UNIT-1 PRINCIPLE OF MANAGEMENT

MEANING OF MANAGEMENT
1. “Management is the art of “knowing what you want to do” and then seeing that it is done in the best
and cheapest way. F. W. Taylor

2. Management as a process “consisting of planning, organizing, actuating and controlling, performed

to determine and accomplish the objective by the use of people and resources.” George R. Terry

3. "To manage is to forecast and plan, to organise, to command, to co-ordinate and to control." Henry
Fayol

4. "Management is the art of getting things done through and with the people in formally organised
groups." Horold Kanontz

5. "Management is simply the process of decision making and control over the action of human
beings for the express purpose of attaining pre-determined goals."
- Stanley Vance

CONCEPT OF MANAGEMENT
Resources are very limited in supply. All resources are to be managed by human. However, human
have unlimited wants. Therefore, there are limited resources and unlimited wants and desire.
Complete satisfaction is very necessary for better functioning of every aspect of the society. Therefore,
for complete satisfaction in life resources are to be managed properly in such a way that human
achieve complete utility and benefit simultaneously. Thus, to manage all resources available in such a
way that it gives complete satisfaction to human beings is the theoretical meaning of management.

• People learn business management automatically even before knowing what ‘Management’ is-
Peter Drucker
• To many people management is synonymous with business management
• But business management is only a part of management
• Management is an important element in every organization. It is the element that coordinates
currents organizational activities and plans for the future.

5 BASIC CONCEPT OF MANAGEMENT

1. Functional concept

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Management basically is the task of planning, coordinating, motivating and controlling the efforts of
other towards the goals and objectives of the organization. According to this concept, management is
what a manager does (planning, executing, and controlling)
2. Human relation concept
According to this concept, Management is the art o getting things done through and with people in
organized groups. It is the art of creating an environment in which people can perform and individuals
could cooperate towards attaining of group goals. It is an art of removing blanks to such performance
a way of optimizing efficiency in reaching goals.
3. Leadership and decision making concept
According to this concept, management is the art and science of preparing, organizing, directing
human efforts applied to control the forces and utilize the materials of nature for the benefits to man.
4. Productive concept
According to this concept, management may be defined as the art of securing maximum prosperity
with a minimum effort so as to secure maximum prosperity and happiness for both employer n
employee and provide best services thereby.
3. Integration concept
• According to this concept, management is the coordination of human and material resources
towards the achievement of organizational objectives as well as the organization of the
productive functions essential for achieving stated or accepted economic goal.
• These above definition of management, given by different writers and authorities, are found
giving different senses. Virtually, the five concepts are found developed by the authorities
emphasizing in different aspects. However, it has been realized by many that it will not be fair
to define management based upon any one aspect. Management can be taken as process-
managerial process or social process either engage in planning, organizing, staffing, directing
and controlling or mobilizing the group activities to achieve the corporate goals.

To overcome the limitations of the above concepts, Theo Haimann, the leading management expert
has explained three basic concepts of management as under:

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. Management as a process:-
Management is a process. It includes the process of planning, controlling, coordinating, motivating,
and staffing. These processes are the series of interrelated sequential functions. Processes refer to
accomplish these mentioned activities. Management is the efforts of organizational members to
accomplish the organizer’s objectives. This concept is very simple because
i. It is very simple and very easy to understand
ii. It indicates functions of management as a process
iii. It recognizes management as a universal process
b. Management as a discipline
the term management is used as a subject of instructions. It is a specific branch of knowledge which is
studied in campuses and schools like economics, sociology, mathematics, political science etc. the
scholars of management have found that the information and management are used in practical life for
better functioning. The scope of managenent is being increased day to day as a discipline

c. Management as a noun:
The word management itself refers as a noun. There are many kinds of employees in an organization .
some people are involved in managerial function and some are involved in operating functions. The
individuals who manage the organization and departments are managers. As a noun, the term
management is used as single name of managers, board of directors, managing directors,
departmental managers etc are included in management.
Thus, theo haiman the leading management expert expiained the meaning and concept of
management.

Nature and Characteristics of Management

The salient features which highlight the nature of management are as

follows:
(i) Management is goal-oriented: Management is not an end in itself. It is a means to
achieve certain goals. Management has no justification to exist without goals. Management
goals are called group goals or organisational goals. The basic goal of management is to
ensure efficiency and economy in the utilisation of human, physical and financial resources.
The success of management is measured by the extent to which the established goals one
achieved. Thus, management is purposeful.
(ii) Management is universal: Management is an essential element of every organised
activity irrespective of the size or type of activity. Wherever two or more persons are
engaged in working for a common goal, management is necessary. All types of
organisations, e.g., family, club, university, government, army, cricket team or business,
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require management. Thus, management is a pervasive activity. The fundamental

principles of management are applicable in all areas of organised effort. Managers at all
levels perform the same basic functions.
(iii) Management is an Integrative Force: The essence of management lies in the
coordination of individual efforts in to a team. Man- agement reconciles the individual goals
with organizational goals. As unifying force, management creates a whole that is more than
the sum of individual parts. It integrates human and other resources.
(iv) Management is a Social Process: Management is done by people, through people and
for people. It is a social process because it is concerned with interpersonal relations.
Human factor is the most important element in management. According to Appley, “Man-
agement is the development of people not the direction of things. A good manager is a
leader not a boss. It is the pervasiveness of human element which gives management its
special character as a social process”.
(v) Management is multidisciplinary: Management has to deal with human behaviour under
dynamic conditions. Therefore, it depends upon wide knowledge derived from several
disciplines like engineering, sociology, psychology, economics, anthropology, etc. The vast
body of knowledge in management draws heavily upon other fields of study.
(vi) Management is a continuous Process: Management is a dynamicand an on-going
process. The cycle of management continues to operate so long as there is organised
action for the achievement of group goals.
(vii) Management is Intangible: Management is an unseen or invisible force. It cannot be seen
but its presence can be felt everywhere in the form of results. However, the managers who
perform the functions of management are very much tangible and visible.
(viii) Management is an Art as well as Science: It contains a systematic body of theoretical
knowledge and it also involves the practical application of such knowledge. Management is
also a discipline involving specialised training and an ethical code arising out of its social
obligations.
On the basis of these characteristics, management may be defined as a continuous social process
involving the coordination of human and material resources in order to accomplish desired objectives.
It involves both the determination and the accomplishment of organisa-
tional goals.

EVOLUTION OF MANAGEMENT THOUGHT

Evolution of Management Thoughts

Management is studied in business academics since earlier times and it is considered as an integral
part to understand business operations. People have been changing and redesigning organizations for
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centuries. Though the 20th century is noticeable in history as an 'Era of scientific management', still it
does not indicate that management tactics were not used in yester years. Many studies indicated that
Management theory evolved with "scientific" and "bureaucratic" management that used measurement,
procedures and routines as the basis for operations. Firms developed hierarchies to apply
standardized rules to the place of work and penalized labour for violating rules. With the "human
relations" movement, companies emphasized individual workers. Modern management theories,
including system theory, contingency theory and chaos theory, focus on the whole organization, with
employees as a key part of the system.
The evaluation of management can be categorized in to different parts:
 Pre-Scientific Management Era (before 1880),
 Classical management Era (1880-1930),
 Neo-classical Management Era (1930-1950),
 Modern Management era (1950-on word).

