Unit 1

Introduction

Q1)Explain the Concept of management

A1)The management is a particular kind of movement fundamentally dependable to complete things through others. All administrative capacities are general and all chiefs in any field of human endeavors play out that common place administrative capacities independent of what they are overseeing. One approach to dissect the management is to think as far as what a supervisor does. Utilizing this methodology, we can show up at the management cycle which depicts crafted by any director. A portion of the basic meaning of the management given by popular essayists and masterminds are: According to Harold Koontz and Heinz Weihrich, Management is the way toward planning and keeping up a climate in which people, cooperating in gatherings, proficiently achieve chosen points. As indicated by Kreitner, "The board is the way toward working with and through others to accomplish authoritative goals by proficiently utilizing restricted assets in the evolving climate.

Management can be defined as the process of administering and controlling the affairs of the organization, irrespective of its nature, type, structure and size. It is an act of creating and maintaining such a business environment wherein the members of the organization can work together, and achieve business objectives efficiently and effectively.

Management acts as a guide to a group of people working in the organization and coordinating their efforts, towards the attainment of the common objective.

In other words, it is concerned with optimally using 5M’s, i.e. men, machine, material, money and methods and, this is possible only when there proper direction, coordination  and integration of the processes and activities, to achieve the desired results.

Q2) What are the functions of management?

A2) Functions of Management 

1. Planning: It is the first and foremost function of management, i.e. to decide beforehand what is to be done in future. It encompasses formulating policies, establishing targets, scheduling actions and so forth.
2. Organizing: Once the plans are formulated, the next step is to organise the activities and resources, as in identifying the tasks, classifying them, assigning duties to subordinates and allocating the resources.
3. Staffing: It involves hiring personnel for carrying out various activities of the organization. It is to ensure that the right person is appointed to the right job.
4. Directing: It is the task of the manager to guide, supervise, lead and motivate the subordinates, to ensure that they work in the right direction, so far as the objectives of the organization are concerned.
5. Controlling: The controlling function of management involves a number of steps to be taken to make sure that the performance of the employees is as per the plans. It involves establishing performance standards and comparing them with the actual performance. In case of any variations, necessary steps are to be taken for its correction.

Q3) Explain Coordination is the Essence of Managership

A3)Coordination Is The Essence Of Management

Coordination is the orderly synchronization of the efforts by unifying, integrating and harmonizing the activities of the subordinates for the achievement of the goals of the organization. Every business enterprise is divided into a number of departments and every department has a number of groups and individuals. Coordination is not a separate function of the management, it is the force that binds all the other functions of management.

The managers at all levels are concerned with achieving coordination while performing the functions of planning, organizing, staffing, directing and controlling. Coordination is implicit and inherent in all functions of management.

• Coordination is required in Planning – systematic planning of work and allied aspects from top to bottom of the organization. Example. Coordination between production department plans and sales department targets.
• Coordination is required in Organizing – for the systematic division of work among individuals and departments. Assigning authority, responsibility, and accountability. Example: If the finance manager is given authority to raise funds, he/she should also be given the responsibility to manage funds efficiently.
• Coordination is required in staffing – for placement of right persons on the right jobs. Example CA should generally be given work of financial nature.
• Coordination in Directing  – among orders, instructions, and suggestions. Coordination is required for the free flow of information, sound leadership, and suitable incentives for good performances. Example a manager instructs the subordinates motivates them and also supervises their work.
• Coordination in controlling – coordination between planned standards and actual performances. Control of activities through personal observation and other techniques.

Q4)Discuss the need for coordination

A4)Need for coordination

• Growth in size – As organizations grow in size, the number of people in the organization also increases. They may work for cross purposes. So, coordination is needed to integrate their  efforts and activities, i.e., to bring unity of action.

• Functional differentiation – in an organization, there may be separate departments of production, finance, marketing, and human resources. All departments have their own objectives, policies, strategies, etc. So, there may arise a conflict between them. For example, the marketing department’s objective may be to increase sales by 10 percent by offering discounts. But the financial department may not approve such discounts as it means loss of revenue. Therefore, coordination is necessary to link the activities of various departments and to avoid conflicts among them.
• Specialization-  in modern organizations, there is a high degree of specialization, arising out of the complexities of modern technology and the diversity of tasks to be performed. So, organizations employ a number of specialists, who think that they only are members, which leads to conflict between them. Therefore, coordination is required to avoid conflict between the specialists and the other members.

In the absence of coordination, there will be chaos and conflicts in the organization as shown in the figure. There will be no synergies among production, sales, accounts, stores and other departments and the customers will not get timely delivery of goods.

Q5) What are the features of coordination?

A5)Features of coordination

Coordination is the integration, unification, synchronization of the efforts of the departments to provide unity of action for pursuing common goals. A force that binds all the other functions of management.

The management of an organization endeavours to achieve optimum coordination through its basic functions of planning, organizing, staffing, directing, and controlling.

Therefore, coordination is not a separate function of management because management is successful only if it can achieve harmony between different employees and departments. Here are some important features of coordination:

• It is relevant for group efforts and not for individual efforts. Coordination involves an orderly pattern of group efforts. In the case of individual efforts, since the performance of the individual does not affect the functioning of others, the need for coordination does not arise.
• It is a continuous and dynamic process. Continuous because it is achieved through the performance of different functions. Also, it is dynamic since functions can change according to the stage of work.
• Most organizations have some sort of coordination in place. However, the management can always make special efforts to improve it.
• Coordination emphasizes the unity of efforts. This involves fixing the time and manner in which the various functions are performed in the organization. This allows individuals to integrate with the overall process.

Q6) What are the limitations of coordination?

A6) Limitations of Coordination

• Information overload: given that in communication the information is filtered less, many times there is a large amount of data that must be ordered and this can lead to an overload.
• Loss of time: As a result of the previous disadvantage, the need for excessive data classification can cause too much useful and valuable time to be consumed.
• Positional problem: If we have a positional problem in one of the departments, because we have positional problem in one of the departments, because we have personnel that should not be there, communication could cause a failure that can lead to an objective of the organization cannot be met. Lack of understanding: If there is a lack of understanding among employees, this communication may not be successful.
• Procedure problem: Sometimes communication is interrupted by a procedural problem.
• Over-specialization: There may be a problem of specialization when organizations do not have uniformity within departments, causing communication difficulties. For example with the procedures or the vocabulary used by the different departments. When this happens, organizations have difficulties to function correctly without problems.
• Lack of motivation: communication often fails simply because the members of the organization are not willing to make the extra effort that is required. It may require contacting people in other units of the company and the channels and rules of interaction may not be entirely clear. Sometimes we do not know these people and the obligation to communicate with them can make us feel uncomfortable or take too long.
• Rivalry : rivalry within organizations with communication occurs, for example, when different levels of an organization do not cooperate with each other.
• Ignore vertical communication : In communication, employees of the same level contact or exchange information with each other. But in most cases they do not inform their superiors in hierarchy, breaking or ignoring vertical communication, which is also necessary.
• Low productivity : communication often fails simply because the members of the organization are not willing to make the extra effort required and waste useful and valuable time from their superiors, which leads to low productivity.

