MANAGERS

AND MANAGEMENT

EVOLUTION OF MANAGEMENT
MANAGERS AND MANAGEMENT

 Managers in today’s market must update

tools and principles on a continuous
basis.
 Management development is
increasingly global in outlook and places
a high value on contributing to
organizational effectiveness and
competitive advantage.
 To be successful a manager must use
and integrated approach, using a
combination of tools and principles.
MANAGEMENT DEVELOPMENT

 High performance leading organizations are

increasingly distinguished by 7 features:
1. Linking management development to
business plans and strategies.
2. Being boundless, flat, nonhierarchical
3. Using global and cross cultural orientation
4. Individualizing learning that is focused
within the context of organizational learning
5. Applying customized training aligned with
corporate culture
6. Employing a career development focus
7. Focusing on the development of core
competencies.
MANAGEMENT AFFECTS EVERYONE
 Our society depends on the goods and
services provided by different types of
organizations that individuals manage.
 All organizations are guided and
directed by the decisions of one or
more individuals who are commonly
known as managers.
MANAGEMENT AFFECTS EVERYONE
Peter Drucker, a nationally recognized
management consultant describes 3 major tasks
of managers as:
1. To decided the purpose and mission of the
organization.
2. To make work productive.
3. To manage social impacts and responsibilities.
MANAGEMENT AS A PROCESS

What do statements like “ that is a well-managed

company “ mean? They seem to imply that
management is some type of work or
set of activities and that these activities
are performed quite well and
sometimes not so well.
MANAGEMENT AS A DISCIPLINE
Classifying management as a discipline suggests
that there is a body of knowledge that can be
learned.
(1) Management is a subject with principles, concepts, and
theories.
(2) A critical purpose of studying management is to learn how
in the process of managing to apply principles, concepts, and
theories of management and this is particularly emphasized
throughout your internship experiences.
(3) This internship semester you will assume the role of a
manager even if this is not your current position. Why? To
begin to think, analyze, and apply management theories,
concepts and principles within your internship setting. It is
never to early to start thinking like a manager.
 MANAGEMENT IS ALSO
A HUMAN ACTIVITY

 As a human activity management emphasizes the

importance of employees with whom managers
work and whom they manage in accomplishing an
organization’s objectives.
 In organizations, people are the most important
asset. Successful managers understand this and
recognize the need to establish a strong bond
between the organization and the relationships of
the manager and the people they manage.
 MANAGEMENT AS A CAREER
 We are emphasizing management in the internship
experiences because we recognize that in today’s
environment which is fast changing and competitive.
We can contribute to successful organizations by
providing students with a solid foundation of experience
in thinking like a manager while they are learning about
the organization.
 Spend this internship semester thinking about the
management theories and principles that can contribute
positively to your organization. And also think about
how you would manage each situation for a more
positive outcome.
 DEFINITION OF MANAGEMENT
 The management process is an integrated whole even
though we may describe the process as a series of
separate activities to understand the parts.
 The model we are using identifies the management
functions as planning, organizing, and controlling linked
together by leading.
 What does this mean? Planning determines what results
the organization will achieve, organizing specifies how it
will achieve the results, and controlling determines
whether results are achieved and by using planning,
organizing and controlling managers exercise
leadership.
 Organizing
Leading is the management
process that integrates everything
else a manger does.
 Leadership is a difficult concept to define but
means the ability to influence others to pursue
a common goal.
 Think about good leaders that you have
known. Good leaders are typically driven by
an overriding vision or mission.
 ORGANIZING
 The organizing, leading, and controlling
functions all come from planning. How? These
functions carry out the planning decisions.
 These plans may differ in focus from goals for
the short or long term but as a whole these
plans are the primary tools for preparing for
and dealing with changes in the organization’s
environment.
 ORGANIZING