Classical Management includes Scientific Management School, Administration Management School,

and Bureaucracy Management.
Neo- classical Management includes Human relation school and Behavioural Management School.
Modern Management includes Social system school, Quantitative Management School, System
Management School, and Contingency Management School.

Early Management Thought

Earlier period emphasizes the industrial revolution and the factory system highlights the industrial
revolution and the importance of direction as a managerial purpose. Thus, the development of
management theory can be recognized as the way people have struggled with relationships at
particular times in olden periods.

The Classical Approach

The classical approach is the earliest thought of management .The classical approach was associated
with the ways to manage work and organizations more efficiently. The classical approach are
categorized into three groups namely, scientific management, administrative management, and
bureaucratic management.

I. Scientific Management: Scientific management which is also referred to Taylorism or

the Taylor system is a theory of management that evaluates and synthesizes workflows,
with the aim of improving labour productivity. In other words, conventional rules of thumb
are substituted by accurate procedures developed after careful study of an individual at
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work. Universal approaches of Scientific management are developed for Efficiency of

workers, Standardization of job roles/activities and Discipline - the role of managers and the
business hierarchy. The scientific management theory had an enormous impact on the
business industry at the beginning of the 20th century. Many big and victorious
organizations, such as McDonalds hamburger chain or call centres, utilised a modern
version of scientific management.
Among famous theorist, Taylor's contribution in the area of scientific management is
invaluable. The components of scientific management are determination of the task,
planning, proper selection and training of workers improvement in methods, modification of
organization and mental revolution such as 'job specialization'. As a result, it became more
concerned with physical things than towards the people even though increased the output.
Scientific Management focuses on worker and machine relationships. Organizational
productivity can be increased by enhancing the competence of production processes. The
competence viewpoint is concerned with creating job that economizes on time, human
energy, and other productive resources. Jobs are planned so that each worker has a
specified, well controlled task that can be performed as instructed. Principle of scientific
management are replacement of old rule of thumb method, scientific selecting and training,
labour management co-operation, maximizes output, equal division of responsibility. There
are four scientific management systems such as develop a science for each element of the
job to replace old rule of thumb method, Scientifically select employees and then train them
to do the job as described in step, supervise employees to make sure they follow the
prescribed method for performing their job and continue to plan the work but use worker to
actually get the work done.

EVOLUTION :

In the earlier days of the industrial Revolution , in the absence of an established theory of factory
organisation , factory owners or managers relied on the personal judgement in attending to the
problems they confronted in the course of managing their work .
This is referred to as "RULE OF THUMB "

Managing factories by rule of thumb enabled them to handle situations as they arose but suffered from
the limitation of trial and error approach .

For their experiences to be emulated , it was important to know what works and why does it work . For
this , there was a need to follow an approach that was based on the method of science - defining a
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problem , developing alternative solutions , anticipating consequences , measuring progress and

drawing conclusions .

In this scenario , Taylor proposed scientific management as opposed to rule of thumb and emerged as
the " Father of scientific management ."

principles of scientific management :

there are 4 principles by taylor :

(1) science not rule of thumb:

--This principle says that we should not get stuck in a set routine with the old techniques of doing work,
rather we should be constantly experimenting to develop new techniques which make the work much
simpler, easier and quicker.

--Taylor believed that there was one best method to maximise efficiency and that even a small
production activity like loading pigs of iron into boxcars can be scientifically planned and managed .

--This method involved investigation of traditional methods through work-study , unifying the best
practices and developing a standard method , which would be followed throughout the organization.
(2) harmony , not discord:

--as per this principle, such an atmosphere should be created in the organisation that labour (the major
factor of production) and management consider each other indispensable.

--There should be complete harmony between the managers and the workers .

--Taylor has referred to such a situation as a ‘Mental Revolution’ and firmly believed that the
occurrence of a mental revolution would end all conflicts between the two parties and would be
beneficial to both of them.

-- Management should share the gains of the company and at the same time workers must work hard
to change the company for good .
example :
In Japanese companies paternalistic style of management is in practice . There is a complete
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openness between management and workers . If at all the workers go for a strike they wear a black
badge but work more than normal working hours to gain the sympathy of management .

(3) cooperation, not individualism :

--According to this principle, all the activities done by different people must be carried on with a spirit of
mutual cooperation.

--Competition should be replaced by Cooperation.

--Taylor has suggested that the manager and the workers should jointly determine standards. This
increases involvement and thus, in turn, increases responsibility. In this way we can expect miraculous
results.

--This can be achieved by :

 Rewarding the employees for their suggestions .
 Workers not going on unnecessary strikes and making unreasonable demands.
 Open communication between management and all staff .
 Equal division of work and responsibility between workers and management .

(4) development of each and every person to his or her greatest efficiency and prosperity :

--According to this principle, the efficiency of each and every person should be taken care of right from
his selection.

--A proper arrangement of everybody’s training should be made.

--It should also be taken care that each individual should be allotted work according to his ability and
interest. Such a caring attitude would create a sense of enthusiasm among the employees and a
feeling of belongingness too.

Techniques of scientific management :

there are 7 techniques of scientific management :

1. Functional foremanship-

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Foreman represents the managerial figure with whom the workers are in face to face contact on a
daily basis .
Functional Foremanship is an extension of the principal of Division of Work or specialisation to the
shop floor.

Taylor advocated separation of planning and execution functions.

Under planning the following activities took place by the 4 personnel--

1. The personnel would draft instructions for workers- Instruction card clerk
2. Specify the route of production- Route clerk .
3. Prepare time and cost sheet - Time and cost clerk .
4. Ensure discipline- Disciplinarian .

Production function would ensure :

1. Timely and accurate completion of job- Speed boss .
2. Keeping machines and tools ready for operation by worker- Gang boss .
3. Ensure proper working conditions of machines and tools- Repair boss .
4. Check quality of work -Inspectors .

Foremen should have intelligence ,education, tact , grit , judgement ,special knowledge, manual
dexterity and energy,honesty , good health .

Since all these qualities cannot be found in a single person so Taylor proposed eight specialists.

2. Standardisation and simplification of work-

Standardization refers to the process of setting standards for every business activity . It is a means of
achieving economics of production .

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It implies the physical attitude of products should be such that it meets the requirements & needs of
customers.

Taylor advocated that tools & equipments as well as working conditions should be standardized to
achieve standard output from workers.

The OBJECTIVES OF Standarisation are :

1 .To reduce the given line or product to fixed and predetermined type, form, design, size, weight,
quality etc .

2. To ensure the manufacture of identical parts and components.

3. To ensure that the quality & standards of excellence have been maintained.

4. Standard of performance are established for all workers and machines at all levels.

Simplification is method of eliminating unnecessary diversity of products . It results in saving of cost

of labour , machines , tools etc .

Simplification aims at eliminating extra varieties , sizes and dimensions , sizes while standardisation
implies devising new varities instead of existing one.

3. Method study-
This technique determines the best way of doing the job .

There are various methods of doin the job .

To determine the best way there are several parameters . Right from the procurement of the product
to the final delivery of product to the customer every activity is a part of method study .

The objective of method study is to minimise the cost of production and maximise thr quality and
satisfaction of the customer .

