undefined | unit 1 introduction

EOM

UNIT- 1

INTRODUCTION

Q1) Define Management.

A1) Management is defined as an act of managing people and their work with the aim of achieving a common goal by using the organization’s resources. It is the joint efforts of a group of people who use their skills and knowledge in running the complete system of the organization. It is a function, a process, a discipline, an art and much more.

“Management is an art of getting things done through others.” Management is to plan, organize, direct and control the resources of the organization for accomplishment of common objectives or goals. It involves proper utilization of resources like material, money, machinery, methods, manufacturing and marketing. The knowledge of management theory and practice enables managers to take more practical view about organizational and social problems and to find out their effective solution.

According to Taylor, “Management is the art of knowing what you want to do and then seeing that it is done in the best and cheapest way.”

According to Lawrence, “Management is the accomplishment of results through the efforts of other people.”

According to Henry Fayol, “To manage is to forecast and to plan, to organize, to co-ordinate and to control.”

Thus, it may be concluded that management plays a vital role in improving the standard of living of the people in the society by developing an ideal organizational structure and making economic use of available resources.

Q2) State the nature of management.

A2) Management has the following nature:

1. Management is goal oriented- Management is concerned with achieving specific goals and objectives. The success of management is measured by the extent to which the goals and objectives are achieved.

2. Management is associated with group efforts- The business comes into existence with certain objectives which are to be achieved by a group as a whole. Management involves getting things done by, with and through the efforts of group members. It coordinates the activities and acts of its members towards a common goal.

3. Management is intangible- It is an unseen force. Its presence is evident from the result of its efforts.

4. Management involves decision making- Decision-making is an important part of modern management. Rational or sound decision making is considered as a primary function of management.

5. Management is an art as well a science: Management has the features of art and also science. Like an art, it requires skills and knowledge in order to be able to manage an organization. Also, like a science, management requires specialized knowledge, principles and practice for being successful in its endeavors. It is however not pure science like physics and chemistry.

6. Management is getting things done through others- A manager plans activities and goals of the organization and gets them done through subordinates.

7. Universal Process: Management is applicable in all organizations. Without effective management, the goals of the organisation cannot be achieved.

8. Profession: Management is a profession as managers require specialized skills and knowledge and formal training methods in order to be appointed as a manager in an organization.

9. Process: The management method incorporates a range of activities or services directed towards specific goals.

Q3) What are the objectives of management?

A3) Management brings together the 5 Ms viz. Men, Material, Machines, Methods and Money. It is a result oriented activity which focuses on achieving the desired output. The main objectives of management are discussed below:

1. Optimum utilization of resources- The most important objective of management is to use various resources of the enterprise in the most economic way so as to avoid wastages. The proper use of men, materials, machines, and money helps a business to earn sufficient profits and to satisfy various stakeholders.

2. Growth and development of business- By proper planning, organisation and direction etc., management leads a business to growth and development. It helps the business in expanding profitably. It provides a sense of security to the employers and employees.

3. Better quality goods- The aim of sound management is to produce better quality products at minimum cost.

4. Ensuring regular supply of goods- Another objective of management is to ensure regular supply of goods to consumers. It checks the artificial scarcity of goods in the market, thus keeping the prices of goods within permissible limits.

5. Promotion of research and development- Management undertakes research and development activities to take lead over its competitors and meet uncertainties. Thus, it provides the benefits of latest research and technology to the society.

6. Minimize risk- Though the exact future cannot be predicted, yet on the basis of previous experience and existing circumstances, management tries to prepare the organization for future contingencies, thus minimizing the element of risk.

Q4) Discuss the significance of management.

A4) Management plays a vital role in an organization. Its significance may be studied as under:

Achieving Group Goals: Management helps in the collaboration and coordination of individual efforts so as to accomplish individual targets together with the group goals.

Increases Efficiency: Management improves productivity by managing resources in a reliable conceivable way in order to decrease cost upscale potency.

Smooth operation of business: Management ensures smooth operation of business through sound planning, organization, direction and effective control.

Adjustment with change: Management ensures adaptation of the organization and its working in all changing situations.

Achieving personal objectives: Management promotes leadership and provides motivation to employees to operate effectively in order to accomplish their personal aims while working together towards the organizational goals.

Development of Society: Management helps in the enhancement of community by manufacturing reliable and quality goods, establishing employment opportunities and developing innovative technologies.

Q5) Explain the management process.