Q7) Explain the Evolution of the Management Thought

A7) PRE SCIENTIFIC

If we look at recorded history, a number of monumental examples of management can be traced. The Sumerian civilisation, Egyptian, Chinese, Greek and Roman civilizations represent significant practices in management.

They represent management concepts that helped in smooth administration of these civilizations. Though famous even today, they do not provide significant information about the way these civilizations were managed.

These concepts did not provide important insight into management of business (or economic) institutions. No important techniques were available to solve organisational problems until the end of 15th century. It was in 1494 that the technique of double entry book-keeping was introduced to maintain financial records of the business. In 1800s, management theories developed as a systematic field of knowledge. Until formal management theories developed, pre-scientific management theories contributed to the management thought.

Contribution made by some of the management thinkers is as follows:

1. Charles Babbage:

One of the early British thinkers on management, Babbage, was the forerunner of scientific management. His work was closely related to that of Adam Smith (an economist), as he emphasised on work measurement, cost determination, bonus plans and profit sharing specialisation (dividing the work into various jobs) to increase managerial efficiency. His findings are also reflected in Taylor’s scientific management. He introduced methods like work measurement, cost determination, bonus plans and profit sharing to improve industrial productivity.

2.     James Montgomery:

He was a textile owner-manager in Scotland. He focused on planning, organising and controlling of business and wrote management texts for their efficient working.

3.     Robert Owens:

He was a textile entrepreneur and is known as the father of Personnel Management. His emphasis was not on the process of industrialisation or division of labour but on development of people. He advocated that workers should be treated as human beings and their values and beliefs should be respected. If working conditions and needs of the workers are satisfied, they work to achieve the organisational goals.

He advocated improving living conditions (both factory and domestic conditions) of employees by upgrading the streets, houses, sanitation facilities etc. He also brought social and educational reforms for the employees.
He believed that higher wages for workers, participation in managerial decision-making and positive motivation can increase productivity. His ideas on management to coordinate economic performance with human relations are found in Hawthorne experiments also.

4.     Andrew Ure:

He was an English industrialist and focused on educating managers through training and moral education to make them contribute to organisational goals.

5.     Charles Dupin:

He was an industrial educator in France. According to him, besides technical knowledge for contributing to organisational output, managers also needed broader management skills to maximise industrial output. He emphasised more on management education than technical education.

Evaluation of Pre-Scientific Management Theories:

These theories were primarily related to the organisational environments. They focused on specific organisational problems in specific ways. As each manager had his own way of viewing the organisation, some emphasised on production and others on human relations.

There was no single universally accepted management theory that could apply to all organisations at all times. It was by the end of the 19th century that management became a systematic field of study. The early contributions include those made by Taylor in the early 20th century as scientific management.

Q8)Discuss the theory of Classical Approach

A8)Classical management theory is based on the belief that workers only have physical and economic needs. It does not take into account social needs or job satisfaction, but instead advocates a specialization of labor, centralized leadership and decision-making, and profit maximization.

Designed solely to streamline operations, increase productivity and enhance the bottom line, this idea arose in the late 19th century and gained prominence through the first half of the 20th century. While not widely subscribed to in modern times, this theory offers some principles that remain valid, to an extent, in small business settings in regards to manufacturing.

Concepts of the Ideal Workplace

The theory outlines an ideal workplace as one that rests on three main concepts:

• Hierarchical structure – Under classical management theory, workplaces are divided under three distinct layers of management. At the very top are the owners, board of directors and executives that set the long-range objectives for a firm. Middle management takes on the responsibility of overseeing supervisors while setting goals at the department level to fit within the confines of the managers’ budget. At the lowest level of the chain are supervisors, who manage day-to-day activities, address employee problems and provide training.
• Specialization – The classical management theory involves an assembly line view of the workplace in which large tasks are broken down into smaller ones that are easy to accomplish. Workers understand their roles and typically specialize in a single area. This helps increase productivity and efficiency while eliminating the need for employees to multi-task.
• Incentives – This theory believes that employees are motivated by financial rewards. It proposes that employees will work harder and be more productive if they are awarded incentives based on their work. Employers who can motivate their employees using this tactic may be able to achieve increased production, efficiency and profit.

The autocratic leadership model is the central part of classical management theory. In this system, there is no need to consult large groups of people for decisions to be made. A single leader makes a final decision and it is communicated downward for all to follow. This leadership approach can be beneficial when decisions need to be made quickly by one leader, rather than a group of company officials.

Strengths of the Theory

While not typically used in today’s workplaces, the classical management theory does have some strong points. They include:

• A clear structure for management, its functions and operations
• The division of labor that can make tasks easier and more efficient to accomplish, which can enhance productivity
• Clear definition of employee roles and tasks with little left to guesswork

Flaws in the Model

When the theory is put into action, companies can see their production numbers increase. There are, however, some flaws that make this particular management model less than attractive in workplaces. These pitfalls include:

• By attempting to predict and control human behavior, this theory overlooks the importance of human relations and creativity.
• In essence, this theory views workers almost as machines, but fails to take into account what job satisfaction, employee input and morale can bring to the workplace.
• The reliance on prior experience and the ability to apply it almost solely to manufacturing settings is another drawback of this theory.

The classical management theory can help streamline manufacturing operations where high productivity is a must. However, it fell out of favor after the rise of the human relations movement, which sought to gain a better understanding of the human motivation for productivity. Although some of its facets are viable for certain circumstances, this theory generally does not translate well to workplaces today.

Q9) Describe Scientific management – F. W. Taylor’s contribution

A9)One of the earliest of these theorists was Frederick Winslow Taylor. He started the Scientific Management movement, and he and his associates were the first people to study the work process scientifically. They studied how work was performed, and they looked at how this affected worker productivity. Taylor's philosophy focused on the belief that making people work as hard as they could was not as efficient as optimizing the way the work was done.