Examples of method study are :

Operations Research and
Assembly lines : Process Charts :
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4. Motion study-

In this study, movement of body and limbs required to perform a job are closely observed.
In other words, it refers to the study of movement of an operator on machine involved in a particular
task.

The purpose of motion study is to eliminate useless motions and determine the bet way of doing the
job.

By undertaking motion study an attempt is made to know whether some elements of a job can be
eliminated combined or their sequence can be changed to achieve necessary rhythm.

Motion study increases the efficiency and productivity of workers by cutting down all wasteful motions.
example :
It is possible to find out :
Motions that are productive .
Motions which are incidental ( going to stores ) .
Motions which are unproductive .
Taylor used stopwatches and various symbols and colours to identify different motions .

5. Time study-
It is a technique which enables the manager to ascertain standard time taken for performing a
specified job. Every job or every part of it is studied in detail.

This technique is based on the study of an average worker having reasonable skill and ability.

Average worker is selected and assigned the job and then with the help of a stop watch, time is
ascertained for performing that particular job.

Taylor maintained that Fair day’s work should be determined through observations, experiment and
analysis by keeping in view an average worker.

Standard Time × Working Hours = Fair Day’s Work

example :
On the basis of several observations it is determined that standard time taken by the worker to make
one cardboard box is 20 minutes. So in 1 hour he / she will make 3 boxes.
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Assuming that a worker has to put in 8 hours of work in a shift and deducting one hour for rest and
lunch , it is determined that in 7 hours a worker makes 21 boxes @ 3 per hour . This is the standard
work a worker has to do .

6. Fatigue study-

A person is bound to feel tired physically and mentally if he / she does not rest while working .
The rest intervals will help one to regain stamina and work again with the same capacity . This will
result in increased productivity .
Fatigue study seeks to determine the amount and frequency of rest intervals in completing a task .
example:
A plant , work takes place in 3 shifts of 8 hours each .Even in a single shift a worker has to be given
some rest interval for their lunch and some other small pauses from the work .

7. Differential piece wage system -

This technique of wage payment is based on efficiency of worker. The efficient workers are paid more
wages than inefficient one.

On the other hand, those workers who produce less than standard number of pieces are paid wages
at lower rate than prevailing rate i.e. worker is penalized for his inefficiency.
This system is a source of incentive to workers who improving their efficiency in order to get more
wages.
It also encourages inefficient workers to improve their performance and achieve their standards.
It leads to mass production which minimizes cost and maximizes profits.

ADMINISTRATIVE PRINCIPLE

(ii) Administrative Management: Administrative Management emphasizes the manager and the
functions of management. The main objective of Administrative management is to describe the
management process and philosophy of management. In contradiction of scientific management,
which deals mainly with jobs and work at individual level of scrutiny, administrative management gives
a more universal theory of management.

Henry Fayol's Administrative Management (1841–1925): Henri fayol is known as the father of
modern Management. He was popular industrialist and victorious manager. Fayol considered that
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good management practice falls into certain patterns that can be recognized and analysed. From this
basic perspective, he devised a blueprint for a consistent policy of managers one that retains much of
its force to this day. Fayol provided a broad analytical framework of the process of management. He
used the word Administration for Management. Foyal categorized activities of business enterprise into
six groups such as Technical, Financial, Accounting, Security, and Administrative or Managerial. He
stressed constantly that these managerial functions are the same at every level of an organization and
is common to all firms. He wrote General and Industrial Management. His five function of managers
were plan, organize, command, co-ordinate, and control. Principal of administrative management:
1.Division of labour, 2.Authority & responsibility, 3.Discipline, 4.Unity of command, 5.Unity of direction,
6.Subordination of individual interests to general interest, 7.Remuneration of personnel,
8.Centralization, 9.Scalar chain, 10.Order, 11.Equity, 12.Stability of tenure, 13.Initiative and14 .Esprit
de corps (union of strength). These 14 principles of management serve as general guidelines to the
management process and management practice. His principles of management are described below.

1. Division of work: This is the principle of specialization which is detailed by economists as an

important to efficiency in the utilization of labour. Fayol goes beyond shop labour to apply the
principle to all kinds of work, managerial as well as technical.

2. Authority and responsibility: In this principle, Fayol discovers authority and responsibility to be
linked with the letter, the consequence of the former and arising from the latter.

3. Discipline: This discipline denotes "respect for agreements which are directed at achieving
obedience, application, energy and the outward marks of respect". Fayol declares that
discipline requires good superiors at all levels, clear and fair agreement, and judicious
application of penalties.

4. Unity of command: This is the principle that an employee should receive orders from one
superior only.

5. Unity of direction: Fayol asserted that unity of direction is the principle that each group of
activities having the same objective must have one head and one plan. As distinguished from
the principle of unity of command, Fayol observes unity of direction as related to the functioning
of personnel.

6. Subordination of individual interest to general interest: In any group the interest of the group
should supersede that of the individual. When these are found to differ, it is the function of
management to reconcile them.
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7. Remuneration of personnel: Fayol recognizes that salary and methods of payment should be
fair and give the utmost satisfaction to worker and boss.

8. Centralization: Fayol principle of centralization refers to the extent to which authority is

concentrated or dispersed in an enterprise. Individual circumstances will determine the degree
of centralization that will give the best overall yield.

9. Scalar chair: Fayol believe of the scalar chair as a line of authority, a 'Chain of Superiors" from
the highest to the lowest ranks and held that, while it is an error of subordinate to depart
'needlessly' from lines of authority, the chain should be short-circuited when scrupulous
following of it would be detrimental.

10. Order: Breaking this principle into 'Material order' and 'Social Order', Fayol thinks of it as the
simple edge of "a place for everything (everyone), and everything (everyone) in its (his) place".
This is basically a principle of organization in the arrangement of things and persons.

11. Equity: Fayol perceives this principle as one of eliciting loyalty and devotion from personnel by
a combination of kindliness and justice in managers dealing with subordinates.

12. Stability of tenure of personnel: Finding that such instability is both the cause and effect of bad
management, Fayol indicated the dangers and costs of unnecessary turnover.

13. Initiative: Initiative is envisaged as the thinking out and execution of a plan. Since it is one of
the "Keenest satisfactions for an intelligent man to experience", Fayol exhorts managers to
"Sacrifice Personal Vanity" in order to permit subordinates to exercise it.

14. Esprit de corps: This is the principle that 'union is strength' an extension of the principle of unity
of command. Fayol here emphasizes the need for teamwork and the importance of
communication in obtaining it.

(iii) Bureaucratic Management:.

Bureaucratic management denotes to the perfect type of organization. Principal of Bureaucracy

include clearly defined and specialized functions, use of legal authority, hierarchical form, written rules
and procedures, technically trained bureaucrats, appointment to positions based on technical
expertise, promotions based on competence and clearly defined career paths. The German
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sociologist, Max Weber recognized as father of modern Sociology who appraised bureaucracy as the
most logical and structure for big organization. With his observation in business world, Weber
summarized that earlier business firms were unproductively managed, with decisions based on
personal relationships and faithfulness. He proposed that a form of organization, called a bureaucracy,
characterized by division of labour, hierarchy, formalized rules, impersonality, and the selection and
promotion of employees based on ability, would lead to more well-organized management. Weber also
argued that authoritative position of managers in an organization should be based not on tradition or
personality but on the position held by managers in the organizational hierarchy.

