Introduction To Management

1. Management Chapter 1
Contd..

2. MANAGEMENT : Art or science ??
SCIENCE: Science means a systematic body of knowledge pertaining
to a specific field of study capable of general application.
Properties:
• Systematic body of knowledge:based on the cause and effect
relationship between different variables.
• Scientific inquiry and observation: objective or unbiased
assessment of the problem situation and the action chosen to
solve it can be explained logically. Scientific principles do not
reflect the opinion of an individual or of a religious guru.
For example:the principle that the earth revolves around the
sun has been scientifically proved.
• Experiments:
• Universal truth: based on basic facts which can be applied in all
situations and at all times.

3. Management as science
• Systematic body of knowledge: consisting of general principles and techniques.(Henry Fayol
14 principles)These help to explain events and serve as guidelines for managers in different
types of organisations.
• Universal principles: Scientific principles represent basic facts about a particular field
enquiry.
For example, the Law of Gravitation states that if you throw an object in the air it will fall on
the ground due to the gravitational force of the earth. This law can be applied in all countries
and at all points of time. It is as applicable to a football as it is to an apple falling from tree.
For instance,(Management) the principle of unity of command states that at a time one
employee should be answerable to only one boss.
• Scientific enquiry and experiments: Management principles are also based on scientific
enquiry and investigation. These have been developed through experiments and practical
experience of a large number of managers.
For example, it has been observed that wherever one employee has two or more bosses
simultaneously, confusion and indiscipline are likely to arise, with regard to following the
instructions.
• Cause and effect relationship: For example, when water is heated up to 100ºC, it starts
boiling and turns into vapour. Similarly, the principles of management establish cause and
effect relationship between different variables.
For instance lack of balance between authority and responsibility will cause management to
become ineffective.
• Tests of validity and predictability: Validity of scientific principles can be tested at any time
and any number of times. Every time the test will give the same result. For example, the Law
of Gravitation can be tested by throwing various things in the air and every time the object
will fall on the ground. Principles of management can also be tested for their validity. For
example, the principle of unity of command can be tested by comparing two persons, one
having a single boss and other having two bosses. The performance of the first person will
be higher than that of the second.

4. ART
Art implies the application of knowledge and skills to bring
about the desired results.
• Practical knowledge
• Personal skill
• Result oriented approach
• Creativity
• Improvement through continuous practice

5. Management as an art
• Practical knowledge: For example, a person may have adequate technical knowledge of
painting but he cannot become a good painter unless he knows how to make use of the
brush and colors. Similarly, a person cannot become a successful manager simply by
reading the theory and getting a degree or diploma in management. He must also learn to
apply his knowledge in solving managerial problems in practical life.
• Personal skill: Every artist has his own style and approach to his job.. For example, there
are several qualified singers but Lata Mangeshkar has achieved the highest degree of
success. Similarly, management is personalized. Every manager has his individual approach
and style in solving managerial problems. The success of a manager depends on his
personality in addition to his technical knowledge.
• Result-oriented approach: Arts seeks to achieve concrete results. The process of
management is also directed towards the accomplishment of desirable goals. Every
manager applies certain knowledge and skills to achieve the desired results. He uses men,
money, materials and machinery to promote the growth of the organization.
• Creativity: Art is basically creative and an artist aims at producing something that had not
existed before. Therefore, every piece of art requires imagination and intelligence to create.
Like any other art, management is creative. A manager effectively combines and
coordinates the factors of production to create goods and services. Moulding the attitudes
and behavior of people at work, towards the achievement of the desired goals is an art of
the highest order.
• Improvement through practice: Practice makes one perfect. Every artist become more and
more efficient through constant practice. A dancer, for example, learns to perform better by
continuously practicing a dance. Similarly, manager gains experience through regular
practice and becomes more effective.

6. Management: science and art
• Management is a science because it is an organised body of knowledge
consisting of certain universal facts.
• Management is known as an art because it involves creating results
through practical application of knowledge and skills.
• Science teaches one to know and art to do.
• Art without science has no guide and science without art is knowledge
wasted.
For example, a person cannot be a good surgeon unless he has
scientific knowledge of human anatomy and the practical skill of
applying that knowledge in conducting an operation.
A successful manager must know the principles of management and
also acquire the skill of applying those principles for solving
managerial problems in different situations.
Knowledge of principles and theory is essential, but practical application
is required to make this knowledge fruitful. One cannot become an
effective manager simply by learning management principles by heart.
Science (theory) and art (practice) are both essential for the success
ofmanagement.