In 1909, Taylor published "The Principles of Scientific Management." In this, he proposed that by optimizing and simplifying jobs, productivity would increase. He also advanced the idea that workers and managers needed to cooperate with one another. This was very different from the way work was typically done in businesses beforehand. A factory manager at that time had very little contact with the workers, and he left them on their own to produce the necessary product. There was no standardization, and a worker's main motivation was often continued employment, so there was no incentive to work as quickly or as efficiently as possible.

Taylor believed that all workers were motivated by money, so he promoted the idea of "a fair day's pay for a fair day's work." In other words, if a worker didn't achieve enough in a day, he didn't deserve to be paid as much as another worker who was highly productive.

With a background in mechanical engineering, Taylor was very interested in efficiency. While advancing his career at a U.S. Steel manufacturer, he designed workplace experiments to determine optimal performance levels. In one, he experimented with shovel design until he had a design that would allow workers to shovel for several hours straight. With bricklayers, he experimented with the various motions required and developed an efficient way to lay bricks. And he applied the scientific method to study the optimal way to do any type of workplace task. As such, he found that by calculating the time needed for the various elements of a task, he could develop the "best" way to complete that task.

These "time and motion" studies also led Taylor to conclude that certain people could work more efficiently than others. These were the people whom managers should seek to hire where possible. Therefore, selecting the right people for the job was another important part of workplace efficiency. Taking what he learned from these workplace experiments, Taylor developed four principles of scientific management. These principles are also known simply as "Taylorism".

Four Principles of Scientific Management

Taylor's four principles are as follows:

1. Replace working by "rule of thumb," or simple habit and common sense, and instead use the scientific method to study work and determine the most efficient way to perform specific tasks.
2. Rather than simply assign workers to just any job, match workers to their jobs based on capability and motivation, and train them to work at maximum efficiency.
3. Monitor worker performance, and provide instructions and supervision to ensure that they're using the most efficient ways of working.
4. Allocate the work between managers and workers so that the managers spend their time planning and training, allowing the workers to perform their tasks efficiently.

Critiques of Taylorism

Taylor's Scientific Management Theory promotes the idea that there is "one right way" to do something. As such, it is at odds with current approaches such as MBO   (Management By Objectives), Continuous Improvement   initiatives, BPR   (Business Process Reengineering), and other tools like them. These promote individual responsibility, and seek to push decision making through all levels of the organization.

Q10) Describe Classical organization theory- Henry Fayol’s principles

A10)Fayol was an engineer who worked his way up to become manager of the Compagnie de Commentry-Fourchambault-Decazeville mining company in France, at the tail end of the industrial revolution. Under his watch, the struggling firm prospered.

He wrote, "When I assumed the responsibility for the restoration of Decazeville, I did not rely on my technical superiority... I relied on my ability as an organizer [and my] skill in handling men."

Fayol's 14 Principles of Management identified the skills that were needed to manage well. As well as inspiring much of today's management theory, they offer tips that you can still implement in your organization. Fayol also created a list of the five primary Functions of Management, which go hand in hand with the Principles.

It was the reality of Fayol's day-to-day managing, seeing what worked and what didn't, that informed his 14 Principles of Management. By focusing on administrative over technical skills, the Principles are some of the earliest examples of treating management as a profession. They are:

1. Division of Work – Assign each employee a task that they can become proficient at. Productivity increases as employees become more skilled, assured and efficient. Today, experts still warn against multi-tasking  .
2. Authority – Managers must possess the authority to give orders, and recognize that with authority comes responsibility. As well as rank, Fayol argues that a manager's intelligence, experience and values should command respect.
3. Discipline – Everyone should follow the rules  . To help, you can make agreements between the organization and employees clear for all to see.
4. Unity of Command – Fayol wrote that "an employee should receive orders from one supervisor only." Otherwise, authority, discipline, order, and stability are threatened.
5. Unity of Direction – Teams with the same objective should be working under the direction of one manager, using one plan. That, Fayol wrote, "is the condition essential to unity of action, coordination of strength and focusing of effort."
6. Collective Interest Over Individual Interest – Individuals should pursue team interests over personal ones – including managers.
7. Remuneration – Employee satisfaction depends on fair remuneration for everyone – financial and non-financial. Fayol said pay should be fair and reward "well-directed effort."
8. Centralization – Balancing centralized decision making (from the top) with letting employees make decisions. Or as Fayol wrote, "A place for everyone and everyone in his place."
9. Scalar Chain – Employees should know where they stand in the organization's hierarchy and who to speak to within a chain of command. Fayol suggested the now-familiar organization chart as a way for employees to see this structure clearly.
10. Order – Fayol wrote that, "The right man in the right place" forms an effective social order. He applied the same maxim to materials: right one, right place. Academics note that this principle pre-empted the Just in Time   (JIT) strategy for efficient production.
11. Equity – Managers should be fair to all employees through a "combination of kindliness and justice." Only then will the team "carry out its duties with... Devotion and loyalty."
12. Stability of Tenure of Personnel – Organizations should minimize staff turnover   and role changes to maximize efficiency. If people are secure and good at their jobs, they are happier and more productive.
13. Initiative – Employees should be encouraged to develop and carry out plans for improvement. As Fayol wrote, "At all levels of the organizational ladder, zeal and energy on the part of employees are augmented by initiative."
14. Esprit de Corps – Organizations should strive to promote team spirit, unity, and morale.

F.W.Taylor and Henry Fayol are associated with the classical management theory. Both of them contributed immensely towards the study of management as a discipline. The principles of Taylor and Fayol are mutually complementary to each other in the following terms:

The difference between Fayol and Taylor’s Theory of Management, are explained in the points presented below:

1. Henry Fayol is a father of modern management who enunciated fourteen principles of management, for improving overall administration. As against, F.W. Taylor is a father of scientific management who developed four principles of management, for increasing overall productivity.

2. Henry Fayol introduced the concept of a general theory of administration. F.W. Taylor laid down the concept of Scientific Management.

3. Henry Fayol emphasized the working of top-level management, whereas F.W. Taylor stressed the working of production-level management.

4. Fayol’s management theory has universal applicability. Unlike Taylor, whose management theory applies to a number of organizations only.

5. The basis of the formation of Fayol’s theory is personal experience. Conversely, Taylor’s principles rely on observation and experimentation.

6. Fayol is oriented towards managerial function. On the contrary, Taylor focused on production and engineering.

7. The system of wage payment determined by Taylor is differential piece rate system, while Fayol stressed on sharing of profits with managers.

8. The approach of Taylor is termed as Engineer’s approach. In contrast, Fayol’s approach is accepted as manager’s approach.