Max Weber (1864-1920) devised a theory of bureaucratic management that emphasized the need for
a firmly defined hierarchy governed by clearly defined regulations and lines of authority. He considered
the perfect organization to be a bureaucracy whose activities and objectives were reasonably thought
out and whose divisions of labour were clearly defined. Weber also believed that technical capability
should be emphasized and that performance evaluations should be made completely on the basis of
merit. Presently, it is considered that bureaucracies are huge, impersonal organizations that put
impersonal competence ahead of human needs. Like the scientific management theorists, Weber
sought to advance the performance of socially important organizations by making their operations
predictable and productive. Although we now value innovation and flexibility as much as efficiency and
predictability, Weber's model of bureaucratic management evidently advanced the development of
vast corporations such as Ford. Bureaucracy was a particular pattern of relationships for which Weber
saw great promise. Although bureaucracy has been successful for many companies, in the
competitive global market of the 1990s organizations such as General Electric and Xerox have
adopted bureaucracy, throwing away the organization chart and replacing it with ever-changing
constellations of teams, projects, and alliances with the goal of unleashing employee creativeness.

NEO CLASSICAL APPROACH

Behavioural Approach: Numerous theorists developed the behavioural approach of management

thought as they observed weaknesses in the assumptions of the classical approach. The classical
approach emphasized efficiency, process, and principles. Some management scholars considered
that this thought ignored important aspects of organizational life, particularly as it related to human
behaviour. Therefore the behavioural approach concentrated on the understanding of the factors that
affect human behaviour at work. This is an improved and more matured description of human relations
approach. The various theorists who have great contribution in developing principles of management
in this are Douglas Mc Gregor, Abraham Maslow, Curt Levin, Mary Porker Follelt, Rensis Likert.
Behavioural Scientists hold the classical approach as highly mechanistic, which finds to degrade the

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human spirit. They choose more flexible organization structures and jobs built around the capabilities
and talent of average employees. The behavioural approach has based the numerous principles.
1. Decision-making is done in a sub-optimal manner, because of practical and situational
constraints on human rationality of decision-making. The behaviourists attach great weight age
on participative and group decision-making.
2. Behavioural Scientists promote self-direction and control instead of imposed control.
3. Behavioural Scientists believe the organization as a group of individuals with certain goals.
4. Behavioural scientists perceive that the democratic-participative styles of leadership are
enviable, the autocratic, task oriented styles may also be appropriate in certain situation.
5. Behavioural scientists propose that different people react differently to the same situation. No
two people are exactly similar and manager should tailor his attempts to influence his people
according to their needs.
6. Behavioural scientists identify that organizational variance and change are predictable.

Human Relations Approach: The human rationalists which is also denotes to neo-classicists,
focused as human aspect of business. These theorists emphasize that organization is a social system
and the human factor is the most vital element within it.

There are numerous basic principles of the human relations approach that are mentioned below:

1. Decentralization: The concept of hierarchy employed by classical management theorists is

replaced with the idea that individual workers and functional areas (i.e., departments) should
be given greater autonomy and decision-making power. This needs greater emphasis on
lateral communication so that coordination of efforts and resources can occur. This
communication occurs via informal communication channels rather than the formal, hierarchical
ones.

2. Participatory Decision-Making: Decision-making is participatory in the sense that those making

decisions on a day-to-day basis include line workers not normally considered to be
"management." The greater sovereignty afforded individual employees and the subsequent
reduction in "height" and increase in span of control of the organizational structure requires that
they have the knowledge and ability to make their own decisions and the communication skill to
coordinate their efforts with others without a nearby supervisor.

3. Concern for Developing Self-Motivated Employees: The importance on a system of

decentralized and autonomous decision-making by members of the organization necessitates
that those members be extremely "self-motivated". Goal of managers in such an organization is
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to design and implement organizational structures that reward such self-motivation and
autonomy. Another is to negotiate working relationships with subordinates that foster effective
communication in both directions.
4.
Therefore, the human relations approach implies modifications in the structure of the organization
itself, in the nature of work, and in the association between manager and assistant. Each of these
changes depends upon assumptions about the individual, the organization, and communication, just
like any other theory of organizations. Elton Mayo and others conducted experiments that was known
as Hawthorne experiments and explored informal groupings, informal relationships, patterns of
communication, and patterns of internal leadership. Elton Mayo is usually popular as father of Human
Relations School. The human relationists, advocates the several factors after conducting Hawthorne
experiments which are mentioned below.

1. Social system: The organization in general is a social system consists of numerous interacting
parts. The social system established individual roles and establishes norms that may differ
from those of formal organization.
2. Social environment: The social climate of the job affects the workers and is also affected.
3. Informal organization: The informal organization does also exist within the frame work of formal
organization and it affects and is affected by the formal organization.
4. Group dynamics: At the place of work, the workers often do not act or react as individuals but
as members of group. The group plays an important role in determining the attitudes and
performance of individual workers.
5. Informal leader: There is an appearance of informal leadership as against formal leadership
and the informal leader sets and enforces group norms.
6. Non-economic reward: Money is an encouraging element but not the only motivator of human
behaviour. Man is diversely motivated and socio psychological factors act as important
motivators.

MODERN APPROACH

Contingency Approach: This approach of management thought focuses on management principles

and concepts that have no general and universal application under all conditions. Joan Woodward in
the 1950s has contributed to develop this approach in management. Contingency school states that
management is situational and the study of management recognize the important variables in the
situation. It distinguishes that all the subsystem of the environment are interconnected and
interrelated. By studying their interrelationship, the management can find resolution to specific
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 UNIT-1 PRINCIPLE OF MANAGEMENT

situation. Theorists stated that there is not effective way of doing things under all business conditions.
Methods and techniques which are extremely effective in one situation may not give the same results
in another situation. This approach proposes that the role of managers is to recognize best technique
in particular situation to accomplish business goals. Managers have to develop situational
understanding and practical selectivity. Contingency visions are applicable in developing
organizational structure, in deciding degree of decentralization, in motivation and leadership approach,
in establishing communication and control systems, in managing conflicts and in employee
development and training. The contingency approach is associated with applying management
principles and processes as dictated by the sole characteristics of each situation. It depends on
various situational factors, such as the external environment, technology, organizational
characteristics, characteristics of the manager, and characteristics of the subordinates. Contingency
theorists often implicitly or explicitly disapprove the classical approach as it focuses on the universality
of management principles.

Systems Approach Of Management Thought

The systems approach deals with the thoroughly understanding the organization as an open system
that converts inputs into outputs. The systems approach has great impact on management thought in
the 1960s. During this period, thinking about managing practices allowed managers to relate different
specialties and parts of the company to one another, as well as to external environmental factors. The
system approach focuses on the organization as a whole, its communication with the environment,
and its need to achieve equilibrium.

System approach

To summarize, there are important theories of Management and each theory has distinct role to
knowledge of what managers do. Management is an interdisciplinary and global field that has been

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 UNIT-1 PRINCIPLE OF MANAGEMENT

developed in parts over the years. Numerous approaches to management theory developed that
include the universal process approach, the operational approach, the behavioural approach, the
systems approach, the contingency approach and others. F W Taylor, Adam Smith, Henry Fayol, Elton
Mayo and others have contributed to the development of Management concept. The classical
management approach had three major categories that include scientific management, administrative
theory and bureaucratic management. Scientific management highlighted the scientific study of work
methods to improve worker efficiency. Bureaucratic management dealt with the characteristics of an
perfect organization which operates on a rational basis. Administrative theory explored principles that
could be used by managers to synchronise the internal activities of organizations. The behavioral
approach emerged mainly as an outcome of the Hawthorne studies. Mary Parker Follet, Elton Mayo
and his associates, Abraham Maslow, Douglas McGregor and Chris Argyris were main players of this
school.