OR Explain the functions of management.

A5) Management is described as a social process. It is a dynamic process consisting of various elements and activities. These activities are common to every manager irrespective of his level or status.

Different experts have classified functions of management. According to George & Jerry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, and to control”. Whereas 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, R for Reporting and B for Budgeting. But the most widely accepted are functions of management given by Koontz and O’Donnel iwhich are Planning, Organizing, Staffing, Directing and Controlling.

For theoretical purposes, it may be convenient to separate the functions of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other, affecting the performance of the rest. Let us discuss the functions of management in brief.

1. Planning

Planning is the basic function of management. Planning involves determining future courses of action to achieve desired goals. 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 and where we want to be”. A plan is a future course of action. Thus, planning is a systematic thinking about different ways and means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive. It is an intellectual activity. It helps in avoiding confusion, uncertainties and doubts, risks, wastages etc.

2. Organizing

Organizing is the process of defining and grouping of activities of the entire process and establishing the authority and responsibility relationship among them. It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of goals. According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnels”. Thus, organization involves determining and providing 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.

3. Staffing

According to Kootz & O’Donell, staffing is filling and keeping filled, positions in the organization structure through defining work-force requirements, appraising, selecting, compensation and training.” Staffing has assumed greater importance in the recent years due to advancement of technology, increased size of business, complexity of human behavior etc. The main purpose of staffing is to put the right man on the right job, i.e. square pegs in square holes and round pegs in round holes. Staffing involves:

• Manpower Planning

• Recruitment, Selection and Placement.

• Training and Development.

• Remuneration.

• Performance Appraisal.

• Promotions and Transfer.

4. Directing

Direction is called management in action. Planning, organizing and staffing are mere preparations for doing the work while direction actually initiates the work. Direction is that aspect of management which deals directly with influencing, guiding, supervising and motivating subordinates for the achievement of organizational goals. Direction has the following elements:

• Supervision

• Motivation

• Leadership

• Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching and directing work and workers.

Motivation- means inspiring, stimulating or encouraging subordinates to perform with zeal. Positive, negative, monetary, non-monetary incentives may be used for this purpose.

Leadership- may be defined as a process by which managers guide and influence the work of subordinates in desired direction.

Communication- is the exchange of information, experience, opinion etc. from one person to another. It is a bridge of understanding between people.

5. 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 conformity with the standards set. An efficient system of control helps in predicting deviations before they actually occur. According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”. Therefore controlling has following steps:

i. Establishment of standards of performance.

ii. Measurement of actual performance.

iii. Comparison of actual performance with the standards and finding out deviation, if any.

iv. Taking corrective action.

Q6) Discuss the scope of management.

A6) Management has wide scope. All organizations need management for its different functions, namely,

Planning

Organizing

Staffing

Directing

Control

There are several functional areas of management which are to be looked after during any business operation. Some of the most important functional areas are briefly discussed as under:

1. Production Management:

As far as manufacturing organization is concerned, production is a core function. The entire production activities are to be planned, organized, directed, coordinated and controlled. The production activities involve the following:

i. Product designing.

ii. Acquisition of materials.

iii. Storage of materials.

iv. Planning and controlling of factory operations.

v. Repairs and maintenance.

vi. Inventory and quality control.

vii. Research and development.

2. Marketing Management:

Marketing is the total system of planning, pricing, promoting and distributing products and services to the satisfaction of current and potential customers. Marketing is concerned with all those activities which enable the seller to transfer the title to the buyer. The various marketing activities are:

i. Product Planning:

It is concerned with the following-

a. Deciding on the products to be manufactured.

b. New product development.

c. Product alternation.

d. Product diversification.

e. Product elimination.

f. Branding.

g. Packaging.

h. Handling various phases in product life cycle.

ii. Pricing:

Price determination is yet another task of the marketer. Pricing is governed by a number of objectives like target, return on investment, maximizing market share, meeting competition, preventing competition, etc. There are different methods of pricing the product. Marketing management has to decide the right pricing method in the light of factors influencing pricing decisions.

iii. Physical Distribution:

it includes choice of channels of distribution, storage, identification of source of supply, transportation, location of warehouse decisions, movement of goods within the facility, etc.

iv. Promotion:

Marketer has to decide on the promotional measures which would stimulate demand for the products and to enhance the volume of sales. A number of tools used for promotion include advertising, personal selling, sales promotion and public relations.

