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Management is a vital aspect of the economic life of man, which is an organized group
activity. A central directing and controlling agency is indispensable for a business concern. The
productive resources – material, labour, capital etc. are entrusted to the organizing skill,
administrative ability and enterprising initiative of the management. Thus, management provides
leadership to a business enterprise. Without able managers and effective managerial leadership, the
resources of production remain merely resources and never become production. Under competitive
economy and ever-changing environment, the quality and performance of managers determine both
the survival as well as success o any business enterprise. Management occupies such an important
place in the modern world that the welfare of the people and the destiny of the country are very
much influenced by it.
DEFINITIONS OF MANAGEMENT:
According to Lawrence A Appley - "Management is the development of people and not the
direction of things".
According to Joseph Massie - "Management is defined as the process by which a
cooperative group directs action towards common goals".
In the words of George R Terry - "Management is a distinct process consisting of planning,
organising, actuating and controlling performed to determine and accomplish the objectives
by the use of people and resources".
According to James L Lundy - "Management is principally the task of planning, coordinating,
motivating and controlling the efforts of others towards a specific objective".
In the words of Henry Fayol - "To manage is to forecast and to plan, to organise, to
command, to co-ordinate and to control".
Managerial Functions
The four principal functions or duties of management are planning, organizing, leading, and
controlling an organization’s human, financial, material, and other resources to increase its
effectiveness. And, as our previous examples show, managers who are knowledgeable about OB are
in a good position to improve their ability to perform these functions
One of the first, and most widely quoted, analyses is that given by Henri Fayol, who divided the
activities of industrial undertakings into six groups:
The managerial activity is divided into five elements of management, which are defined as: ‘to
forecast and plan, to organize, to command, to co-ordinate and to control’. Fayol describes these
elements as:
Planning
ORGANIZING
PLANNING
Establish the rules and
(translated from the
Decide on organizational
reporting relationships French prevoyer = to
goals and allocate and
that allow people to
use resources to achieve
achieve organizational foresee, and taken to
those goals
goals
include forecasting)–
examining the future,
deciding what needs to
be achieved and
CONTROLLING
LEADING
Evaluate how well the
Encourage and
developing a plan of
organization is achieving
coordinate individuals action.
its goals and take action
and groups so that they
to maintain and improve
performance or take
work toward Organizing–
organizational goals
corrective action
providing the material
and human resources and building the structure to carry out the activities of the
organization.
Command – maintaining activity among personnel, getting the optimum return from all
employees in the interests of the whole organization.
Co-ordination – unifying and harmonizing all activities and effort of the organization to
facilitate its working and success.
Control – verifying that everything occurs in accordance with plans, instructions, established
principles and expressed command.
PRINCIPLES OF MANAGEMENT
Fayol also suggests that a set of well-established principles would help concentrate general
discussion on management theory. He emphasizes, however, that these principles must be
flexible and adaptable to changing circumstances. Fayol recognized that there was no limit
to the principles of management but in his writing advocated 14 of them.
Division of work. The object is to produce more and better work from the same
effort, and the advantages of specialization. However, there are limits to division of
work which experience and a sense of proportion tell us should not be exceeded.
Authority and responsibility. Responsibility is the corollary of authority. Wherever
authority is exercised responsibility arises. The application of sanctions is essential to
good management, and is needed to encourage useful actions and to discourage
their opposite. The best safeguard against abuse of authority is the personal integrity
of the manager.
Discipline is essential for the efficient operation of the organization. Discipline is in
essence the outward mark of respect for agreements between the organization and
its members. The manager must decide on the most appropriate form of sanction in
cases of offences against discipline.
Unity of command. In any action an employee should receive orders from one
superior only; if not, authority is undermined and discipline, order and stability
threatened. Dual command is a perpetual source of conflicts.
Unity of direction. In order to provide for unity of action, co-ordination and focusing
of effort, there should be one head and one plan for any group of activities with the
same objective.
Subordination of individual interest to general interest. The interest of the
organization should dominate individual or group interests.
Remuneration of personnel. Remuneration should as far as possible satisfy both
employee and employer. Methods of payment can influence organizational
performance and the method should be fair and should encourage keenness by
rewarding well directed effort, but not lead to overpayment.
Centralization is always present to some extent in any organization. The degree of
centralization is a question of proportion and will vary in particular organizations.
Scalar chain. The chain of superiors from the ultimate authority to the lowest ranks.
Respect for line authority must be reconciled with activities which require urgent
action, and with the need to provide for some measure of initiative at all levels of
authority.