 The purpose of the organizing function is to

create a structure of task and authority
relationships to achieve the organization’s
objectives.
 Organizing can be viewed as turning plans
into action and this allows an organization to
function effectively as a cohesive whole.
 CONTROLLING
The controlling function of management
requires 3 elements:
1. Established standards of performance.
2. Information that indicates deviations between
actual performance and the established
standards.
3. Action to correct performance that does not
meet these standards.
 AND NOW TO THE FUN! LEARNING HOW
TO MANAGE

 The subject is trying to help you develop your

knowledge, attitudes and skills. And it will teach you
how to apply your formal education so that once you
become a manager you will understand how to face
challenges and make decisions.
 The term management refers to the body of knowledge,
concepts and procedures used by managers.
 A great deal of management knowledge comes from the
autobiographies of people who practiced management.
LEARNING HOW TO MANAGE (CONT.)
 Many disciplines have contributed to the study
of management, such as social scientists,
psychologists, sociologists and others.
Consider management a social phenomenon
and the manager to be an important social
resource to scientifically understand and
study. Other professions like mathematics,
accounting, philosophy and numerous others
have contributed applications to the practice
of management.
Evolution of Management Thought
1. The Classical Theory of Management
 Bureaucratic Model by Max Weber around 1900
 Scientific Management introduced by F.W. Taylor around 1910
 Process Management advanced by Henry Fayol around 1910
2. The Neo-Classical Theory
 Human Relation Management by Elton Mayo and Roethlisberger around
1910
 Behavioral Sciences Movements was introduced by A. Maslow, McGregor
around 1940
3. The Modern Management Theories
 Quantitative Approach by Taylor around 1950
 Systems Approach after 1950
 Contingency Approach was developed by Lorsch, Lawrence and others.
CLASSICAL APPROACH
This approach emphasizes organizational
efficiency to increase organizational success. It
believes in functional relationship, following of
certain principles based on experience, a
bureaucratic structure and reward-punishment
nexus.
 Max Weber (1864-1920) Bureaucratic model

According to Weber, beaucracy is a particular

type of administrative structure developed
through rational-legal authority. Bureaucratic
structures evolved from traditional structures
with the following changes:
 THE CONTRIBUTORS TO
CLASSICAL
ORGANIZATIONAL THEORY:
WEBER AND FAYOL

 Max Weber was the primary architect of the

theory of the organization as a bureaucracy.
 His view of a bureaucracy was a smoothly
functioning, highly efficient machine in which
each part is tuned to perform its prescribed
function.
MAX WEBER (CONT.)

Weber believed that an efficient organization should be based

on 5 principles

Principle 1. In a bureaucracy, a manager’s formal authority

comes from the position held in the organization.
Principle 2. In this context people should occupy positions
because of their performance, not because of their social
standing or personal contacts.
Principle 3. The extent of each position’s formal authority and
task responsibilities should be clearly understood.
Principle 4. Positions should be arranged hierarchically to that
authority is exercised effectively and employees know to
whom they are to report and who reports to them.
Principle 5. Managers must create a will-defined systems of
rules, standard operating procedures, and norms to control
behavior within an organization.
1. Jurisdictional areas are clearly specified,
activities are distributed as official duties (unlike
traditional form where duties delegated by leader
and changed at any time).
2. Organization follows hierarchical principle —
subordinates follow orders or superiors, but have
right of appeal (in contrast to more diffuse
structure in traditional authority).
3. Intential, abstract rules govern decisions and
actions. Rules are stable, exhaustive, and can be
learned. Decisions are recorded in permanent
files (in traditional forms few explicit rules or
written records).
4. Means of production or administration belong to
office. Personal property separated from office
property.
5. Officials are selected on basis of technical
qualifications, appointed not elected, and
compensated by salary.
6. Employment by the organization is a career. The
official is a full-time employee and looks forward
to a life-long career. After a trial period they get
tenure of position and are protected from
arbitrary dismissal.
Characteristics of Weber’s ideal Bureaucracy:

 Work specification and division of labor

 Abstract rules and regulations:

 Impersonal relations of managers:

 Hierarchy of organization structure

 THE CLASSICAL APPROACH (CONT.)

