amf 101 organization theory and management

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AMF101 ORGANIZATION THEORY AND MANAGEMENT

Master of Finance & Control Copyright © Amity university – India Page 1

PREFACE

With the rapidly changing socio-economic and political environment and

trend towards globalization of economies, management of human resourcesin modern organisations has become a very challenging job. The people in

organisations differ in terms of their attitudes, beliefs, values, background,

knowledge etc and a thorough understanding of these concepts and

processes can be of great value to the modern managers. The present study

material synthesizes the study of the individual, the group and the

organisation system and elaborates the applied behavioral science concepts,

principles and techniques. It also provides an integrated view of modern

organisations, their environment and organizational designs for healthyorganisation and environment interface.

The subject matter has been presented in a simple and lucid manner, keeping

the unique requirements of students in mind. A critical and balanced

coverage is given to all the important topics in ORGANISATION AND

MANAGEMENT. At the end of each chapter, multiple choice questions are

given to enable the students to have self-appraisal of their understanding of

the concepts in the chapter.

I am grateful to all those who have directly or indirectly helped me in

preparing this course material. I sincerely believe that there is always scope

for improvement. Therefore; I invite suggestions for further enriching the

study material.

GEETA MISHRA


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INDEX

Chapter

No.

Topic Page No.

1 Overview of Management 4

2 Management in the Era of Change 46

3 Interpreting the Organizational Reality 68

4 The Organization 83

5 Human resource Management 123

6 Bibliography 166

7 Key to End Chapter Quizzes 167


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CHAPTER I

OVERVIEW OF MANAGEMENT

CONTENTS

1.1 Classical approach1.2

Neo Classical Approach 1.3 Systems Approach to Management 1.4

Contingency Approach 1.5 Management and Managerial Roles 1.6

Practice and Study of Management

1.7

Challenges of Management in the 21

st

century


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SCHOOLS OF MANAGEMENT

Management has been practiced in some form or the other since the dawn of

civilization. Ever since human beings started living and working together ingroups, techniques of organisation and management were evolved. The

Pyramids of Egypt, the Chinese Wall, the Roman Catholic Church and other

such wonders could not be possible without the application of management

principles and techniques.

Despite ancient origins, very little conceptual and organized body of

knowledge could be developed until the end of 19th century. A scientific and

systematic study and application of management began mainly after the

Industrial Revolution. Since then the development of management thought

has been quite rapid.

The main stages in this development can be classified as follows:

1. Classical approach2. Neo-classical approach3. System’s approach 4.

Contingency approach

1.1 CLASSICAL APPROACH

The classical approach to management is also known as Functional

Approach, Empirical Approach or Management Process Approach. Its

salient features are as follows:

1. Management is viewed as a systematic network (process) of

interrelated functions. The nature and content of these functions, themechanics by which each function is performed and the


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interrelationship between these functions is the core of the classicalapproach.

2. On the basis of experiences of experiences of practicing managers,

principles are developed. These principles are used as guidelines forthe practicing executive and basis of management training.

3. Functions, principles and skills of management are considered

universal. They can be applied in different situations.4.

Formal training and education is emphasized for developingmanagerial skills in would be managers. Case study method is oftenused for this purpose.

5. Emphasis is placed on economic efficiency and the formalorganisation structure.

6. People are motivated by economic gains. Therefore, organisationscontrol economic incentives.

Uses and Limitations

The classical approach offers a convenient framework for the education and

training of managers. First, the observational method of case study is helpful

in drawing common principles out of past experiences with some relevance

for future application.

The second merit of this approach is that it focuses attention on what

managers actually do. Thirdly, this approach highlights the universal nature

of management. Fourthly it provides a scientific basis for management

practice. It also provides a starting point for researchers to verify the validity

and to improve the applicability of management knowledge. Such

knowledge about management is effectively presented. Classical approach

provides a foundation on which the science of management can be built.