3. Financial Management:

The main focus of financial management is to manage financial resources of the organization. Finance is the life blood of an organization and is needed for carrying on business, achieving growth and development, and protecting its identity in the changing environment. It comprises the following:

i. Estimation of funds required for the survival and growth of the business.

ii. Calculation of cost of capital.

iii. Mobilization of funds.

iv. Determining capital structure.

v. Determining the level of leverage.

vi. Managing current assets.

vii. Dividend decisions.

viii. Selection of appropriate sources of funds.

ix. Ensuring proper utilization and allocation of raised funds.

4. Human Resource Management:

This involves planning, organizing and controlling the procurement, development, compensation and maintenance of human resources in an enterprise. It includes the following activities:

i. Manpower planning.

ii. Recruitment and selection.

iii. Job analysis.

iv. Training and development.

v. Performance appraisal.

vi. Compensation and promotion.

vii. Employee welfare.

viii. Maintenance of personnel record.

5. Office Management:

Office management is the central point of the business management. In fact, all the activities, performance, directions and policy implementation are directed and controlled over this focal point. It manages and maintains all the records and accounts relevant to different sections and departments of the organization

6. Sales Management:

Sales management includes the recruitment and selection of sales employees, their training, supervising their work and the evaluation of execution of work. Sales management is also an important part of business. It aims to formulate sales plans, policies and programmes and to determine simple and effective sales procedures. It also manages and develops sales promotion and advertising tasks etc.

7. Communication Management:

According to Newman and summer – ‘Communication is an exchange of facts, ideas, opinions or emotions from one person to another.’ The communication management organizes a mutual process to make more reliable and integrated relations.

8. Environmental Management:

It analyses and evaluates different roles of environmental factors and their effects on the working and performance of the business. It develops and manages various measures and devices to make better environmental situation.

9. Quality Management:

Basically the concept of total quality is the notion that is essential in all the functions of business and its allied activities. It aims to manage specialization, raise productivity, better performance, create reliability in product and services, optimum utilization of resources and raise the level of customer- satisfaction etc.

10. Research and Development Management:

With the emerging issues like innovations, changed environment, technological upgradation, professionalization, social values, service patterns and new behavioural approaches, there is a need to manage the research investigation and organise the developmental activities.

11. Purchase Function:

Traditionally, purchasing is considered a part of the production function. But in big organisations, there may be a separate department to perform some complicated purchase activities such as inviting tenders, choosing the sources of supply, making transport arrangements and import of raw materials and machines and equipment.

12. Legal Function:

In big organizations, a legal department may be organized to ensure rules and regulations and also to give advice to the management in case of disputes with the customers, suppliers and even government over various commercial matters.

Q7) Write a note on the evolution of management thought.

Or, Write a note on the different approaches of management.

A7) Management is probably a concept as old as the human civilization. Management has been growing with the development of social, economic, political and scientific institutions. The Industrial Revolution gave rise to the necessity of developing a theory of management. For the purpose of study, the management thought is divided into three stages, each covering different period and ideology of the contributors. These stages are discussed in brief below:

1. The Classical Theory/Approach of Management

i. Bureaucratic Model of Max Webber, introduced around 1900.

ii. Scientific Management of F. W. Taylor, forwarded around 1910.

iii. Process Management advocated by Henry Fayol around 1910.

2. The Neo- Classical Theory/Approach

i. Human Relations Movement propagated by Elton Mayo and Roethlisberger, around 1930.

ii. Behavioral Sciences Movement introduced by A. Maslow, McGregor around 1940.

3. The Modern Management Theories/Approaches

i. Quantitative Approach developed by Taylor around 1950.

ii. Systems Approach developed after 1950 by Boulding, Johnson and others.

iii. Contingency Approach developed by Lorsch, Lawrence and others.

The Classical Theory/Approach of Management

The earlier records of the Egyptians, Greeks and Romans show the use of management in one form or the other. The formal organizational system used in Roman Catholic Church is a unique example of using managerial techniques. The military organizations have also been using management tools to improve the moral of troops and using communication channels for messages. However, it was only in the second half of the 18th century that James Watt Jr., Boulton, Robert Owen and Charles Babbage gave serious thought to problems of management. Inspite of contributions of many, it is only when Max Webber introduced Bureaucratic Model around 1900 that first systematic management theory is said to have emerged.