Q11) Discuss the Neo classical Approach-Mayo

A11)The Neo-Classical approach was evolved over many years because it was found that classical approach did not achieve complete production efficiency and workplace harmony. Managers still encountered difficulties and frustrations because people did not always follow predicted or rational patterns of behaviour.

Thus, there was increased interest in helping managers deal more effectively with the ‘people side’ of their organisation. The neo-classical theory reflects a modification over classical theories.

The neo-classical approach recognizes the primacy of psychological and social aspects of the workers as an individual and his relations within and among groups and the organisation. It gained importance after the World War I, particularly in the wake of the “Hawthorne experiments” at Western Electric Company by Elton Mayo 10 during 1924 to 1932. Elton Mayo is generally recognized as the father of the Human Relations Movement.

The basic features of neo­classical approach are:

(i) The business organisation is a social system.

(ii) Human factor is the most important element in the social system.

(iii) It revealed the importance of social and psychological factors in determining worker productivity and satisfaction.

(iv) The behaviour of an individual is dominated by the informal group of being a member.

(v) The aim of the management is to develop social and leadership skills in addition to technical skills. It must be done for the welfare of the workers.

(vi) Morale and productivity go hand-to-hand in an organization.

Q12) Explain the Human Relations Approach-Mayo

A12)Hawthorne experiment led to the development of human relations approach. It revealed the importance of social and psychological factors in determining workers, productivity and satisfaction. This movement is marked by informal grouping, informal relationship and leadership Pattern of communication and philosophy of industrial humanism.

The values of human relation are exemplified in the work of Douglas McGregor and A. H. Maslow. Human relation approach is a social psychological approach and suggests business enterprise is a social system in which group norms play a significant role.

Financial incentive was less of a determining factor on a workers output than were group pressure and acceptance and the concomitant security. It ushered an era of organisational humanism. Managers would no longer consider the issue of organisation design without including effects on work groups, employees’ attitudes, and manager-employee relationships.

Elton Mayo, Mary Parker Follett and Douglas McGregor, Roethlisberger, Dickson, Dewey and Lewin, etc., were the main contributors that led to the development of Human Relations Movement.

The human relations movement marked by the following factors:

• This movement viewed organization as a social system composed of numerous interacting parts in which groups norms exercise a significant influence on the behaviour and performance of individuals. The movement emphasized that apart from economic needs, the employees have other social and psychological needs such as recognition, affiliation, appreciation, self-respect, etc.
• The groups determine the norms of behaviour for the group member and thus exercise a great influence on the attitudes and performance of workers. Group Dynamics at the workplace become a major force. The human relations approach was focused on teaching people-management skills, as opposed to technical skills.
• This approach strongly believed that there should be no conflicts or clashes in the organisation; and if it arises, it must be removed through improvement of human relations in the organisation. They consider that informal organisation does also exist within the framework of formal organisation and it affects and is affected by the formal organisation.

Contributions of Human Relations Approach or Hawthorne Studies:

The human relations proposed the following points as a result of their findings of the Hawthorne experiments:

1. Social System:

The organisation in general is a social system composed of numerous interacting parts. The social system defines individual roles and establishes norms that may differ from those of the formal organisation.

The workers follow a social norm determined by their co­workers, which defines the proper amount of work, rather than try to achieve the targets management thinks they can achieve, even though this would have helped them to earn as much as they physically can.

2. Social Environment:

The social environment on the job affects the workers and is also affected by them. Management is not the only variable. Social and psychological factors exercise a great influence on the behaviour of workers. Therefore, every manager should adopt a sound human approach to all organizational problems.

3. Informal Organization:

The informal organisation does also exist within the framework of formal organisation and it affects and is affected by the formal organisation.

4. Group Dynamics:

At the workplace, the workers- often do not act or react as individuals but as members of groups. The group determines the norms of behaviour for the group members and thus exercises a powerful influence on the attitudes and performance of individual workers. The management should deal with workers as members of work groups rather than as individuals.

5. Informal Leader:

There is an emergence of informal leadership as against formal leadership and the informal leader sets and enforces group norms. He helps the workers to function as a social group and the formal leader is rendered ineffective unless he conforms to the norms of the group of which he is supposed to be in-charge.

6. Communication:

Two-way communication is necessary because it carries necessary information downward for the proper functioning of the organisation and transmits upward the feelings and sentiments of people who work in the organisation.

It will help in securing workers cooperation and. Participation in the decision-making process. Workers tend to be more productive when they are given the opportunity to express their feelings, opinions and grievances. This also gives them psychological satisfaction.

7. Non-Economic Rewards:

Money is only one of the motivators, but not the sole motivator of human behaviour. The social and psychological needs of the workers are very strong. So, non-economic rewards such as praise, status, inter-personal relations, etc., play an important role in motivating the employees. Such rewards must be integrated with the wages and fringe benefits of the employees.

8. Conflicts:

There may arise conflicts between the organizational goals and group goals. Conflicts will harm the interest of workers if they are not handled properly. Conflicts can be resolved through improvement of human relations in the organisation.

Criticism of Human Relations Approach:

The human relations approach has been criticized on the following grounds:

1. Lack of Scientific Validity:

The human relation drew conclusions from Hawthorne studies. These conclusions are based on clinical insight rather than on scientific evidence. The groups chosen for study were not representative in character. The findings based upon temporary groups do not apply to groups that have continuing relationship with one another. Moreover, the experiments focused on operative employees only.

2. Over-Emphasis on Group:

The human relations approach over-emphasizes the group and group decision-making. But, in practice, groups may create problems for the management and collective decision-making may not be possible.

3. Over-Stretching of Human Relations:

It is assumed that all organizational problems are amenable to solutions through human relations. This assumption does not hold good in practice. The satisfied workers may not be more productive workers.

4. Limited Focus on Work:

The human relations approach lacks adequate focus on work. It puts all the emphasis on interpersonal relations and on the informal group. It tends to overemphasize the psychological aspects at the cost of the structural and technical aspects.

5. Over-Stress on Socio-Psychological Factors:

The human relations approach undermines the role of economic incentives in motivation and gives excessive stress on social and psychological factors. If the wages are too low, the employees will feel dissatisfied despite good inter­personal relations at the work place. Thus, it may be said that the human relations approach seeks to exploit the sentiments of employees for the benefit of the organisation.

6. Negative View of Conflict between Organizational and Individual Goals:

It views conflict between the goals of the organisation and those of individuals as destructive. The positive aspects of conflicts such as overcoming weaknesses and generation of innovative ideas are ignored.

