisions and the communication skills to coordinate their efforts with others without close staff. supervisor.
Concern for the development of self-motivated employees: The importance of a decentralized and autonomous decision-making system by the members of the organization requires that these members be extremely "self-motivated." The goal of managers in an organization of this type is to design and implement organizational structures that reward that self-motivation and autonomy. Another is negotiating working relationships with subordinates that foster effective two-way communication.
Therefore, the human relations approach implies modifications in the structure of the organization itself, in the nature of the work and in the association between manager and assistant. Each of these changes depends on assumptions about the individual, the organization, and communication, like any other theory of organizations. Elton Mayo and others organized an experiment that came to be known as Hawthorne experiments and explored informal groupings, informal relationships, communication patterns, and internal leadership patterns. Elton Mayo is often popular as a parent at the School of Human Relations. Human relationships defend various factors after performing the Hawthorne experiments mentioned below:
- Social system: The organization in general is a social system that consists of numerous interacting parts. The social system established individual roles and establishes norms that may differ from those of the formal organization.
- Social environment: The social climate of work affects workers and is also affected.
- Informal organization: The informal organization also exists within the framework of the formal organization and affects and is affected by the formal organization.
- Group dynamics: In the workplace, workers often do not act or react as individuals but as members of a group.
- Informal Leader: There is an appearance of informal leadership as opposed to formal leadership and the informal leader sets and enforces group norms.
- Non-financial reward: money is an encouraging element, but not the only motivator of human behaviour. Men have various motivations and socio-psychological factors act as important motivators.
Behavioural Approach
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The behavioural approach to management evolved primarily because practicing managers found that adopting the ideas of the classical approach did not achieve full efficiency and harmony within the workplace. The behavioural approach to management showcased what classical advocates missed: the human aspect. Classical theorists viewed organization from a production perspective, advocates of behaviour viewed it from the individual's point of view. The behavioural approach to management shows cased independent behaviour and group processes and recognized the importance of behavioural processes at work.
Some of the main behavioural researchers who made significant contributions to the behavioural approach to management are: Mary Parker Follett, Douglas McGregor, Kurt Lewin, Chester Barnard, Abraham Maslow, George Romans, etc.
Branches of the behavioral approach to management
The behavioural approach has been divided into two branches: the human relations approach and therefore the behavioural science approach. within the human relations approach, managers must know why their subordinates behave the way they are doing and what psychological and social factors have an impression on them. Supporters of this approach strive to point out how the method and functions of management are influenced by differences in individual behaviour and therefore the influence of groups within the office.
Human relations approach
The term human relations mean the way that managers connect with their subordinates. Managers face many difficulties because staff members generally don't adhere to predetermined and balanced patterns of behaviour. Supporters of the human relations approach feel that management must recognize employees' need for social recognition and acceptance. Management should view the work group as a positive force which will be used productively. Therefore, managers must be proficient in human relations skills alongside technical skills. The initial stimulus for the movement came from Hawthorne's experiments:
1. Lighting experiments
2. Relay assembly testing room
3. Interview program
4. Bank wiring testing room
Behavioural Science Approach
The behavioural science approach is really an extension of the human relations approach. It valued the attitudes, behaviour, and performance of people and groups within organizations. Proponents of the behavioural science approach consider humans to be far more complex than the classical approach's description of economic man and social man's description of the human relations approach. This approach focuses on the character of the work and therefore the degree to which it'll satisfy the human got to demonstrate skills and knowledge.
To achieve better employee performance, communication, motivation, participatory management, leadership and social psychology are integrated into this approach. The behavioural approach recognizes the standard of leadership as a crucial element in managerial success. It focuses on the group relationship and recognizes a part of the individual mindset and group behaviour in organizational effectiveness. Abraham Maslow, Fredrick Herzberg, Douglas McGregor, Victor Vroom, James March, Herbert Simon, Chester Barnard, etc., made significant contributions to behavioural science. Getting closer.
Contributions of the behavioural approach
- Improved use of teams to realize organizational goals.
- Emphasis on staff training and development.
- Use of innovative rewards and incentives techniques.
- Furthermore, the most focus in modern management theory led to empowering employees through shared information.
Limitations of the behavioural approach to management
Challenges for managers in difficult situations and therefore the reality that human behaviour is complex. This complicated the matter for managers trying to use insights from the behavioural sciences that changed regularly when different behavioural scientists offered different alternatives.