Then came scientific management, which adopted scientific and systematic approach to managerial problems.

i. The Bureaucratic Model

Max Webber, a German Sociologist, was the Chief exponent of the Bureaucratic Model. According to him, the recognition and exercise of authority is the fundamental question. Webber answered this question by separating three types of authority structures i.e. charismatic, traditional and bureaucratic. A charismatic leader’s authority is accepted by virtue of some exceptional innate qualities. The charisma remains with the leader and it is not necessary that the successor too has charisma. More often, the authority structure will thus become one, based on heredity or procedure and rules. Such an organization will become a ‘traditional or rational legal’ organization. When a charismatic leader dies and his son replaces him, the authority becomes part of leader’s role, not part of his personality. Bureaucratic organization is the most efficient form of organization in Webber’s views. He names it rational-legal; rational because specific objectives of the organization are laid down and organization is designed to achieve them and it is legal because authority stemmed from a clearly defined set of rules, procedures and roles.

ii. Scientific Management

F.W. Taylor investigated the effective use of human resources in the industrial organization, particularly at the shop level. He tried to find out the reasons for slow pace of work and suggested methods for improving it. Taylor, who is called the Father of Scientific Management, provided for a scientific basis for designing and performing various jobs.

F. W. Taylor’s scientific management:

F. W. Taylor is known as the Father of Scientific Management. Fredrick Winslow Taylor was an American, he worked for American steel. He was an engineer by profession and most of his work was concerned with experiments to find the best method of doing jobs.

According to F. W. Taylor, “Scientific Management is an art of knowing exactly what is to be done and the best way of doing it.”

Taylor advocated the ideas of scientific management by publishing in 1911 his famous book entitled “The principles of scientific management.” According to Taylor, management problems should be solved by experiments and scientific techniques rather than thumb rules or trial and error methods. Taylor’s principles were based on the following four areas:

Each worker should have a clearly defined daily task.

Certain standards must be determined to ensure that the task is easily accomplished

Proper persons should be selected and trained for the jobs.

The work should be done efficiently.

Principles of Scientific Management:

1. Replacement of Rule of Thumb: According to this principle the manager should use scientific methods to determine every activity by the employee in the organization. For this he should consider the following points.

To calculate the time required for each job by observing the employee.

To determine how much work an employee can perform in a day.

To find out the best way to do a particular job.

Instead of using trial and error method for determining the job use systematic way such as data collection, analysis of data and then drawing conclusions.

2. Scientific Selection, Training & Development of Worker: According to Taylor selection of employees is an important task before the manager. The Selection procedure should be perfect and systematic. For this purpose the following points should be considered.

The procedures of selection should be scientific. It means the selection should not be based on the judgment of a single person.

The physical, mental, technical or other qualities required for the job should be clearly defined. This makes the selection easier.

These Employees should be selected on the basis of tests and interview.

The employees should be trained from time to time. Training makes employees capable to survive in the job.

The manger should provide opportunities for development of worker having better capabilities.

The manger should develop each employee in such a way the that employee shows maximum

3. Co-operation between Management and Employees: To achieve the objectives or goals there should be proper co-operations between the employees and management. The relations between them should be harmonious. Following points should be noted in this regard:

In the organization the emphasis should be given to co-operative between the management and workers and not to individuals.

The goals can be achieved effectively only by co-operation.

The interest of the management and the workers should be one and the same. They should harmonies.

4. Division of Responsibility: While dividing the work there should be the division of responsibilities between the managers and the employees. This can be done by the following ways:

The nature and role played by different levels of managers and employees should be determined properly.

The managers should be given the responsibility of planning whereas the workers or employees should concentrate on the execution.

This principle helps the employees to perform their best.

5. Mental Revolution: This principle focuses on the complete change in the attitude of the management and employees as regards their relations are concerned. For this change the following points should be taken in to account.

The managers should create a suitable working condition for the employees.

All the problems should be solved scientifically.

The employees should perform their jobs carefully and with devotion.

The employees should use the resources carefully. They should not waste the resources.

On the other hand management should provide fair remuneration to the employees and boost up their morale.

6. Maximum prosperity for Employer and Employees: This aim of scientific management is to give maximum prosperity to the employer and employee. However it is possible with the help of following points.

Each employee should be given proper opportunity to attain this highest efficiency.

The employees should give maximum output.

There should be optimum utilization of resources.

iii. Process Management

Henry Fayol, known as the Father of Process Management, wrote a book on General and Industrial Management in 1916 which is considered to be one of the best classics in management. His contributions may be classified under three categories: Classification of business activities, Functions of management and Principles of Management.