Frederick W. Taylor made an important contribution to

scientific management.
 He observed workers producing far less than capacity
in steel firms.
 He recognized there were no studies to determine
expected daily output per worker in the form of work
standards and the relationship between these standards
and wages.
 Then he tried to find the one best way to do a job,
determining the optimum work pace, the training of
people to do the job properly and successful rewards for
performance but using an incentive pay system.
THE CLASSICAL APPROACH
Taylor’s work lead to the following 4 principles:
Principle 1. Study the way workers perform their tasks,
gather all the informal knowledge that workers possess,
and experiment with ways to improves the performance
of tasks.
Principle 2. Codify the new methods of performing tasks
into written rules and standard operating procedures
(sops).
Principle 3. Carefully select workers so that they possess
skills and abilities that match the needs of the task and
train them to perform according to rules and procedures.
Principle 4. Establish a fair or acceptable level of
performance for a task and then develop a pay system
that awards acceptable performance.
F.W. Taylor’s Scientific management
Scientific management, also called Taylorism, is
a theory of management that analyzes and
synthesizes workflows. Its main objective is
improving economic efficiency, especially labor
productivity.
It was one of the earliest attempts to apply
science to the engineering of processes and to
management. He started his experiment with
the concept of scientific management at
Midvale Steel Co. He saw that the employees
were deliberately working at a pace slower
than one capability.
He found three reasons behind it:
 Fear of losing their jobs if they increase their
output
 Faulty wage systems

 Outdated methods of working.

Outcomes: Two major managerial practices:

1. Piece-rate incentive system
2. Time-and-motion study
Piece-rate incentive system
It is based on the assumption that the degree of
efficiency varies from worker to worker and
hence the workers must be paid according to
their degree of efficiency. The main features of
the system are:

The system is based on piece rates.

 The standard output for unit of time is pre-
determined on the basis of time and motion
study.
 There are two piece rates, one lower and another
higher.
 Those who reach the standard or exceed it, get
wages at higher piece rate (e.g. 120% of piece
rate) and those who fail to reach it, get wages at
a lower piece rate (e.g. 80% of piece rate).
 Minimum wages for the workers are not
guaranteed
TIME-AND-MOTION STUDY
Time study is a direct and continuous observation
of a task, using a timekeeping device (e.g.,
decimal minute stopwatch, computer-assisted
electronic stopwatch, and videotape camera) to
record the time taken to accomplish a task and it
is often used when
 There are repetitive work cycles of short to long
duration,
 Wide variety of dissimilar work is performed, or

 Process control elements constitute a part of the

cycle.
PROCESS MANAGEMENT BY HENRY FAYOL

 He started his career as a junior engineer in a

coal mine company in France and became its
General Manager in 1980.
 His contribution may be classified under three
categories: classification of business activities,
functions of management, principles of
management.
 It focused on principles that could be used by
managers to coordinate the internal activities of
organizations
 THE CONTRIBUTORS TO
CLASSICAL
ORGANIZATIONAL THEORY:
WEBER AND FAYOL