7. Management:profession
• A profession is an occupation that requires specialised
knowledge,training and skills.
• Elements:
1. Well defined body of knowledge
2. Restricted entry
3. Service motive
4. Code of Conduct
5. Representative professional association

8. Contd..
• Specialised body of knowledge: In order to practice a profession, a person requires
specialised knowledge of its principles and techniques.
• Restricted entry: There exists institutions and universities to impart education and training
for a profession. No one can enter a profession without going through the prescribed course
of learning.
For example one must pass the Chartered Accountancy examination to practice accountancy
profession.
• Service motive: A profession is a source of livelihood but professionals are primarily
motivated by the desire to serve the community.eg doctors. A manager of a factory is
responsible not only to its owners, but he is also expected to produce quality goods at a
reasonable cost and to contribute to the well-being of the community.
• Representative association: In every profession there is a statutory association or institution
which regulates that profession.
For example, the Institute of the Chartered Accountants of India establishes and administers
standards of competence for the auditors. In Management , Managers have formed
associations for the regular exchange of knowledge and experience. In India, there is the All
India Management Association for this purpose.
• Code of conduct: Members of one profession have to abide by a code of conduct which
contains rules and regulations providing the norms of honesty, integrity and professional
ethics.
For example, the Institute of the Chartered Accountants of India establishes and administers
standards of code of conduct for the auditors. In Management , Managers have formed
associations for the regular exchange of knowledge and experience. In India, there is the All
India Management Association.

9. Functions of Management
(Henry fayol)
• Planning,
• Organizing,
• Staffing,
• Leading,
• Controlling

10. Functions of Management
(Planning)
• Planning is a process of
• Defining goals and objectives
• Developing course of actions and determining the resources needed to
achieve the organization’s goals & objectives. i.e.Formulation of
Objectives, Policies, Procedure, Rules, Programmes and Budgets
Determining organizational goals
and a means for achieving them

11. Functions of Management
(Organizing)
• Organizing is a process of
• Determining what tasks are to be done, how the tasks are to be
done, who is to do them i.e. assignment of authority for action,
who will make decision, who reports to whom.
Development of proper organizational
structure.

12. Functions of Management
(Staffing)
• Staffing is a process of
• Getting right people, for right job, at right time.
• People are asset for an organisation.
• Attracting people to the organization(Recruitment).
• Creating good working conditions.
(retention, promotion, job rotation))
• Specifying job responsibilities and development.
(Job Description and training)

13. Functions of Management
(directing)
• Directing is an act of:
• guiding, supervising and leading people.
• Motivation, leadership, decision making.
Directing is telling people what to do and
seeing that they do it to the best of their
ability.
- Dale

14. Functions of Management
(Controlling)
• Controlling is a process of
• Setting standards of performance.
• Measuring actual performance.
• Comparing actual performance with planned/set goals.
• Taking corrective actions to ensure goal accomplishment.

15. Functions of Management
• All managers carry out managerial functions. However, time spent
for each function may differ.
• Top Level Mgt (Planning & Organizing)
• Middle Level Mgt (Controlling)
• First line Mgt (Leading)

16. Schools of thought
• Classical theory: Emphasised the need for a structure with
well defined rules,regulations and lines of authority.
• Behavioural approach: Shifted focus to human and social
needs.
• Systems approach: Organisation is a series of inputs,
transformation processes and outputs.
• Situational approach:Application of theories depending upon
the situations.

17. Traditional Viewpoint
Behavioral Viewpoint
Systems Viewpoint
Contingency Viewpoint
Quality Viewpoint
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

18. Goals:
Efficiency
Consistency
 Administrative
Management
 Bureaucratic
Management
 Scientific
Management

19. Bureaucratic Management(1920)
 Max Weber

20. Bureaucratic Management
 Use of rules, interpersonal relationships,
hierarchy, a clear division of labor, and detailed
procedures to guide employees’ behaviors
 Seven characteristics
 Rules and procedures—formal guidelines for
the behavior of employees on the job
 Interpersonal relationships—employees are
evaluated according to rules and objective
data.
 Division of Labor—splitting work into simple
routine and well defined tasks. Employees
work under boundaries.