Classification of Business Activities

Henry Fayol observed that management was an activity common to all business undertakings. He divided all activities of a business enterprise into six categories:

Technical activities (production)

Commercial activities (buying, selling and exchange)

Financial activities (search for and optimum use of capital).

Security activities (protection of property and persons).

Accounting activities (including statistics).

Managerial.

Functions of Management

Fayol divided the key functions of management into five sub-categories:

Planning

Organizing

Co-ordinating

Commanding

Controlling.

Fayol observed that these functions or elements applied not only to business enterprises but also to political, religious, philanthropic or other undertakings.

General Principles of Management

Fayol suggested 14 principles of management that are universally accepted guidelines for managers to perform their job according to their responsibility. These management principles are explained below:

1. Division of Work - According to this principle, the whole work is divided into small tasks. Work is divided and assigned to employees as per their specialized knowledge in a particular field. This increases productivity and the efficiency of labor.

2. Authority and Responsibility - According to Henri Fayol, there should be a balance between Authority and Responsibility. Authority means the right of a superior to give orders to subordinates, while responsibility is the obligation for performance. Authority and responsibility must always go together, as a pair. If the authority is more than responsibility then chances are that a manager may misuse it. If responsibility is more than authority, he may feel frustrated.

3. Discipline - It is obedience, proper conduct and respect of authority. It is essential for the smooth functioning of all organizations. Discipline may be Self-discipline or it may be Enforced discipline. To establish discipline, good supervision and impartial judgment are needed.

4. Unity of Command - This principle states that each subordinate should receive orders and be accountable to only one boss. If an employee receives orders from more than one superior, it is likely to create confusion and conflict in the organization.

5. Unity of Direction - All related activities should be put under one group. There should be one plan of action for similar activities, and they should be under the control of one manager.

6. Subordination of Individual Interests to the General Interest- The interest of one individual or one group should not prevail over the general good. The individual interest should be given less importance, while the general interest should be given the most importance. If not, the organization will collapse.

7. Remuneration- Remuneration is the price for services received. Pay should be fair to both the employee and the firm. If an organization wants efficient employees and best performance, then it should have a good remuneration policy, giving maximum satisfaction to both employers and employees. It should include both financial and non-financial incentives. It should be based on a systematic attempt to reward good performance.

8. Centralization- In centralization, authority is concentrated in the hands of a few. However, in decentralization, the authority is distributed to all the levels of management. There should be a balance between centralization and decentralization. If there is complete centralization, then the subordinates will have no authority (power) to carry out their responsibility (duties). Similarly, if there is complete decentralization, then the superior will have no authority to control the organization. The degree to which centralization or decentralization should be adopted depends on the specific organization.

9. Scalar Chain- The chain of command or the scalar chain is the formal line of authority, communication, and responsibility within an organization. It is the line of authority from top to bottom of the organization. This chain implements the unity-of-command principle and allows the orderly flow of information from superiors to subordinates. Clear-cut chain of command ensures effective decision-making process and greater efficiency.

10. Order- There should be an order for all material/things and people in the organization. Order for things is called Material Order and order for people is called ‘Social Order’. Material Order refers to “a place for everything and everything in its place.” Social Order refers to the selection of the “right man in the right place”. Human and material resources must be in the right place at the right time, misplacement of which will lead to misuse and disorder in the organization.

11. Equity- The equity principle suggests that the managers/employers must be kind and equally fair to all subordinates/employees. Equity is a combination of kindness and justice. It creates a feeling of loyalty and devotion in the employees towards the organization.

12. Stability of Tenure of Personnel- Although it could take a lot of time, employees need to be given enough time to settle in their jobs. An employee needs time to learn his job and to become efficient. The employees should have job security because instability leads to inefficiency.

13. Initiative- Managers should encourage employees to make and execute their own plans. This is because an initiative gives satisfaction to the employees and brings success to the organization. It allows subordinates to chalk out a plan and do what it takes to make it work.

14. Esprit De Corps- Esprit de Corps means “Team Spirit”. Management should create unity, co-operation, and team-spirit among the employees. It is a great source of strength in the organization.

These principles are guidelines for every management function. The manager must refer and apply these 14 principles of management in order to reach the desired goals.