 Henry Fayol was the other major contributor and

devised his 14 principles of effective management:
Principle 1. Division of Labor: Advocated specialization
and increasing worker’s responsibilities.
Principle 2. Management Authority and Responsibility:
Managers must have the authority to give orders and be
responsible for effectiveness of their departments.
Principle 3. Unity of Command: Employees should
receive orders from and report to only one supervisor.
HENRY FAYOL (CONT.)
Principle 4. Line of Authority: Restricting the
organization’s number of levels enable it to
act quickly and flexibly.
Principle 5. Centralization: Managers must decide how
much authority to centralize at the top and how much to
give to workers.
Principle 6. Unity of Direction: All workers should be
committed to the same plan of action.
Principle 7. Equity: Workers are expected to perform at
high levels and to be treated with respect and justice.
Principle 8. Order: Order is the methodical arrangement
of jobs to provide the greatest benefits and career
opportunities.
Principle 9. Initiative: Managers must encourage workers
to act on their own to benefit the organization.
HPrinciple
ENRY FAYOL (CONT.)
10. Discipline: Employees would be expected to
be obedient, energetic and concerned about the
organization’s welfare.
Principle 11. Remuneration: Managers should use reward
systems, profit sharing and bonuses to acknowledge high
performance.
Principle 12. Stability of Tenure of Personnel: Long term
employment helps employees develop the skills to make
significant contributions.
Principle 13. Coordination of Individual Interest to the Common
Interest: Employees subordinate their individual interest to
those of the firm.
Principle 14. Espirit de Corps: Importance of a shared
commitment and enthusiasm in an effective organization.
CONTRIBUTIONS OF THE CLASSICAL
APPROACH
 The greatest contribution of the classical approach was
the identification of management as an important
element of organized society.
 The identification of management functions: planning,
organizing and controlling provided the basis for training
new managers and was a valuable practice.
 Many management techniques used today: time and
motion analysis, work simplification, incentive wage
systems, production scheduling, personnel testing,
and budgeting are techniques from the classical
approach.
LIMITATIONS OF THE CLASSICAL APPROACH
 One major criticism is that the majority of
insights are to simplistic for today’s complex
organization. The classical approach and the
scientific management approach worked in
organizations that were very stable and
predictable and today little of that exists.
 NEO CLASSICAL THEORY
BEHAVIORAL APPROACH

 The behavioral approach to management has 2 branches: the

Human relations approach from the 1950’s and the behavioral
science approach.
 In the human relations approach managers must know why
their subordinated behave as they do and what psychological
and social factors influence them.
 Advocates of this approach try to show how the process and
functions of management are affected by differences in
individual behavior and the influence of groups in the
workplace.
 This approach requires managers to recognize employees’
need for recognition and social acceptance and this results in
training in human relation skills for managers.
 THE BEHAVIORAL
SCIENCE APPROACH

 The individuals in the behavioral science branch of

the behavioral approach believe that the human is
more complex than the “economic man” description
of the classical approach and the “social man”
description of the human relations approach.
 The behavioral science approach concentrates
more on the nature of work itself and the degree to
which it can fulfill the human need to use skills and
abilities.
THE BEHAVIORAL SCIENCE APPROACH
 The Hawthorne Studies: a series of research studies
conducted at the Hawthorne Works of General Electric helped
lend support to the behavioral approach to management theory.
 The research used varying lighting levels in the plant’s secretarial
pool to determine the effects of different levels on productivity
expecting productivity levels to drop when lighting levels dropped. The
Result was surprising: productivity only dropped when workers could
no longer see well enough to do their work.
 The results showed that the presence of the researchers was
affecting the results because the workers enjoyed the attention and
produced the results they believed the researchers wanted.
 Summary: The Hawthorne effect was used to describe this effect of
increased productivity due to increased attention.
 Human Relations Movements
 ELTON MAYO: He is recognized as the father of
human relations approach. Mayo and his
associates conducted their study at Western
Electric's Hawthorne Plant between 1927-1932,
to evaluate the attitude and psychological
reaction of workers in on-the-job situation.
 HAWTHORNE EFFECT

 The Hawthorne effect (also referred to as the

observer effect) is a type of reactivity in which
individuals modify or improve an aspect of their
behavior in response to their awareness of being
observed.