Managers began thinking in terms of group processes and group rewards to supplement their former concentration on the individual worker. The study of human behaviour and human interactions has assumed much significance as a result of this approach.

No doubt, this approach has provided many new ideas in managing the organisation, but this is not free from certain limitations – Human relations approach cannot be treated as complete package to deal with human being effectively, because no attempt had been made for studying and analyzing human behaviour systematically and scientifically.

The human relations approach undermines the role of economic incentives in motivation and gives excessive stress on social and psychological factors. In actual practice, financial incentive plays a crucial rule to motivate employers. The human relations approach presented a negative view of conflict between organisational and individual goals.

It views these conflicts as destructive. The positive aspects of conflicts such as overcoming weaknesses and generation of innovative ideas are ignored. The human relation drew conclusions from Hawthorne experiments which were clinical based, rather than scientific.

The experiments focused on a particular group chosen for study which did not represent the entire work force. The human relations approach did not give adequate focus on work. It puts all the emphasis on interpersonal relations and on the informal group. It tends to overemphasize the socio-psychological aspects at the cost of structural and technical aspects.

The human relations approach over emphasized on group Dynamics. But in actual practice, group and group norms, in formal process exercise a light influence in organisation functioning.

Q13)Describe Hawthorne Experiment

A13) A famous series of studies of human behaviour in work situations was conducted at the Western Electric Company from 1924 to 1933. In 1927 a group of researchers led by Elton Mayo and Fritz J. Roethlisberger and Dickson at the

Harvard Business School were invited to join at Western Electric’s Hawthorne plant near Chicago. The studies began as an attempt to investigate the relationship between the level of lighting in the workplace and the productivity of workers.

The initial experiment carried out over a period of three years sought to determine the effects of different levels of illumination on worker’s productivity. The results of the experiments were ambiguous. When the test group’s lighting conditions were improved, productivity tended to increase just as expected, although the increase was erratic.

But there was a tendency for productivity to continue to increase when the lighting conditions were made worse, besides lighting was influencing the worker’s performance, as the work group was not able to maintain relationship between illumination and productivity.

In the second set of experiments, a smaller group of six female telephone operators was put under close observation and control. Frequent changes were made in working conditions such as hours of work, lunch break, rest periods, etc.

Again the results were ambiguous, as performance tended to increase even when the improvements in working conditions were withdrawn. It was found that socio-psychological factors exercised a greater influence on productivity and working conditions.

The third set of experiment attempted to understand how group norms affect group effort and output. It was noted that the informal organisation of workers controlled the norms established by the groups in respect of each member’s output. The researcher concluded that informal work groups have a great influence and productivity.

In the subsequent experiments, Mayo and his associates decided that financial incentives, when these were offered, were not causing the productivity improvements. The researchers concluded that employees would work harder if they believed management was concerned about their welfare, and supervisors paid special attention to them. This phenomenon was subsequently labelled as the Hawthorne Effect.

These findings concerning human behaviours at work focused on the worker as an individual and considered the importance of caring for his feelings and understanding the dynamics of informal organisation of workers. The view point of Hawthorne Effect thus gave birth to human relations movement and provided the thrust toward democratization of organizational power structures and participative management. It ushered in an era of organizational humanism.

Q14)Give the meaning of Behavioral Approach

A14) Behavioral Approach is the most important approach in the study of management and administration that has emerged during 20th century. The group which has the greatest influence in the growth and development of this new field, consisted of Chester Barnard, J. G. March, Herbert Simon, Douglas McGregor, Abraham Maslow, Rensis Likert, Warren Bennis, etc. Behaviorist’s empirical investigation based on systematic and detailed observation in organizations supported by findings of social sciences of human behavior, provided the basis for building uniformities and concepts, which could be utilized by managers for improved practices, instead of relying on personal experience which was often based on insufficient foundation in fact. The ultimate end of the organization behavior is to understand, explain, and predict human behavior in the same sense in which scientists understand, explain and predict the behavior of physical forces or biological factors. Hence behavioral science is concerned with seeking knowledge about the human behavior in order to enhance understanding of why people behave as they do, especially in relation to their interaction with other in organization. This should enable management to make human life in the working place more meaningful, or rewarding and more enjoyable. However, this is more phase of synthesis (combining of separate parts or elements) rather than anti-thesis. Thus, while the traditional or classical theory of organization was task-centered and the humanistic or neo-classical theory was employee-centered, the new theory or behavioral approach seeks a reconciliation or synthesis of these two approach, i.e. administration is both structure and the people working in it.

Q15) Discuss the Scope of Behavioral Approach

A15)The implementation function involves management’s responsibility for the actual performance of organizational tasks or work by the human elements for facilitating the implementation include structural arrangements, plus behavioral (people) and communication (information) concepts designed to develop and sustain employee cooperation and satisfaction in performing organizational tasks. By the way of introduction, these arrangements and concepts typically includes:

Structural: Making the job more interesting, giving the employee more responsibility. Decreasing  control from above.

Behavioral: Behavior is a manner of acting. It refers to a person’s conduct in carrying out specified activities. Providing   more  job status. Giving   the employee a  chance to make decision. Allowing   him to assist in leading others.

Communication: Listening to his problems seriously. Helping  him to interact with his fellow workers.  Dealing  with him openly.

Methodology: The behavioral science approach involves the use of social and psychological concepts and knowledge to influence, motivate and coordinate the human element in achieving performance in the work place. For example, a manner might do the following to get an employee to prefer a task.

Personality: Personality of a human being is a complex combination physical and mental attributes, values, attitudes, beliefs, tastes, ambition, interest and habit.

Influence: Set an example, make suggestion.

Motivation: Use praise, offer promotion.

Coordinate: Provide formal instruction, offer assistance.

The know-how and methodology to attain employee satisfaction have come from various fields including industrial and social psychology, sociology and anthropology, supplemented by the practice of management itself. Psychology, the science of human nature and behavior, studies the human mind, its mental state and its processes. Industrial and social psychology are specialized branches of this discipline that deal with the study of human behavior in an industrial and in a purely social setting respectively. Sociology is the science of origin, development, organization and functioning of human society, including its fundamental laws of social relation. Anthropology is the science that deals with the origins, physical and cultural development, racial characteristics and social customs and beliefs of mankind.

It should be apparent that understanding man’s action in an organizational setting is no simple task. Although it may be easy to see that it is essential to have satisfied employees, it is not easy to know just what and how to satisfy them. The behavioral science discipline has emerged as an interdisciplinary effort directed at gaining a better understanding of human behavior in organizations, as governed by satisfaction of man’s needs and wants and by his innate (posed by birth) social, psychological and anthropological traits (distinguish quality).