2. The Neo- Classical Theory/Approach

Neo-classical Theory deals with the human factor. Elton Mayo pioneered the human relations to improve levels of productivity and satisfaction. This approach was first highlighted by the improvements known as the ‘Hawthorne Experiments’ conducted at Illionois plant of Western Electric Company between 1927 and 1932. Elton Mayo and Mary Parker Follet are the main contributors of Human Relations Approach. Neo-classical approach also causes ‘Behavioral Science Management’ which is a further refinement of human relations approach.

Chester I. Bernard’s Contributions to Management

Chester Bernard was the president of new Jerray Bell Telephone Company. He served in various other organizations too. His important writings include: The Functions of Executive (1938), Organization and Management (1948) and Elementary Conditions of Business Morals.

His writings had important impact on human organization. In his organization theory, he adopted a sociological approach and in dealing with the functions of executives, he emphasized the importance of leadership and communication. Bernard divided organization into formal and informal. He said that informal organization is an important part of formal organization.

Bernard’s contribution towards the development of management may be described as follows:

1. Theory of Formal Organization: Barnard gave a theory of formal organization.

He defined it as “a system of consciously coordinated activities offered of two or more persons.” According to him organization consisted of human beings whose activities were coordinated and therefore becomes a system:

According to Barnard initial existence of organisation depends upon three elements:

(i) The willingness of persons to contribute efforts to the co-operative system

(ii) There should be an objective of co-operation

(iii) Proper communication system is necessary.

2. Organisational Equilibrium: Barnard suggested an equilibrium model to describe the balance achieved between the contributions of the members of an organisation and return contribution made by the organisation to the fulfillment of private goals of the members. Barnard treated organisation as separate from the environment where it works.

The persons working in the organisation have two roles—a personal role and an organisational role. There should be balance between what employees get out of the organisation (money, status, recognition, etc.) and what they contribute in form of time, knowledge, discomfort, production, etc.

3. Acceptance Theory of Authority: Barnard did not agree with the classical concept of authority where it comes from top to bottom. He said that authority comes from bottom. In his opinion authority is confirmed only when it is accepted by a person to whom it has been addressed. Disobedience of such a communication is a denial of authority.

According to Barnard the decision as to whether an order has authority or not lies with the person to whom it is addressed, and does not resides in persons of authority or those who issue these orders. Thus, in Barnard’s view, if a subordinate does not accept his manager’s authority, it does not exist.

A person will accept authority under following conditions:

(a) He can and does understand the communication;

(b) At the time of his decision he believes that it is not inconsistent with the purpose of the organisation;

(d) He is able (mentally and physically) to comply with it.

4. Functions of the Executive: Barnard postulated three types of functions for the executives in formal organisation set up.

These functions are:

(a) Maintaining proper communication in the organisation

(b) Obtaining essential services from individuals for achieving organisational goals

5. Informal Organisation: Barnard was of the opinion that both formal and informal organisations coexist in every enterprise. Informal organisation refers to those social interactions which do not have consciously co-ordinated joint purpose. This organisation helps to overcome the problems of formal organisation. Barnard suggested that execrates should encourage the development of informal organisation to bring cohesiveness in the organisation and also to serve as a means of communication.

3. The Modern Management Theories/Approaches

The modern management theories involve three streams:

i. Quantitative or Mathematical Approach

According to the mathematical theorists, if managing or organizing or planning or decision-making is a logical process, it can be expressed in mathematical symbols and relationships. The development of technology and the introduction of computers have brought mathematics and management closer to each other.

ii. Systems Approach

The systems approach looks upon management as a ‘system’ of an ‘organized whole’ made up of sub-systems integrated into a unity or orderly totality. The attention must be given to the overall effectiveness of the system rather than the effectiveness of any one sub-system in isolation. In systems approach, the whole organization is viewed as a system.

iii. Contingency or Situational Approach

According to J.W. Lorsch and P.R. Lawrence, management problems are different under different situations and need to be tackled as per the demand of the situation. One best way of doing may be useful for repetitive things but not for managerial problems. The contingency approach emphasizes the fact that what managers do in practice depends upon a given set of circumstances (a contingency & situation). According to this approach, managers should develop variable methods, tools or action plans as per the specific situation or contingencies as they develop.

Q8) What is Scientific Management? Discuss the principles of scientific management.

A8) F. W. Taylor is known as the Father of Scientific Management. Fredrick Winslow Taylor was an American, he worked for American steel. He was an engineer by profession and most of his work was concerned with experiments to find the best method of doing jobs.