 Some of the major phases of Hawthorne
experiments are as follows:
1. Illumination Experiments
2. Relay Assembly Test Room Experiments
3. Mass Interviewing Programme
4. Bank Wiring Observation Room Experiment.
 1. Experiments to determine the effects of
changes in illumination on productivity,
illumination experiments, 1924-27.
 2. Experiments to determine the effects of
changes in hours and other working conditions on
productivity, relay assembly test room
experiments, 1927-28;
 3. Conducting plant-wide interviews to determine
worker attitudes and sentiments, mass
interviewing programme, 1928-30; and
 4. Determination and analysis of social
organisation at work, bank wiring observation
room experiments, 1931-32.
 MARY PARKER FOLLETT
 She studied political science and economics at
Harvard and Cambridge. She was a social worker
associated with educational, recreational and
vocational guidance centers. She interpreted
classical management principles in terms of
human factor. Her main concern was the efficient
use of people. She used the tool of psychology to
answer various questions. She had a reputation
as a pioneer of human relations approach.
TEACHINGS
 Mary Parker Follett (1868-1933) provided
much of the management theories helping
organizations recognize that they could be viewed
form the perspective of individual or group behavior.
She was a social philosopher whose writings
provided a more people-centered view of the
organization than the predominant scientific
management writing.
 According to Follett, the manager’s job was to
harmonize and coordinate group efforts and
managers and workers should view themselves as
partners in a common project. Managers would act
more from their knowledge of human behavior than
from their formal authority.
BEHAVIOURAL SCIENCES MOVEMENT

 A. ABRAHAM MASLOW:
 An eminent U.S. psychologist, gave a general
theory of motivation known as Need Hierarchy
Theory. Human behavior is goal-directed. The
needs of individual serves as a driving force in
human behaviour. Therefore, a manager must
understand the “hierarchy of needs”. Maslow has
proposed “The Need Hierarchy Model”
 Once a need is satisfied, it declines in importance
and the next higher need is activated. There are
opportunities for fulfillment off the job and on the
job in each of the five levels of needs
 SELF
ACTUALIZATION

ESTEEM NEEDS

SOCIAL NEEDS

SAFETY NEEDS

PHYSIOLOGICAL NEEDS

PHYSIOLOGICAL NEEDS
 DOUGLAS- McGregor:
 He was a social psychologist and professor at
Massachusetts Institute of Technology, U.S.A.
His famous works included: The Professional
Manager, Leadership and Motivation, The
Human Side of Enterprise.
 He is known for the development of a theory on
Motivation, named as Theory X and Theory Y.
X Y THEORY

THEORY THEORY
X Y

Most people dislike work Work is a natural activity like play

Most people must be coerced and People are capable of self direction
threatened before they work and self control

Most people prefer to be directed. People become committed to

They avoid responsibility and have organizational objectives if they
little ambition are rewarded in doing so
E. PETER F. DRUCKER:

He was born in Vienna in 1909 and has varied

experience. He served as newspaper
correspondent, an economist, a management
consultant in different countries and was a
Professor of Philosophy and Politics, Professor of
Management and Professor of Sciences.
Some of his most important contributions are as
follows:
 Nature of Management

 Organization

 Functions of Management

 Management by Objectives

 Futurity and Organizational Change

CONTRIBUTIONS OF BEHAVIORAL
APPROACH

 Contributions of the Behavioral Approach

include increased use of teams to accomplish
organizational goals, focus on training and
development of employees, and the use of
innovative reward and incentive systems.
 In addition the focus on modern management theory
resulted in empowering employees through shared
information.
 LIMITATIONS OF THE BEHAVIORAL
APPROACH

 The limitations included the difficulty for

managers in problem situations and the fact
that human behavior is complex. This
complicated the problem for managers trying
to use insights from the behavioral sciences
which often changed when different
behavioral scientists provided different
solutions.
MODERN MANAGEMENT THEORY

 Quantitative Approach
 Management science
 Operations Management
 Management information system
 Systems theory approach

by Ludwing Von Bertalanffy, Lawrence J.