WHETHER MANAGEMENT IS SCIENCE OR ART

How Management both a science and an art

Like any other practice-whether engineering, accountancy, law or medicine; Management is an art.
Artistic application of management know-how is evident.

It is understood that managing is doing things artistically in the light of the realities of a situation.

But a modern manager can do better by using the knowledge, methods, concepts, theories, etc. of
managing at his/her workplace.

As a matter of fact, this knowledge, methods, concepts, theories related to managing can be treated
as science. It raises the question is management is an art or science or both.

How Management is an Art

To manage effectively, one must have not only the necessary abilities to lead but also a set of critical
skills acquired through time, experience, and practice.

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 UNIT-1 PRINCIPLE OF MANAGEMENT

The art of managing is a personal creative attribute of the manager, which is more often than not,
enriched by education, training, experience.

In fact, the art of managing involves the conception of a vision of an orderly whole created from
chaotic parts and the communication and achievement of this vision.

Managing is the “art of arts” because it organizes and uses human talent.

Elements of Art in Management

 Practical Knowledge: Art requires practical knowledge, learning of theory is not sufficient. Art
applies theory in the field. Art teaches the practical application of theoretical principles.For
example-Learning how sing does not make you a musician; one must know all composition and
be able to use them.Similarly, A person may have a degree that says he know what a manager
do but if doesn’t know how to apply management knowledge in real life situations he will not be
regarded as manager.
 Personal Skill: A manager will not depend on his theoretical knowledge or solution alone. he
or she must have some qualities that make him or her unique.
 Creativity: An Artist’s work is not limited to his practical knowledge. He thinks outside the box
and creates things extraordinary.Management is also creative in nature like any other art.
Management is all about finding a new way to be well different from other.
 Perfection through practice: Every artist becomes better through item and practice. they
learn from their mistakes. Similarly, managers become more expert as he spends more time in
management thought.
 Goal-Oriented: Art is result oriented. Management works are also goal or result oriented.
Management takes steps for the attainment of the goal.

How Management is a Science

Science is obtaining information about a particular object by a systematic pattern of observation,

study, practice, experiments and investigation.

Management process also follows the same pattern. Gathering data and facts, analyzing them and
making a decision based on analysis, are the basic functions of the management.

Management follows a systematic method to find the possible solution for a problem. It is true that the
science underlying managing is inexact or a soft science at best.

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 UNIT-1 PRINCIPLE OF MANAGEMENT

It is not as “Science” as physical sciences such as chemistry or biology which deal with non-human
entities.

The inclusion of the human element in managing makes this discipline not only complex but also
debatable as a pure science.

Human behavior is unpredictable; people think, act or react differently under identical circumstances.

And so, management can never become as pure science. However, the study of the scientific
foundations of management practice can definitely improve one’s management skills.

Managers who attempt to manage without management science have to trust their intuition or luck at
their peril rather than their expertise or skill.

Thus, they have to turn for meaningful guidance to accumulated knowledge of managing.

The Elements of Science in Managing

Science presupposes the existence of organized knowledge. The essence of science is the application
of scientific method to the development of knowledge that proceeds through the stages discussed
below:

 Concepts: Scientific approach requires a clear “concepts” of mental images of anything

formed by generalization from particulars. Managing has concepts to deal with situations.
 Methods and principles: “Scientific method” involves the determination of facts through
observation.This leads to the development of “principles” which have value in predicting what
will happen in similar circumstances. Similarly, management requires observation and sets
standard or principles according to it.
 Theories: Any branch of science has theories. A ‘theory” is a systematic grouping of
interdependent concepts and principles that give a framework to, or ties together, a significant
area of knowledge.Management studies over the years developed many proved theories for
making management more realistic or scientific.
 Organized knowledge: Science is organized Knowledge. If we compare, management at the
present day is a distinct field of organized knowledge. Concepts, methods, principles, theories
etc. are now the core of management.
 Practice: The theories of managing are the results of practice, and the role of such theories is
to provide a systematic grouping of interdependent concepts and principles that furnish a
framework to, or ties together significant pertinent management knowledge.The theories of
motivation, leadership, and so on may be cited/mentioned as examples.But it is to be borne in
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mind that concepts, methods, principles of management are not as rigid as those of the
physical sciences. They may undergo revision and change under new sociopolitical and
economic circumstances.

Management is a Science as well as Art

Science teaches us to know while art teaches us to do. In order to be successful, managers have to
know and do things effectively and efficiently. This requires a unique combination of both science and
art of managing in them.

It may, however, be said that the art of managing begins where the science of managing stops. Since
the science of managing is imperfect, the manager must turn to the artistic managerial ability to
perform a job satisfactorily.

Thus, it may be said that managing in practice is definitely an art but the body of knowledge, methods,
principles etc. underlying the practice is science.

Even some people might have a different opinion regarding this matter. But as matter of fact, the art
and science of managing are not so much conflicting as complementary.

FUNCTIONS OF MANAGEMENT

George and Jerry explained four fundamental functions of management. According to them functions
of management are planning, organizing, actuating and controlling.
POSDCORB is the key word used by Luther Gullick to explain the functions of management In
POSDCORB; P stands for planning, O for organizing, S for staffing, D for directing, Co for co-
ordination, R for reporting and B for budgeting.
Newman and Summer gave the managerial functions which include organizing, planning, reading
and measuring and controlling.
Koontz and O’Donnel explained five functions of management. They have become widely accepted
functions of management everywhere. They are planning, organizing, staffing, directing and
controlling.
Five Functions of Management
Five functions of management as explained by Koontz and O'Donnel are as follows;
 Planning,
 Organising,
 Staffing,

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 Directing and
 Controlling.

PLANNING
Planning is deciding in advance what to do and how to do.It is one of the basic managerial functions.
Before doing something, the manager must formulate an idea of how to work on a particular task.
Thus, planning is closely connected with creativity and innovation. It involves setting objectives and
developing appropriate courses of action to achieve these objectives.
Planning Definition
"Planning bridges the gap from where we are to where we want to go. It makes it possible for
things to occur which would not otherwise happen"
- Koontz and O'Donnel.
Planning Process
Setting objectives: Objectives may be set for the entire organisation and each department or unit
within the organisation.
Developing premises: Planning is concerned with the future which is uncertain and every planner is
using conjucture about what might happen in future.
Identifying alternative courses of action: Once objectives are set, assumptions are made. Then the
next step would be to act upon them.
Evaluating alternative courses: The next step is to weigh the pros and cons of each alternative.
Selecting an alternative: This is the real point of decision making. The best plan has to be adopted
and implemented.
Implement the plan: This is concerned with putting the plan into action.
Follow-up action: Monitoring the plans are equally important to ensure that objectives are achieved.
Types of Plans
Objectives: Objectives are very basic to the organisation and they are defined as ends which the
management seeks to achieve by its operations.They serve as a guide for overall business planning.
Strategy: strategy is a comprehensive plan for accomplishing an organisation objectives. This
comprehensive plan will include three dimensions,
(a) determining long term objectives,
(b) adopting a particular course of action, and
(c) allocating resources necessary to achieve the objective.
Policy: They are guides to managerial action and decisions in the implementation of strategy.
Procedure: Procedures are routine steps on how to carry out activities. Procedures are specified
steps to be followed in particular circumstances.