Q16) What are the Purpose/ Objectives of Behavioral Approach ?

A16)The overall purpose of the behavioral science is to induce (persuade or influence) performance by the human element and thereby achieve individual and group satisfaction and organizational productivity. The satisfaction performance relationship is complex and is affected by a number of different factors. Earlier economic rewards in the form of ways were viewed or considered as the primary satisfier of most employees, but the behavioral science view that employees are also satisfied and motivated by other type of things such as good working conditions, an interested boss, association with fellow employees, an impressive title, or personal accomplishment. Thus, the major encouraging impetus has been to stress the creation of an atmosphere or environment of achievement and fulfillment of all members of the organization which is an enlargement of the view of the early management about satisfaction and performance.

Q17) What are the Pre-requisites or Characteristics of Behavioral Approach ?

A17) 1. Organizational-equilibrium or steady-state: The organization has been described as a system in equilibrium, which receives contribution in the form of (money) effort, time, skill, expertise etc. and offers inducement in return for these contribution. These inducement include the organizational goal itself, conservation and growth of the organization) and incentives unrelated to these two key issues in any organization is about two interests i.e. employer interest and employees interest.

Employer seeks (try to find or obtain) to achieve more with the least cost of rewards and incentives. Whereas employees always seek to receive more rewards and benefits from the management. In this regard, the need of organizational equilibrium is inevitable. To Herbert Simon and Chester Barnard ‘organizational-equilibrium’ means balance between what the individual contributes to the organization in the form of energy, skill and loyalty and what he receives in return by the ways of recognition, pay and security. March calls for the same “the general theory of organizational equilibrium.”

2. Group Dynamics: Power or force  that produce change, action or effects. (Dynamics in the science is the study or interplay of force or motion – branch of physics dealing with movement and force). This is the field of inquiry that deals with the development of small groups, interactions among group members, and group and inter-group behavior, the basic assumption underlying the study of group dynamics are;

Groups are inevitable and ubiquitous (present everywhere and every time).

Groups mobilize powerful forces that produce effects of almost importance to individuals.

Groups may produce good or bad consequences from groups can be deliberately enhanced.

Group: A group is two or more persons who are interacting with one another in such a manner that each person influences and is influenced by each other in a fundamental characteristics of group.

Secondly, people should possess influencing power to each other or group members are mutually dependent with respect to the attainment of one or more common goals.

Dynamics: Power or forces that produce movement or a force that produce change, action or effects.

Group Dynamics is concerned with the interaction and forces among group members in a social situation. Group dynamic deals with dynamics of members of formal groups in the organization, which is usually small in size.

1. Authority and Leadership: Authority (power-coercive-power, legitimate power, reward power, expert power) is only one of the number of forms of influences. Its distinguishing characteristics are that it does not seek to convince the subordinate, but only to obtain his acquiescence (acceptance without protest). In actual exercise, of course, authority is usually liberally admixed with suggestion and persuasion. An important function of authority is to permit a decision to be made and carried out, even when agreement cannot be reached. Perhaps this arbitrary aspects of authority has been over emphasized however, in discussions of the concept. In any case, the arbitrary element in authority is limited to the “area of acceptance” of the subordinate.

Another consequences or dimension implication of the group theory is that authority springs from the group than from the top-down. An understanding of this social process helps the administrators to understand resistance to formal authority in the form of slowdown of work, in punctuality and absenteeism. The organized resistance to orders from above is essentially a social phenomenon and called for technological skill of motivation and leadership. It calls for a type of supervision in which leadership replaces compulsion.

2.     Organization as a social system: According to behaviorist organizations are composed of large groups or hierarchies, which are an aggregation of many small groups, both formal and informal. It is a complex organization, in which the informality of the small face to face groups is only a part of total organizational picture. Hence, organization is therefore, be viewed as a social institution. So, instead of viewing organization as a hierarchy of jobs or body of informal group

Relationships, it is now a social institution living in a cultural environment of its own.

Q18) Explain the meaning of Systems Approach

A18) In the 1960, an approach to management appeared which try to unify the prior schools of thought. This approach is commonly known as ‘Systems Approach’. Its early contributors include Ludwing Von Bertalanfty, Lawrence J. Henderson, W.G. Scott, Deniel Katz, Robert L. Kahn, W. Buckley and J.D. Thompson.They viewed organisation as an organic and open system, which is composed of interacting and interdependent parts, called subsystems. The system approach is top took upon management as a system or as “an organised whole” made up of sub- systems integrated into a unity or orderly totality.

Systems approach is based on the generalization that everything is inter-related and inter­dependent. A system is composed of related and dependent element which when in interaction, forms a unitary whole. A system is simply an assemblage or combination of things or parts forming a complex whole.

Q19) What are the Features of Systems Approach?

A19)(i) A system consists of interacting elements. It is set of inter-related and inter-dependent parts arranged in a manner that produces a unified whole.

(ii) The various sub-systems should be studied in their inter-relationships rather, than in isolation from each other.

(iii) An organisational system has a boundary that determines which parts are internal and which are external.

(iv) A system does not exist in a vacuum. It receives information, material and energy from other systems as inputs. These inputs undergo a transformation process within a system and leave the system as output to other systems.

(v) An organisation is a dynamic system as it is responsive to its environment. It is vulnerable to change in its environment.

Evaluation of System Approach:

The systems approach assists in studying the functions of complex organisations and has been utilized as the base for the new kinds of organisations like project management organisation. It is possible to bring out the inter-relations in various functions like planning, organising, directing and controlling. This approach has an edge over the other approaches because it is very close to reality. This approach is called abstract and vague. It cannot be easily applied to large and complex organisations. Moreover, it does not provide any tool and technique for managers.

Q20) Explain the Contingency Approach-Lawrence & Lorsch

A20) The all inclusive cycle approach is the most established and one of the most mainstream ways to deal with the board thought. It is otherwise called the Universalist or useful methodology. As indicated by the all inclusive cycle approach general cycle approach.It requires a similar reasonable administration measure In the organization, all things considered, public or private or huge or little, requires a similar balanced cycle. The Universalist methodology depends on two fundamental suspicions. To begin with, in spite of the fact that the motivation behind associations may shift for instance, business, government, training, or religion and so forth A center administration measure stays as before over all associations. Fruitful chiefs, thusly, are compatible among associations of contrasting purposes. Second, the general administration cycle can be decreased to a bunch of isolated capacities and related standards. In 1916, at 75 years old, Fayol's work has left a perpetual blemish on 20th century the executives thinking. Fayol was initial an architect and later a fruitful head in an enormous French mining and metallurgical concern, which is maybe why he didn't turn to hypothesis in his spearheading the management book. Or maybe, Fayol was a chief who endeavored to interpret his wide managerial experience into viable rules for the fruitful administration of a wide range of associations.