Order. This includes material order and social order. The object of material order is
avoidance of loss. There should be an appointed place for each thing, and each thing
in its appointed place. Social order involves an appointed place for each employee,
and each employee in his or her appointed place. Social order requires good
organization and good selection.
Equity. The desire for equity and for equality of treatment are aspirations to be
taken into account in dealing with employees throughout all levels of the scalar
chain.
Stability of tenure of personnel. Generally, prosperous organizations have stable
managerial personnel, but changes of personnel are inevitable and stability of tenure
is a question of proportion.
Initiative. This represents a source of strength for the organization and should been
couraged and developed. Tact and integrity are required to promote initiative and to
retain respect for authority and discipline.
Esprit de corps should be fostered, as harmony and unity among members of the
organization is a great strength in the organization. The principle of unity of
command should be observed. It is necessary to avoid the dangers of divide and rule
of one’s own team, and the abuse of written communication. Wherever possible
verbal contacts should be used.
A number of these principles relate directly to, or are influenced by, the organization
structure in which the process of management takes place.
The application of theory brings about change in actual behaviour. Managers reading the work of
leading writers on the subject might see in their ideas and conclusions a message about how they
should behave. This will influence their attitudes towards management practice.
DEVELOPMENTS IN MANAGEMENT
However, the systematic development of management thinking is viewed, generally, as dating from
the end of the nineteenth century with the emergence of large industrial organizations and the
ensuing problems associated with their structure and management. In order to help identify main
trends in the development of management theory, it is usual to categories the work of writers into
various ‘approaches’, based on their views of organizations, their structure and management.
Although a rather simplistic process, it does provide a framework in which to help direct study and
focus attention on the progression of ideas concerned with improving organizational performance.
Research studies have also expressed doubt about the effectiveness of these principles
when applied in practice. However, the classical approach prompted the start of a more
systematic view of management and attempted to provide some common principles
applicable to all organisations. These principles are still of relevance in that they offer a
useful starting point in attempting to analyse the effectiveness of the design of organisation
structure.
The application of these principles must take full account of:
SCIENTIFIC MANAGEMENT
Many of the classical writers were concerned with the improvement of management as a
means of increasing productivity. At this time emphasis was on the problem of obtaining
increased productivity from individual workers through the technical structuring of the work
organisation and the provision of monetary incentives as the motivator for higher levels of
output. A major contributor to this approach was F. W. Taylor (1856–1917), the ‘father’ of
scientific management. Taylor believed that in the same way that there is a best machine for
each job, so there is a best working method by which people should undertake their jobs.
He considered that all work processes could be analysed into discrete tasks and that by
scientific method it was possible to find the ‘one best way’ to perform each task. Each job
was broken down into component parts, each part timed and the parts rearranged into the
most efficient method of working.
Principles to guide management
Taylor was a believer in the rational–economic needs concept of motivation. He believed
that if management acted on his ideas, work would become more satisfying and profitable
for all concerned. Workers would be motivated by obtaining the highest possible wages
through working in the most efficient and productive way. Taylor was concerned with
finding more efficient methods and procedures for co-ordination and control of work. He
set out a number of principles to guide management. These principles are usually
summarised as:
1. The development of a true science for each person’s work;
2. The scientific selection, training and development of the workers;
3. Co-operation with the workers to ensure work is carried out in the prescribed way;
4. The division of work and responsibility between management and the workers.
Meaning of "System": The word system is derived from the Greek word meaning to bring
together or to combine. A system is a set of interconnected and inter-related elements or
component parts to achieve certain goals. A system has three significant parts:
1. Every system is goal-oriented and it must have a purpose or objective to be attained.
2. In designing the system we must establish the necessary arrangement of
components.
3. Inputs of information, material and energy are allocated for processing as per plan so
that the outputs can achieve the objective of the system.
Contingency Theory: Systems approach emphasizes that all sub- systems of an organization
along with the super system of environment are interconnected and interrelated.
Contingency approach analysis and understands these interrelationship so that managerial
actions can be adjusted to demands of specific situations or circumstances. Thus the
contingency approach enables us to evolve practical answers to problems demanding
solutions. Organization design and managerial actions most appropriate to specific
situations will have to be adopted to achieve the best possible result under the given
situation. There is no one best way (as advocated by Taylor) to organize and manage. Thus,
Contingency Approach to management emphasizes the fact that management is a highly
practice-oriented discipline. It is the basic function of managers to analyse and understand
the environments in which they function before adopting their techniques, processes and