Henderson, W.G. Scott, Deniel Katz, Robert L.
Kahn, W. Buckley and J.D
 Contingency or Situational Approach

by J.W. Lorsch and P.R. Lawrence in 1970

QUANTITATIVE APPROACH

This theory became an acceptable theory during

world war II , when Britain wanted to solve the
problem of war. The problem was that the radar
system did not perform well at field sites as it
performed at the testing stations.
 During the war managers, government officials,
and scientists are brought together to help the
army to utilize the resources effectively. The
experts solved many logistic problems in the war.
After the war, such techniques were used by the
organizations to solve their business problems.
This school of thoughts uses statistics,
optimization models, information models, and
computer simulation to solve business problems.
 It has various branches, such as
 Management science
 Operations Management
 Management information system

 Management Science approach: Also known

as the operation research approach, which is
applied in the areas like capital budgeting,
production scheduling, product strategy
management, human resource planning and
inventory management.
 The operations management approach: is
primarily concerned with production
management and its related areas. This approach
is helpful in decision making in the functional
areas like finance, marketing and human
resource management.

 The Management System approach: focuses

on designing and implementing computer based
information systems for use by management.
SYSTEMS THEORY APPROACH

 It is set of inter related and interdependent parts arranged

in a manner that produces a unified whole.
 The various sub-systems should be studied in their inter-
relationships rather, than in isolation from each other.
 An organizational system has a boundary that determines
which parts are internal and which are external.
 A system does not exist in a vacuum. It receives
information, material and energy from other systems as
inputs. These inputs undergo a transformation process
within the system and leave the system as output to other
systems.
 An organization is a dynamic system as it is responsive to
its environment. It is vulnerable to change in its
environment.
EVALUATION & CRITICISM
 The systems approach assists in studying the
functions of complex organizations and has been
utilized as the base for the new kinds of
organizations like project management
organization. It is possible to bring out the inter-
relations in various functions like planning,
organizing, directing and controlling. This
approach has an edge over the other approaches
because it is very close to reality.
 This approach is called abstract and vague. It
cannot be easily applied to large and complex
organizations. Moreover, it does not provide any
tool and technique for managers.
CONTINGENCY OR SITUATIONAL APPROACH

 This was developed by J.W. Lorsch and P.R.

Lawrence in 1970 who were critical of other
approaches presupposing ‘one best way to
manage’.
 Management problems are different under
different situations and need to be tackled as per
the demand of the situation. One best way of
doing may be useful for repetitive things but not
for managerial problems.
 A manager should study to find out the method
that fits into the situation and helps in precise
realization of goals of the enterprise.”There is no
one best way to organize
EVALUATION & CRITICISM

 This approach takes a realistic view in

management and organization. It discards the
universal validity of principles. Executives are
advised to be situation oriented and not stereo-
typed. So executives become innovative and
creative.
 On the other hands, this approach does not have
theoretical base. An executive is expected to
know all the alternative courses of action before
taking action in a situation which is not always
feasible.
CONTRIBUTIONS OF THE MANAGEMENT SCIENCE
APPROACH
 Mostimportant contributions are in production
management focusing on manufacturing
production and the flow of material in a plant
and in operations management solving
production scheduling problems, budgeting
problems and maintenance of optimal
inventory levels.
 LIMITATIONS OF THE
MANAGEMENT
SCIENCE APPROACH

 The shortfall of this approach is that management

science does not deal with the people aspect of an
organization.
ATTEMPTS TO INTEGRATE THE THREE
APPROACHES TO MANAGEMENT
 One attempt to integrating the three approaches to
management is the Systems Approach. The Systems
Approach stresses that organizations must be viewed as
systems in which each part is linked to each other.
 The other approach is the Contingency Approach. The
Contingency Approach stresses that the correctness of a
managerial practice is contingent on how it fits the
particular situation.
 The system’s approach views the elements of an
organization as interconnected and as being linked to its
environment. See the discussion on Compaq.
ATTEMPTS TO INTEGRATE THE THREE
APPROACHES TO MANAGEMENT
 It is important to understand that most
organizations must operate as open systems to
survive and use a systems perspective to
management. And the objectives of the individual
parts of the organization must be compromised for
the objectives of the entire firm.
 . In summary, the contingency approach involves
identifying the important variables in different
situations, evaluating the variables, and then
applying appropriate management knowledge and
principles in selecting an effective approach to the
situation