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 UNIT-1 PRINCIPLE OF MANAGEMENT

Method: Methods provide the prescribed ways or manner in which a task has to be performed
considering the objective. It deals with a task comprising one step of a procedure and specifies how
this step is to be performed.
Rule: Rules are specific statements that inform what is to be done. They do not allow for any flexibility
or discretion.
Programme: Programmes are detailed statements about a project which outlines the objectives,
policies, procedures, rules, tasks, human and physical resources required and the budget to
implement any course of action.
Budget: It is a plan which quantifies future facts and figures. It is a fundamental planning instrument in
many organisations.

ORGANIZING
Organising is the process of defining and grouping activities and establishing authority relationships
among them to attain organizational objectives.
Organising Definition
"Organisation is the process of identifying and grouping of the works to be performed, defining
and delegating responsibility and authority and establishing relationships for the purpose of
enabling people to work most efficiently".
- Louis A. Allen
Organising Process
Division of work: The first process of Organising includes identification and division of work which
shall be done in accordance with the plans that are determined previously.

Departmentation: once the work of identifying and dividing the work has been done those are similar
are to be grouped.

Linking departments: When the process of departmentation was completed, linking of departments
has to be done so that those departments operate in a co-ordinated manner which gives a shape to
overall organisation structure.

Assigning Duties: On completion of departmentation process assigning duties i.e. defining authority
and responsibilty to the employees on the basis of their skills and capabilities has to be done, which in
consequence magnifies efficiency with regard to their work.

Defining hierarchal structure: Each employee should also know from whom he has to take orders
and to whom he is accountable/responsible.

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 UNIT-1 PRINCIPLE OF MANAGEMENT

Organisation Structure
Organisation structure is the pattern of relationships among various components or parts of the
organisation which prescribes the relations among various activities and positions. An effective
structure will result in increased profitability of the enterprise. whenever an enterprise grows in size or
complexity it needs an adequate organisation structure.

Line Organisation Structure: Hierarchy derived from a scalar process. Organisation is quite simple in
understanding and implementation. this does not offer scope for specialization.

Line and Staff Organisation Structure: Staff personnel generally specialists in their fields advice line
managers to perform their duties. Staff personnel have right to recommend, but have no authority.

Functional Organisation: Grouping of activities on the basis of functions required for the
achievement of ultimate objectives.

Divisional Organisation Structure: Several fairly self-contained autonomous units were created.
Each unit was headed by a manager and is directly accountable to the organisation.

DIRECTING
Directing means giving instructions, guiding, counselling, motivating and leading the staff in an
organisation in doing work to achieve Organisational goals. Directing is a key managerial function to
be performed by the manager along with planning, organising, staffing and controlling. From top
executive to supervisor performs the function of directing and it takes place accordingly wherever
superior – subordinate relations exist. Directing is a continuous process initiated at top level and flows
to the bottom through organisational hierarchy.

Directing Definition
"Activating deals with the steps a manager takes to get sub-ordinates and others to carry out plans".
- Newman and Warren.
Supervision
"Guiding and directing efforts of employees and other resources to accomplish stated work outputs"
- Terry and Franklin.
Supervision is an element of direction.
"Day-to-day relationship between an executive and his immediate assistant and covers training,
direction, motivation, coordination, maintenance of discipline, etc."
- Newman and Warren.
Supervision denotes the functions performed by the supervisors.
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Motivation
"Motivation is the complex force starting and keeping a person at work in an organisation. Motivation is
something that moves the person to action, and continues him in the course of action already
initiates."
- Dubin.
Motivation is the core of management. Technically, the term motivation can be traced to the Latin word
movere, which means 'to move'. Motivating is a term which implies that one person induces another, to
engage in action by ensuring that a channel to satisfy the motive becomes available to the individual.
Motive is energizer of action, motivating is the channelization and activation of motives, motivation is
the work behavior itself. Motivation depends on motives and motivating. It is a complex process.

Leadership

"Leadership is essentially a continuous process of influencing behavior A leader breathes life into the
group and motivates it towards goals. The lukewarm desires for achievement are transformed into
burning passion for accomplishment".
- George R. Terry.
Leadership is the process of influencing the behavior of others to work willingly and enthusiastically for
achieving predetermined goals. It is an essential ingredient for successful organisation.The successful
organisation has one major attribute that sets sets it apart from unsuccessful organisation that is
dynamic and effective leadership.

STAFFING
Staffing in Management
Staffing is that part of the process of management which is concerned with acquiring, developing,
employing, appraising, renumerating and retaining people so that right type of people are available at
right positions and at right time in the organisation. In the simplest terms, staffing is ‘putting people to
jobs’.

Staffing Definition
"Staffing is the function by which managers build an organisation through the recruitment, selection,
and development of individuals as capable employees"
- McFarland
Staffing Process
1. Analyzing Manpower requirements: It is making an analysis of work and estimating the manpower
requirement to accomplish the same.

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 UNIT-1 PRINCIPLE OF MANAGEMENT

2. Recruitment: It is identifying and attracting capable applicants for employment. it ends with the
submission of applications by the aspirants.
3. Selection: It is choosing the fit candidates from the applications received in the process of
recruitment.
4. Placement: This may be on probation and on successfully completion of the same the candidate
may be offered permanent employment.
5. Training and Development: It is concerned with imparting and developing specific skills for a
particular purpose.
6. Performance Appraisal: Systematic evaluation of personnel by superiors or others familiar with
their performance so as to rank employees to ascertain their eligibilty for promotions.

CONTROLLING
Controlling in Management
The managerial function controlling always maximise the use of scarce resources to achieve the
purposeful behaviour of employees in an organisation. In planningstage, it is decided that how the
resources would be utilised but where as in the controlling stage it is observed that whether the
resources are being utilised in the same way as planned or not. Thus, control completes the whole
sequence of management process.

Controlling Definition
"Control refers to the task of ensuring that activities are producing the desired results. Control in this
case is limited to monitoring the outcome of activities, reviewing feedback information about this
outcome, and if necessary, taking corrective actions".
- Reeves and Woodward.
"Controlling is determining what is being accomplished - that is, evaluating performance and, if
necessary, applying corrective measures so that performance takes place according to plans".
- Terry and Franklin.
Features of Controlling
 One can control future happenings but not the happened. Hence in here all the past performance
is measured for taking corrective actions for future periods.
 Every manager in an organisation has to perform the control function. The control may be quality
control, inventory control, production control, or even administrative control.
 Control is a continuous process, it follow a definite pattern and time-table, month after month and
year after year on a continuous basis.
Management by Exception

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 UNIT-1 PRINCIPLE OF MANAGEMENT

It is a system of identification and communication that signals to the manager when his attention is
needed and he concentrates more on the important areas where deviation occurred. Components of
management by exception are as follows:
Measurement: By measuring past and present performance the manager tries to find out the
deviations.
Projection: Manager analyses those measurements that are meaningful to the organisational
objectives.
Selection: It involves the criteria which the manager will use to follow progress towards organizational
objectives.
Observation: It involves measurements of current performances.
Comparison: The manager makes comparisons of actual and planned performance and identifies the
exceptions that require attention.
Decision Making: The manager prescribes the action that must be taken in order to bring
performance back into control or to adjust expectations to reflect changing conditions.