21. CaliperTechnologiesCorporation
CEO
Director of
Quality
Control
Chief
Financial
Officer
VP of
Operations
VP of
Sales &
Marketing
VP of
Research
VP of
Product
Development
VP of
Corporate
Development
Plant
Manager
USA
Controller
Plant
Manager
Germany
Manager of
Chemical
Engineering
Manager of
Chip
Manufacturing
Manager of
Engineering
& Software
Director
of
Manufacturing
Director
of
Manufacturing
Employees Employees

22.  Hierarchical Structure—ranks jobs according
to the amount of authority in each job
 Authority—who has the right to make
decisions of varying importance at different
organizational levels. Authority is given on the
basis of their skills and competence.
 Lifelong Career Commitment—both the employee
and the organization view themselves committed to
each other over the working life of the employee
 Rationality—the use of the most efficient
means available to accomplish a goal

23. Potential Benefits of Bureaucracy
 Efficiency due to division of work.
 Consistency
 Functions best when routine tasks are performed
 Performance based on objective criteria
 Most effective when
 Large amounts of standard information have to be processed
 The needs of the customer are known and are unlikely to
change
 The technology is routine and stable (e.g., mass production)
 The organization has to coordinate the activities of employees
in order to deliver a standardized service/product to the
customer

24. Potential Costs of Bureaucracy
Rigid rules
and
red tape
Protection of authority:
focus on their goals
rather than having
broad perspective
Slow decision making
i.e delays in working
Incompatible with
changing
technology
Incompatible with
21st century workers’
values for freedom
and participative
management

25. Scientific Management
 Frederick W. Taylor
 The father of Scientific Management
– the 1st Efficiency Expert.
 A philosophy and set of management
practices that are based on fact and
observation, not on guesswork

26. Scientific Management
 Believed in scientific task planning and standardization i.e.
standards are to be set in advance for the task, materials,
work methods, quality,time,cost etc.
 Used time-and-motion studies to analyze work flows,
supervisory techniques, and worker fatigue to eliminate
wasteful resources.
 Used functional foremanship, where work is assigned to eight
foremen namely route clerk, instruction card clerk, cost and
time clerk, gang boss, inspector, repair boss and shop
disciplinarian to each work area. Thereby providing expert
advice to the workers to achieve better production results.
 Assumed workers motivated by money $$ i.e incentives
money as per their work.

27. • He was interested in machines --
apprenticeship in industry: Midvale Steel
• Shocked by how inefficient his fellow
workers were
• timed workers with stopwatches
• break down job into parts, make parts
efficient
• figure out how to hire the right worker for
the job
• give the worker appropriate training
Taylor’s Work?

28. • introduced incentive pay plans
(workers were assumed to be motivated
only by money).
• Believed would lead to cooperation--
management and worker
• Studied design of shovels and introduced
a better design at Bethlehem Steel Works,
reducing the number of people shoveling
from 500 to 140
Taylor’s Work? Contd.

29. Insights from Scientific Management
Many companies have used scientific management
principles to improve efficiency, employee selection
and training
Scientific management failed to recognize the
social needs of workers as it considered humans as
tools and the importance of working conditions
and job satisfaction which cannot be quantified.

30. Administrative Management: Overview
Henry Fayol
Focuses on the manager and basic managerial
functions of planning, organizing, staffing,
controlling and leading.
 An approach that focuses on the
principles that can be used by
managers to coordinate the internal
activities of organizations.

31. Fayol’s 14UNIVERSALPrinciplesof Effective
Management
• Division of Work: allows for job specialization.
• Work should be divided among individuals and groups.
• Authority and Responsibility
• Authority right to give orders
• Responsibility involves being answerable
Whoever assumes authority assumes responsibility
• Discipline
• Common efforts of workers to follow rules that govern
the enterprise. Penalties in case of violation.
• Unity of Command
• Employees should have only one boss.

32. • Unity of Direction
• A single plan of action to guide the organization.eg. Single
HR policy.
• Subordination of individual interests to the general interests of
organization: honesty,integrity,fair dealings.
• Remuneration
• Fair and equitable uniform payment system that motivates
employees to contribute to organizational success.
• Centralization
• The degree to which authority rests at the top of the
organization. Fayol felt that proper balance needs to be
maintained between centralization and decentralization.
• Scalar Chain
• Chainlike authority scale from top to bottom through which
all communications flow.
• If communication delays, then gangplank principle(cross
communication) can also be permitted.

33. • Order
• The arrangement of employees and materials where
they will be of the most value to the organization and
to provide career opportunities.
• Equity
• The provision of justice and the fair and impartial
treatment of all employees.to get loyalty and devotion
of the employees.
• Stability of Tenure of Personnel
• Long-term employment is important for the
development of skills that improve the organization’s
performance. Therefore, Management must implement
practices which encourages long term commitment of
employees.

34. • Initiative
• The fostering of creativity and innovation by
encouraging employees to act on their own.
• Esprit de corps (Union is Strength)
• Harmony, team spirit, general good feeling among
employees, shared enthusiasm, foster devotion to the
common cause (organization).

35. Insights from Administrative Theory
Fayols 5 functions of Management as well as 14
principles are applied universally to improve
efficiency, employee selection and training
Scientific management failed to offer guidelines as
to when, where and how the principles have to be
applied.
Not applicable in the present volatile market
scenario.
The focus was more on control and discipline
rather than morale.