Systems Approach
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The systems approach is concerned with thoroughly understanding the organization as an open system that converts inputs into outputs. The systems approach had a major impact on management thinking in the 1960s. During this period, thinking about management practices allowed managers to relate different specialties and parts of the business to each other, as well as to external environmental factors. The system approach focuses on the organization as a whole, its communication with the environment and its need to achieve balance.
In short, there are important management theories, and each theory plays a different role in understanding what managers do. Management is a global, interdisciplinary field that has developed in parts over the years. Numerous approaches to management theory were developed including the universal process approach, the operational approach, the behavioral approach, the systems approach, the contingency approach, and others. F W Taylor, Adam Smith, Henry Fayol, Elton Mayo and others have contributed to the development of the management concept. The classical management approach had three main categories including scientific management, administrative theory, and bureaucratic management. The scientific direction highlighted the scientific study of working methods to improve the efficiency of workers. Bureaucratic management deals with the characteristics of a perfect organization that operates on a rational basis. Management theory explored the principles that managers could use to synchronize the internal activities of organizations. The behavioral approach arose primarily as a result of Hawthorne's studies. Mary Parker Follet, Elton Mayo and their associates, Abraham Maslow, Douglas McGregor and Chris Argyris were the main protagonists of this school.
Contingency Approach
This approach to management thinking focuses on management principles and concepts that do not have general and universal application under all conditions. Joan Woodward in the 1950s has helped develop this approach to management. The contingency school asserts that management is situational and the study of management recognizes the important variables in the situation. It is distinguished that all the subsystems of the environment are interconnected and interrelated. By studying their interrelationship, management can find a solution to a specific situation. Theorists claimed that there is no effective way of doing things in all business conditions. Methods and techniques that are extremely effective in one situation may not give the same results in another situation. This approach proposes that the role of managers is to recognize the best technique in a particular situation to achieve business objectives.
Managers must develop an understanding of the situation and practical selectivity. Contingency visions are applicable in the development of the organizational structure, in the decision of the degree of decentralization, in the motivation and leadership approach, in the establishment of communication and control systems, in conflict management and in the development and employee training. The contingency approach is associated with the application of management principles and processes as dictated by the unique characteristics of each situation. It depends on various situational factors, like the external environment, technology, organizational characteristics, manager characteristics, and subordinate characteristics.
Concepts of MBO
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Management by objectives (MBO)
Management by objectives (MBO) could even be a management model that aims to strengthen the performance of a corporation by clearly defining the objectives agreed by both management and employees. According to the theory, having a voice in goal setting and action plans should ensure better participation and engagement among employees, as well as alignment of goals across the organization.
Management by objectives (MBO) is additionally referred to as management by results (MBR).
The origins of management by objectives (MBO)
The thought of (MBO) was first sketched by Peter Drucker and after that arise by his student George Odiorne, was popular within the 1960s and 1970s. In his book "The Practice of Management", printed in 1954, Drucker defined variety of preferences or importance for the manager of the longer term. With the advantage of hindsight, it's going to seem obvious that managers must have a place to go before embarking on a journey. They get so indulged in their present activities that they forget their main purpose. In some cases, it may be that they focus on this activity as a means of avoiding the uncomfortable truth about the condition of their organization. MBO received a lift when it declared itself an integral a part of “The HP Way,” the widely acclaimed management sort of Hewlett-Packard, a computer company. At every level at Hewlett-Packard, managers had to develop goals and integrate them with those of other managers and the company as a whole. This was done by drawing up written plans that showed what people needed to accomplish if they wanted to achieve those goals. The plans were then shared with others within the corporation and coordinated.
Key management by objectives (MBO) concepts
The core concept of MBO is planning, which suggests that a corporation and its members aren't simply reacting to events and problems, but are proactive. MBO requires employees to line measurable personal goals supported organizational goals. For example, a goal for a engineer could also be to finish the infrastructure of a housing division within subsequent twelve months. Goals are set in writing annually and are continually monitored by managers to verify progress. The rewards are based on the achievement of goals.
MBO Features
A discussion of various MBO definitions highlights the following characteristics:
1. MBO is not merely a technique, but a management philosophy. A technique is applicable only in specific areas, but a philosophy or approach guides and influences all aspects of management. MBO is an approach that includes several techniques for better management.