Theories of Motivation

Overview
At a simple level, it seems obvious that people do things, such as go to work, in order to get stuff they
want and to avoid stuff they don't want.
Why exactly they want what they do and don't want what they don't is still something a mystery. It's a
black box and it hasn't been fully penetrated.
Overall, the basic perspective on motivation looks something like this:

In other words, you have certain needs or wants (these terms will be used interchangeably), and this
causes you to do certain things (behavior), which satisfy those needs (satisfaction), and this can then
change which needs/wants are primary (either intensifying certain ones, or allowing you to move on to
other ones).
A variation on this model, particularly appropriate from an experimenter's or manager's point of view,
would be to add a box labeled "reward" between "behavior" and "satisfaction". So that subjects (or
employees), who have certain needs do certain things (behavior), which then get them rewards set up
by the experimenter or manager (such as raises or bonuses), which satisfy the needs, and so on.
Classifying Needs

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 UNIT-1 PRINCIPLE OF MANAGEMENT

People seem to have different wants. This is fortunate, because in markets this creates the very
desirable situation where, because you value stuff that I have but you don't, and I value stuff that you
have that I don't, we can trade in such a way that we are both happier as a result.
But it also means we need to try to get a handle on the whole variety of needs and who has them in
order to begin to understand how to design organizations that maximize productivity.
Part of what a theory of motivation tries to do is explain and predict who has which wants. This turns
out to be exceedingly difficult.
Many theories posit a hierarchy of needs, in which the needs at the bottom are the most urgent and
need to be satisfied before attention can be paid to the others.

Maslow
Maslow's hierarchy of need categories is the most famous example:

self-actualization

esteem

belongingness

safety

physiological

Specific examples of these types are given below, in both the work and home context. (Some of the
instances, like "education" are actually satisfiers of the need.)

Need Home Job

self- education, religion, hobbies,

training, advancement, growth, creativity
actualization personal growth

approval of family, friends,

esteem recognition, high status, responsibilities
community

teams, depts, coworkers, clients, supervisors,

belongingness family, friends, clubs
subordinates

freedom from war, poison,

safety work safety, job security, health insurance
violence

physiological food water Heat, air, base salary

According to Maslow, lower needs take priority. They must be fulfilled before the others are activated.
There is some basic common sense here -- it's pointless to worry about whether a given color looks

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good on you when you are dying of starvation, or being threatened with your life. There are some
basic things that take precedence over all else.

Alderfer's ERG theory

Alderfer classifies needs into three categories, also ordered hierarchically:
 growth needs (development of competence and realization of potential)
 relatedness needs (satisfactory relations with others)
 existence needs (physical well-being)
This is very similar to Maslow -- can be seen as just collapsing into three tiers. But maybe a bit more
rational.
Do any of these theories have anything useful to say for managing businesses? Well, if true, they
suggest that
 Not everyone is motivated by the same things. It depends where you are in the hierarchy (think
of it as a kind of personal development scale)
 The needs hierarchy probably mirrors the organizational hierarchy to a certain extent: top
managers are more likely to motivated by self-actualization/growth needs than existence
needs.


Acquired Needs Theory (mcclellan)

Some needs are acquired as a result of life experiences
 need for achievement, accomplish something difficult. as kids encouraged to do things for
themselves.
 need for affiliation, form close personal relationships. as kids rewarded for making friends.
 need for power, control others. as kids, able to get what they want through controlling others.
Again similar to maslow and alderfer.
These needs can be measured using the TAT (thematic apperception test), which is a projection-style
test based on interpreting stories that people tell about a set of pictures.

Two Factor theory (Herzberg)

According to Herzberg, two kinds of factors affect motivation, and they do it in different ways:
 hygiene factors. These are factors whose absence motivates, but whose presence has no
perceived effect. They are things that when you take them away, people become dissatisfied
and act to get them back. A very good example is heroin to a heroin addict. Long term addicts
do not shoot up to get high; they shoot up to stop being sick -- to get normal. Other examples
include decent working conditions, security, pay, benefits (like health insurance), company
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 UNIT-1 PRINCIPLE OF MANAGEMENT

policies, interpersonal relationships. In general, these are extrinsic items low in the
Maslow/Alderfer hierarchy.
 motivators. These are factors whose presence motivates. Their absence does not cause any
particular dissatisfaction, it just fails to motivate. Examples are all the things at the top of the
Maslow hierarchy, and the intrinsic motivators.
So hygiene factors determine dissatisfaction, and motivators determine satisfaction. The two scales
are independent, and you can be high on both.
If you think back to the class discussion on power, we talked about a baseline point on the well-being
scale. Power involved a threat to reduce your well-being, causing dissatisfaction. Hence, power
basically works by threatening to withhold hygiene factors. Influence was said to fundamentally be
about promising improvements in well-being -- when you are influenced to do something, it is because
you want to, not because you were threatened. Influence basically works by offering to provide
motivators (in Herzberg's terms).

Equity Theory
Suppose employee A gets a 20% raise and employee B gets a 10% raise. Will both be motivated as a
result? Will A be twice as motivated? Will be B be negatively motivated?
Equity theory says that it is not the actual reward that motivates, but the perception, and the
perception is based not on the reward in isolation, but in comparison with the efforts that went into
getting it, and the rewards and efforts of others. If everyone got a 5% raise, B is likely to feel quite
pleased with her raise, even if she worked harder than everyone else. But if A got an even higher
raise, B perceives that she worked just as hard as A, she will be unhappy.
In other words, people's motivation results from a ratio of ratios: a person compares the ratio of
reward to effort with the comparable ratio of reward to effort that they think others are getting.
Of course, in terms of actually predicting how a person will react to a given motivator, this will get
pretty complicated:
1. People do not have complete information about how others are rewarded. So they are going on
perceptions, rumors, inferences.
2. Some people are more sensitive to equity issues than others
3. Some people are willing to ignore short-term inequities as long as they expect things to work
out in the long-term.

Expectancy Theory

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 UNIT-1 PRINCIPLE OF MANAGEMENT

This theory proposes that people will choose how to behave depending on the outcomes they expect
as a result of their behaviour. In other words, we decide what to do based on what we expect the
outcome to be. At work, it might be that we work longer hours because we expect a pay rise.

However, Expectancy Theory also suggests that the process by which we decide our behaviours is
also influenced by how likely we perceive those rewards to be. In this instance, workers may be more
likely to work harder if they had been promised a pay rise (and thus perceived that outcome as very
likely) than if they had only assumed they might get one (and perceived the outcome as possible but
not likely)

Expectancy Theory is based on three elements:

1. Expectancy – the belief that your effort will result in your desired goal. This is based on your past
experience, your self confidence and how difficult you think the goal is to achieve.
2. Instrumentality – the belief that you will receive a reward if you meet performance expectations.
3. Valence – the value you place on the reward.