1. Division of Work: Representatives spent significant time in various zones and they have various aptitudes. Various degrees of mastery can be recognized inside the information zones from generalist to expert. Individual and expert improvements uphold this. As per Hanery Fayol specialization advances proficiency of the labor force and builds profitability. Furthermore, the specialization of the labor force expands their precision and speed. This administration standard of the 14 standards of the executives is pertinent to both specialized and administrative exercises.

2. Authority and Responsibility: In request to complete things in an association, the executives have the position to provide requests to the representatives. Obviously with this position comes duty. As per Hanery Fayol, the going with force or authority gives the administration the option to provide requests to the subordinates.

3. Discipline: This rule is about dutifulness. It is frequently a portion of the fundamental beliefs of a mission of articulation and vision as great lead and conscious connections. This administration guideline is fundamental and is viewed as the oil to make the driving force of an association run easily.

4. Unity of Command: The administration standard 'Solidarity of order' implies that an individual representative ought to get orders from one administrator and that the worker is liable to that supervisor. In the event that assignments and related obligations are given to the representative by more than one supervisor, this may prompt disarray which may prompt potential clashes for workers. By utilizing this standard, the obligation regarding missteps can be set up more without any problem.

5. Unity of Direction: This administration guideline is about concentration and solidarity. All workers convey the very exercises that can be connected to similar targets. All exercises must be completed by one gathering that frames a group. These exercises must be portrayed in a strategy. The administrator is eventually liable for this arrangement and he screens the advancement of the characterized and arranged exercises. Center zones are the endeavors made by the representatives and coordination.

6. Subordinate Individual Interest: There are in every case a wide range of interests in an association. To have an association work well, Hanery Fayol demonstrated that individual interests are subordinate to the interests of the association. The essential spotlight is on the hierarchical targets and not on those of the person. This applies to all degrees of the whole association, including the chiefs.

7. Remuneration: Motivation and profitability are near each other to the extent the smooth running of an association is concerned. This administration rule of the 14 standards of the board contends that the compensation should be adequate to keep representatives inspired and profitable. There are two kinds of compensation specifically non-money related a commendation, more duties, credits and financial pay, reward or other monetary pay. At last, it is tied in with remunerating the endeavors that have been made.

8. The Degree of Centralization: Management and authority for dynamic cycle must be appropriately adjusted in an association. This relies upon the volume and size of an association including its progressive system. Centralization suggests the grouping of dynamic authority at the top administration. Sharing of experts for the dynamic cycle with lower levels is alluded to as decentralization by Hanery Fayol. Hanery Fayol showed that an association ought to make progress toward a decent equilibrium in this.

9. Scalar Chain: Hierarchy introduces itself in some random association. This shifts from senior administration to the most reduced levels in the association. Hanery Fayol "progression" the board rule expresses that there should be an away from in the territory of power. This can be viewed as a kind of the management structure. Every representative can contact a director or an unrivaled in a crisis circumstance without testing the pecking order. Particularly, when it concerns reports about cataclysms to the prompt directors/bosses.

10. Order: According to this guideline workers in an association must have the correct assets available to them with the goal that they can work appropriately in an association. Notwithstanding social request and duty of the supervisors, workplace must be protected, perfect and clean.

11. Equity: The administration standard of value regularly happens in the guiding principle of an association. As indicated by Hanery Fayol representatives must be dealt with sympathetic and similarly. Representatives must be in the ideal spot in the association to do things right. Administrators ought to oversee and screen this cycle and they should treat representatives decently and fairly.

12. Stability of Tenure of Personnel: This guideline speaks to sending and overseeing of faculty and this should be in offset with the administration that is given from the association. The executives endeavor to limit worker turnover and to have the correct staff in the perfect spot. Center zones, for example, successive difference in position and adequate improvement must be overseen well.

13. Initiatives: Hanery fayol contended that with this administration standard workers should be permitted to communicate groundbreaking thoughts. This supports interest and inclusion and makes added an incentive for the organization. Representative activities are a wellspring of solidarity for the association as per Hanery Fayol urges the workers to be involve and interested.

14. Esprit de Corps: This standard represents taking a stab at the inclusion and solidarity of the workers. Directors are liable for the improvement of spirit in the work environment; exclusively and in the territory of correspondence. Esprit de corps adds to the improvement of the way of life and makes an air of shared trust and comprehension.

Lawrence & Lorsch

Lawrence and Lorsch (Organization and Environment, 1967) found, in a study of ten firms in three different industrial environments (plastics, food, containers) in the United States, that the degree of uncertainty in the three ‘task sub-environments’ of the firms (market, techno-economic, and scientific) was strongly related to their internal organizational arrangement. The greater   the uncertainty, the greater the need to differentiate the sales, production, and research and development departments within the firm. However, the greater the degree of internal differentiation, the greater the need for appropriate mechanisms for integrating and resolving conflicts between the various segments.Like Woodward and Burns, the premiss of Lawrence and Lorsch's work is that there is no ‘one best way’ to organize a given technical process, an explicit challenge to the assumption made by the scientific management approach that science can always identify the quickest and best way to perform work-tasks. This insight was a major advance on those organizational theories (such as the scientific management approach) which assumed that organizations operate unproblematically as more or less closed systems.

Q21)Discuss the concept of MBO

A21)MBO

Management by Objectives (MBO) is a strategic approach to enhance the performance of an organization. It is a process where the goals of the organization are defined and conveyed by the management to the members of the organization with the intention to achieve each objective.

An important step in the MBO approach is the monitoring and evaluation of the performance and progress of each employee against the established objectives. Ideally, if the employees themselves are involved in setting goals and deciding their course of action, they are more likely to fulfill their obligations.

Steps in Management by Objectives Process

1. Define organization goals

Setting objectives is not only critical to the success of any company, but it also serves a variety of purposes. It needs to include several different types of managers in setting goals. The objectives set by the supervisors are provisional, based on an interpretation and evaluation of what the company can and should achieve within a specified time.