36. Behavioral Viewpoint: Overview
 Focuses on dealing effectively with the
human aspects of organizations
 Started in the 1930’s
 Applied knowledge of behavior sciences
such as psychology, sociology and
anthropology to develop to manage
people.
 Concluded that with increase in
social interactions job performance
increases.

37. Mary Parker Follett’s Contributions
 Managers need to establish
good working relationships
with employees
Goal:
Improve
Coordination

38. “Managers need to have a common
touch and to be a team leader and not a
drill sergeant. When their people shine,
they shine.”
Vickie Yoke, Senior Vice President, Alcatel
Snapshot

39. The Hawthorne Studies
• Studies how characteristics of the work setting
affected worker fatigue and performance at the
Hawthorne of the Western Electric Company
from 1924-1932.
• Worker productivity was measured at various levels of light
illumination.
• Two groups: in one group the intensity of light was systematically
varied, In other group light was constant.
• Researchers found that regardless of whether the light levels
were raised or lowered, worker productivity increased.

40. The Hawthorne Studies
The Hawthorne Studies
•The Relay Assembly Test Room Experiments
Working conditions, wages, rest periods, financial incentives were
increased leading to rise in productivity
•The Bank Wiring Observation Room Experiment
Analyze the social relationships in a work group
14 male workers were formed into a small working group and incentives
were paid according to their effort and output. work of individual affected
the output of the group. therefore highly efficient workers put pressure
on the less efficient ones leading to erroneous reports.
Thus work group norms, beliefs, sentiments have great influence on
individual behavior.

41. Employees are
motivated by social
needs and association
with others
Employees’ performance
is more a result of peer
pressure than
management’s incentives
and rules
Managers need to
involve subordinates
in coordinating their
work to improve
efficiency
If treated well, human
beings can expand
their energies and
show good results
Lessons from the Hawthrone Studies
Behavioral Viewpoint

42. Snapshot
“Teamwork is one of the most beautiful
experiences in life. Teamwork is our
core value and a primary way that the
Container Store enriches the quality
of employees’ work life.”
Kip Tindell, President, The Container Store

43.  System approach considers organisation
as an association of interrelated and
interdependent parts
 Systems viewpoint: an approach to solving
problems by diagnosing them within a
framework of transformation processes,
outputs, and feedback
Systems Viewpoint:
Systems Concepts

44. Inputs
Human, physical,
financial, and
information
resources
Transformation
Process
Outputs
Products
and
services
Feedback Loops
Basic Systems View of Organizations
All departments are interrelated. Efficiency of one
department affects efficiency of other department.

46.  Closed system: limits its interactions with
the environment (e.g., stamping department
in GM assembly plant)
 Open system: interacts with the external
environment (e.g., marketing department)
System Types
An organisation which is not adaptive and
responsive to its environment would not
survive or grow over a period of time.

47.  Flow: In an open system, inputs are
received from its environment and are
transformed into output. Thus all the
information, materials and energy flows
within the organization
 Feedback: warning signals regarding
impending dangers. e.g. customer
complaints.
System Types

48. The Contingency Approach
What managers do in practice depends on a
given set of circumstances – a situation.

49.  Management practices should be consistent
with the requirements of the external
environment, the technology used to make a
product or provide a service, and capabilities
of the people who work for the organization
 Uses concepts of the traditional, behavioral
and system viewpoints

50.  External environment—stable or
changing
 Technology—simple or complex
 People—ways they are similar and
different from each other
Contingency Variables

51. Behavioral Viewpoint
How managers influence others;
 Informal group
 Cooperation among employees
 Employee’s social needs
Systems Viewpoint
How the parts fit together.
 Inputs
 Transformations
 Outputs
Traditional Viewpoint
What managers do:
 Plan
 Organize
 Lead
 Control
Contingency Viewpoint
Managers’ use of other viewpoints
to solve problems involving:
 External environment
 Technology
 Individuals
ContingencyViewpoint:Drawson
Other Viewpoints,As Necessary

52.  Quality: how well a product or service
does what it is supposed to do—how closely
and reliably it satisfies the specifications to
which it is built or provided
 Total Quality Management (TQM): a
philosophy that makes quality values the
driving force behind leadership, design,
planning, and improvement initiatives

53.  Inputs or raw materials
 Operations
 Outputs
 Measuring by variable or a product’s characteristics
 Measuring by attribute or a product’s acceptable/
unacceptable characteristics
 Statistical process control
 Quality of a process (e.g., sigma)
Quality Control Process

54. Lower Costs
and Higher
Market Share
Decreased
Product
Liability Quality
Positive
Company
Image
Learning from the Quality Viewpoint