Therefore, according to Expectancy Theory, people are most motivated if they believe that they will
receive a desired reward if they hit an achievable target. They are least motivated if they don’t want
the reward or they don’t believe that their efforts will result in the reward.

Leadership
The concept and definion of leadership:

The word leadership has come from the word "lead" which means to guide, to conduct, to direct etc. It
can simply be defined as the ability to influence others.
Leadershiop is an art. It is the catalyst that transforms potential into reality.
Leadership is the process of influencing and supporting others to work enthusiastically toward
achieving objectives.
According to harold Koontz
"Leadership is the art of influencing people so that they will strive willingly and enthusiastically towards
the achievement of group goals."
Fred luthans said
"The behaviour of a leader influences the work performance and satisfaction of his subordinates"
According to Stogdill

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" Leadership is the situation and maintenance of structure in expectation and interaction"

paul Pigors has mentioned the four talks of a leader:- Initiation, Representation, Administration and
Exlanation.

Leadership Behavior:
In early days, personal traits were considered as a man source of successful leadership . But this
concepts have been changed at present. Now a days, emphases is given upon the behaviour of
leadership
That means, successful leadership does not depend upon personalo qualities alone, but mainly
eepends upon the appropriatebehaviou of a leader, his skills and actions.
A leader uses three types of skills, namely - Technical skill, human Relation skill and Conceptual skill.
Although these skills are inter-related in practice, these skills are inter-related in practice, they can be
considered separately.
(a) Technical skill:
It refers to a person's knowledge and ability in any type of process or technique. Examples are the skill
learned by Accountants, Engineers, Mechanics, Carpenters.
(b) Human skill:
It is the ability to work effectively with people and to build teamwork.
(c) Conceptual skill:
It is the ability to think in trms models, frameworks and broad relationships.Conceptual skill deals with
ideas, while human skill concered people and technical skill involves things.
On the other hand , it is said that leaders are the product of situation. Successful leadership requires
behaviour that units and stimulates followers toward defined objectives in specific situation.
The three elements-- leader, follower and situation- are variables that affect one another in
determining appropriate leadership behavior.

Leadership and Management

It should be clear that leadership and management are related but they are not the same. A person
can be a manager, a leader, both or neither.
Leadership is an important part of management, but it is not the whole story. Managers plan activities,
organize appropriate structure and control resources , but the primary role of a leader is to influence
others voluntarily to seek defined objectives.
Mangers hold formal position. when as any one could use their informal influence while acting as a
leader.
Strong leaders may be weak managers. On the other hand weak leaders may be effective managers,
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It is also said that a managers is necessarily a leader but a leader may not be a manager.

Leadership and Power

The first ingredient of leadership is power. Power is the potential ability to affect the behavior of
others,In organizational setting, there are usually five kinds of power:
1. Legitimate power: This power is granted through the organizational hierarchy. It is the same as
the authority all managers have legitimate power over their subordinates.
2. Reward power: This power is the power to give withhold rewards. In general, the greater the
number of rewards controlled by a manager and the more important the rewards are to the
subordinates, the greater the manager's reward power. ( Rewards may be salary, bonuses,
promotions, praise, recognition, interesting).
3. Coercive power: This type of power is the power to force compliance via psychological,
emotional or physical punishment. The more a manager uses coercive power, the more likely he or
she is to provoke resentment and hostility.
4. Referent power: This type of power is more abstract that other types of power. It is usually
based on identification or imitation. It may also take the form of charisma, an intangible attribute inte
leader's personality that inspires loyalty and enthusiasm.
5. Expert power: Expert power is derived from expertise. This power is the personal power that
accrues to some one based on the information or expertise that the possess.

Theories of leadership
The different theories of leadership are discussed below:
1. Trait Theory of leadership:
The trait theory also called the “Greatman Theory” of leadership is based on the view that leaders are
born, not made. According to this theory, the leadership is innate.
In ancient times the Greek and Romans believed that leaders were to have certain inborn qualities
such as, intelligence, assertiveness, good vocabulary, attractiveness, self confinece above average
height and similar attributes:
In recent studies, the following key leadership traits have been identified:
a) Drive (including achievement, ambition, energy, initiative and tenacity).
b) Leadership motivation (the aspiration to lead).
c) Honesty and integrity, self- confidence
d) Cognitive ability and an understanding in the business.
e) Creativity, flexibility, adjust-ability and charisma.

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2. Situational theory of leadership:

The general be3lief of situational theory is that leaders are products of real situation rather that gifts of
nature.
A large number of studies have been made on the premise that leadership is strongly affected by the
situation from which the leader emerges and in which he or she operates. Example are – the rise of
Mao Ts c-tung in China in the period after World War second and the emergence of Gandhi in India
during the eighty decades of the twentieth century.
This theory is also known as contingency y theory which is mainly developed by F.E.Fiedler and his
associates.

This approach mainly focuses on the following elements:

a) The leader member relations: The effectiveness of a leader depends upon how the leader is
accepted by its members, how much he is popular among the members.
b) Task structure: If the tasks are clear, the quality of performance can be more easily controlled.
Designing well-defined task structure is a success for a good leader.
c) Position power: A leader with clear and considerable position power can obtain good fellowship
more easily than one without such power.
3. Path-goal theory:
The Path-goal theory developed by Martin G. Evans and Robert House suggests that the main
function of the leader is to clarify and set goals with subordinates, help them find the best path for
achieving the goals and remove obstacles.
4. Behavioral theory of leadership:
In this theory, the success of leader depends upon the behavior pattern of the leader to his
subordinates irrespective of his quality or traits.
5. Follower theory of leadership: This theory is developed by F.H.Sanford. According to his theory,
the subordinates or members of the group accepts a person a leader who is always determined to
meet their expectations, hopes and aspirations, demands etc and fulfill their personal grievances.

Functions of leadership

The following functions are included to leadership:

1) Influence on the behavior of subordinates/follower.
2) Goal setting
3) Maintaining unity
4) Solution of internal conflict
5) Responding subordinates needs
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6) Representation
7) Ensuring security
8) Praising for good work.

Leadership style/types:

1. Leadership style based on the use of authority:

a. Autocratic leadership:
This type of leadership is based on the use of coercive power. An autocratic leader gives orders and
expects compliance. He is dogmatic and leads by the ability to withhold or give punishment or reward.
b. Democratic leadership:
A democratic leader usually consults with subordinates on proposed actions and decisions encourage
participation from them and respect their opinion.
c. Free- rein leadership:
A free rein leader gives followers a high degree of independence in their operations. In
this type, the leader is considered irresponsible. He keeps minimum controlling g and directing
authority in his hands. So, he is regarded as on e of the members of the group.
2. Management style by Rensis Likert:

a. Exploitative-authoritative:
( Managers/leaders are highly autocratic)
b. Benevolent-authoritative:
(Managers/leaders use both reward and punishment to motivate.)
c. Consultative:
(Managers/loaders try to make use of subordinates ideas by allowing them some participation.)
d.Participative:
(Managers/Leaders have complete trust and confidence in subordinates.)

Leadership Qualities:
The following qualities are required to become a successful leader:
 Attitude of accepting overall responsibility
 Physical fitness
 Pleasant personality
 Administrative and Organizing ability
 Farsightedness
 Self determination and control
 Justice
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 Cooperative attitude
 Courage and Initiative
 Time consciousness
 Work related knowledge

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