2. In this approach, superiors and subordinates collectively decide various goals of the organization and individuals. These objectives become the goals to be achieved by various people in the organization. Goal review is also done collectively.
3. Corporate, departmental, and individual objectives are used as a benchmark for measuring performance. A comparison of objectives and actual results will allow managers to judge the performance of subordinates and the higher level will similarly evaluate the performance of managers.
4. MBO provides a periodic performance review. This review is normally done once a year. It emphasizes initiative and the active role of the manager who is responsible for achieving the objectives. The review is forward-looking and provides a basis for planning and corrective actions.
5. MBO objectives provide guidelines for the proper system and procedures. The degree of delegation of authority, determination of responsibility, allocation of resources, etc. It can be decided based on the goals of several people. These goals also become a basis for reward and punishment in the organization.
Need for management by objectives (MBO)
- The Management by Objectives process assist the members to understand their duties in the workplace.
- KRAs are designed for each employee based on her interest, specialization, and educational qualification.
- members of work force are crystal clear about what is expected of them.
- The management by objectives process leads to satisfied employees. Avoid job mismatch and unnecessary confusion later on.
- members in their own way participate in order to the achieve the goals and objectives of the organization. Each employee has her own role in the workplace. They tend to stay in the organization for a longer period of time and contribute effectively. They enjoy the workplace and don't treat work as a burden.
- Management by objectives ensures effective communication between employees. It leads to a positive environment in the workplace.
- Management by objectives leads to well-defined hierarchies in the workplace. Ensures transparency at all levels. A supervisor from any organization would never interact directly with the Managing Director in case of inquiries. First, she would meet with her chief reporting officer, who would then pass the message on to his superior and so on. Everyone is clear about their position in the organization.
- The MBO process leads to highly motivated and engaged employees.
- The MBO process establishes a benchmark for each employee. The superiors establish objectives for each of the team members. Each employee receives a list of specific tasks.
Limitations of management by objectives (MBO)
Management by objectives has the following limitations:
- It involves setting individual goals and responsibilities. But all work in an organization is a group effort in which the activities are so closely interrelated that no individual can be blamed or rewarded for any end result.
- It is difficult to make comparative evaluations of individuals because the objectives of each individual are different from those of others in terms of complexity, etc.
- It is difficult to assess and identify the potential. MBO is only concerned with current job performance.
- The method is time consuming.
- MBO assumes a certain level of trust throughout the hierarchy. But organizational life teaches people to be cautious. This inhibits honest dialogue and proper goal setting.
- MBO is not much suitable to routine worker-level jobs, such as an assembly line. In these types of situations, the more traditional performance appraisal tends to be used. The technique is especially suitable for managerial, professional and sales personnel and for those who work independently.
Advantages of management by objectives (MBO)
- MBO forces managers not only to plan activities, but to plan for results. Managers define objectives while formulating plans. Once the objectives are clearly established, they act as incentives and standards for control purposes.
- MBO allows managers to focus on really important and profit-impacting tasks rather than tasks that might have little impact on overall results.
- MBO establishes clear organizational goals and structures. Identify the key result areas and hold the people in charge of achieving the objectives.
- Employees commit to perform the work assigned to them as agreed and expected. They clearly know their goals and they also know how to move towards their achievements. Therefore, they do not need to wait for instructions, directions or guidance from their superiors.
- Helps develop effective control. Control involves setting your own standards, evaluating performance and taking the necessary corrective measures if there is any deviation.
- Helps management formulate better management training programs based on performance evaluations.
- People become willing and enthusiastic masters of their own destiny.
Management by objectives (MBO): potential for misuse
MBO can easily be misused and often is. What is supposed to be a system that enables dialogue and growth between the boss and the subordinate with a view to achieving results, often degenerates into a system in which the boss puts constant pressure on the subordinate to produce results and You forget to use MBO for commitment, desire. contribute, and managerial development. Sometimes even well-meaning managers misuse MBO because they don't have the interpersonal skills or knowledge of human needs to prevent their assessment sessions from turning into critical and chewing periods. Finally, many managers tend to view MBO as a total system that, once installed, can handle all management problems. This has led to forcing problems on the MBO system that it is not equipped to handle and that thwart the good effects it may have on the problems it is designed for.
References:
1. Business Management by Neerli Vashisth
2. Principles of Management by L.M Prasad