2. Define employee objectives

Once the employees are briefed about the general objectives, plan, and the strategies to follow, the managers can start working with their subordinates on establishing their personal objectives. This will be a one-on-one discussion where the subordinates will let the managers know about their targets and which goals they can accomplish within a specific time and with what resources. They can then share some tentative thoughts about which goals the organization or department department can find feasible.

3. Continuous monitoring performance and progress

Though the management by objectives approach is necessary for increasing the effectiveness of managers, it is equally essential for monitoring the performance and progress of each employee in the organization.

4. Performance evaluation

Within the MBO framework, the performance review is achieved by the participation of the managers concerned.

5. Providing feedback

In the management by objectives approach, the most essential step is the continuous feedback on the results and objectives, as it enables the employees to track and make corrections to their actions. The ongoing feedback is complemented by frequent formal evaluation meetings in which superiors and subordinates may discuss progress towards objectives, leading to more feedback.

6. Performance appraisal

Performance reviews are a routine review of the success of employees within MBO organizations.

Q22)What are  the Benefits and limitations of Management by Objective?

A22) The Benefits of Management by Objective are:

• Management by objectives helps employees appreciate their on-the-job roles and responsibilities.

• The Key Result Areas (KRAs) planned are specific to each employee, depending on their interest, educational qualification, and specialization.
• The MBO approach usually results in better teamwork and communication.
• It provides the employees with a clear understanding of what is expected of them. The supervisors set goals for every member of the team, and every employee is provided with a list of unique tasks.
• Every employee is assigned unique goals. Hence, each employee feels indispensable to the organization and eventually develops a sense of loyalty to the organization.
• Managers help ensure that subordinates’ goals are related to the objectives of the organization.

Limitations of Management by Objectives

• Management by objectives often ignores the organization’s existing ethos and working conditions.
• More emphasis is given on goals and targets. The managers put constant pressure on the employees to accomplish their goals and forget about the use of MBO for involvement, willingness to contribute, and growth of management.
• The managers sometimes over-emphasize the target setting, as compared to operational issues, as a generator of success.
• The MBO approach does not emphasize the significance of the context wherein the goals are set. The context encompasses everything from resource availability and efficiency to relative buy--in from the leadership and stakeholders.
• Finally, there is a tendency for many managers to see management by objectives as a total system that can handle all management issues once installed. The overdependence may impose problems on the MBO system that it is not prepared to tackle, and that frustrates any potentially positive effects on the issues it is supposed to deal with.

Q23) Discuss the theory of Peter F Drucker

A23)Many past management theorists coined terms and concepts that oppose contemporary management styles. But Peter Drucker, hailed as the father of modern management, formulated a theory that is still used today.

Drucker believed that managers should, above all else, be leaders. Rather than setting strict hours and discouraging innovation, he opted for a more flexible, collaborative approach. He placed high importance on decentralization, knowledge work, management by objectives (MBO) and a process called SMART.To lead your team to success while supporting and encouraging each individual, consider channeling Drucker's approach. Here's how to implement his management theory.

1. Delegate equal power across the board.

While it's important that employees respect you as their manager, they shouldn't feel that they're below you. Every worker should have the opportunity to speak up and share ideas with their team, whether it's during staff meetings or one-on-one conferences.

When workers are treated as equals, they're more confident and motivated in their work, which benefits the company as much as it benefits them. Talk to each employee as though their role is as necessary as yours (because it is), and remind them that they have a say in the organization.

2.     Encourage collaboration.

Collaboration is a crucial part of every organization. Rather than pitting employees against each other, or fostering an environment where employees keep to themselves, urge them to work together by sharing ideas, tips and guidance.

This doesn't mean your employees shouldn't work individually, but they shouldn't feel like they can't ask for help or inspiration from others. Your staff should feel like a team, and you should serve as their coach.

3.     Increase efficiency.

To ensure you're continuing to prioritize productivity, utilize the concept of MBO, a process that calls for workers of all levels to work together to reach a common goal. There are five steps to MBO:

• Review goals
• Set objectives
• Monitor progress
• Evaluate performance
• Reward employees

These goals should be SMART, or specific, measurable, achievable, relevant and time-oriented. Call your team together and discuss your SMART goals to ensure everyone is on the same page and understands their part in the overall objectives of the organization.

4.     Boost innovation.

You want your workers to be confident and willing to take risks. Create an innovative atmosphere and lead by example, showing your employees that mistakes are not shortcomings.

If your team sees that you're human, that effort does not always lead to success, they'll feel more comfortable risking failure. Be transparent with them, support their ideas and never punish creativity.

Drucker's management theory embodies many modern concepts, including the following:

1. Decentralization: Rosenstein said Drucker was focused on decentralizing – or democratizing – management in the workplace. He wanted all employees to feel valued and empowered, as if their contributions and voices mattered. He believed in assigning tasks that inspire workers, rewarding front-line workers with responsibility and accountability, and uniting supervisors and their subordinates to achieve shared organizational goals.
2. Knowledge work: Knowledge workers are white-collar employees whose jobs require handling or using information, such as engineers and analysts. Drucker – who foresaw the knowledge-based economy years before the rise of computing and the internet – placed high value on workers who solved problems and thought creatively, according to Rosenstein. He wanted to foster a culture of employees who could provide not just labor, but also insight and ideas.
3. Workforce development: Drucker felt strongly that managers should improve and develop both themselves and their team members, according to Rosenstein, who said that ongoing training and education are hallmarks of Drucker's philosophy. He believed external development – via participation in industry trade groups and conferences, for example – to be especially valuable.
4. Corporate social responsibility: Rosenstein said Drucker was a holistic thinker. Instead of looking at businesses as discrete entities, he looked at them as components of a larger social system. In that context, he argued that businesses should see themselves as part of a community and make decisions in that regard – with as much respect for their external as for their internal impact. Drucker even viewed profits through a social lens: A company has a responsibility to be profitable, he argued, so that it can create jobs and wealth for society at large.
5. Organizational culture: Be they positive or negative, helpful or harmful, companies have always had cultures. But Drucker was among the first to suggest that managers could – and should – shape them. "The spirit of an organization is created from the top," he said in his book Management: Tasks, Responsibilities, Practices. "If an organization is great in spirit, it is because the spirit of its top people is great. If it decays, it does so because the top rots … No one should ever be appointed to a senior position unless top management is willing to have his or her character serve as a model for subordinates."
6. Customer experience: According to the Drucker Society of Austria, steward of Drucker's philosophy in his native country, Drucker insisted that businesses have only one real purpose: to create customers. By viewing business operations and opportunities through that lens – the customer, not the business, decides what's important – he established a predicate for customer-focused companies like Apple, Zappos and countless others.