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The classical approach however suffers from several

shortcomings also which are as follows:

First, it offers a mechanistic framework that undermines the role of human

factor. Secondly, the environmental dynamics and their effect on

management have been discounted. Thirdly, there is a positive danger in

relying too much on past experiences because a principle or technique found

effective in the past may not fit a situation in the future. Fourthly the totality

of the real situation can seldom be incorporated in a case study. Lastly, the

classical approach is based on over-simplified assumptions. Its principles are

ambiguous and contradictory.

Classical approach is based on three main pillars-bureaucracy, scientific

management and administrative theory which are discussed below:

SCIENTIFIC MANAGEMENT (1856-1915)

Scientific management grew out of the need to increase productivity. At the

beginning of the 20th century skilled labour in the United States was in short

supply and it was necessary to improve the efficiency of workers. FrederickWinslow Taylor (1856-1915) is regarded as the father of scientific

management .He was a brilliant engineer and management scientist in USA.

He was convinced that there was a science of doing things in physical work

at shop door level. In order to develop and scientific and systematic ways of

doing things and to optimize efficiency, Taylor conducted a series of

experiments. His objective was to provide a scientific basis for designing

and performing jobs. He advocated a detailed scientific study of each job to

determine the best way of doing it. He believed that management is a

science resting on well recognized and clearly defined principles. He

exhorted managers to adopt scientific and systematic approach to managerial

problems in place of rule of thumb or trial and error methods.


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Principles of Scientific Management

The basic principles of scientific management are as follows:

1. Develo p a true science for each element of a worker’s job to replacerule of thumb method : Each element of a job and the motionsrequired to perform it should be scientifically analyzed to determineand use the most efficient ways of doing it. Intuition, experience andhit or miss methods are replaced by scientific methods.

2. Job speciali zation or division of labour shoul d be part of each job .Every worker should concentrate on the function so that he can

become a specialist in it. Taylor suggested an almost equal division ofthe work and the responsibility between the management and the

workers. He asserted that management should assume exclusiveresponsibility for planning and workers should assume doing, i.e.

performing work as per instructions of management. In this wayTaylor distinguished the roles and responsibilities of managementfrom those of workers.

3. Scienti fi c Selection, training and development of workers : Properselection of employees best suited for the job would improve

productivity. Scientific training should be arranged to develop eachemployee to his greatest efficiency and prosperity. First, the

qualifications required for each job be clearly specified. These should be used as the basis for selection and training of employees. When aworker works on a job for which he is both physically and mentallyfit, he can earn higher wages and mental satisfaction.

4. Close co-operation between management and workers to ensure thatwork is being done in accordance with the principles of scientificmanagement. Harmonious relationship between management andlabour is necessary for complete harmony of interests. Tayloradvocated a complete mental revolution on the part of both managersand workers. Managers should adopt an enlightened attitude and share

the gains of productivity with workers. Workers on their part shouldwork with discipline and loyalty.

5. Maximum output in place of restri cted output . Conflict betweenmanagement and labour arises mainly on division of surplus. Taylor


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suggested that the best way to resolve the problem is to increase thesize of surplus so that each side can have a larger share.In other words, Taylor believed that management and labour have a

common interest in increasing productivity.To sum up, Taylor’s principles:

Science, not rule of thumb

Harmony, not discord

Maximum output, in place of restricted output.

Development of each man to his greatest efficiency

Maximum prosperity of employer, coupled with maximum prosperity of

each employee.

Co-operation not individualism.

According to F.W Taylor, “Scientific management is the art of knowing

exactly what you want men to do and seeing that they do it in the best and

the cheapest way”.

In order to implement the above principles, Taylor and hisassociates developed the following techniques:

1.

Time Study

a. It is a technique which enables the manager to ascertainstandard time taken for performing a specified job.

b. Every job or every part of it is studied in detail.c. This technique is based on the study of an average worker

having reasonable skill and ability.

d.

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

e. Taylor maintained that Fair day’s work should be determinedthrough observations, experiment and analysis by keeping inview an average worker.


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Standard Time × Working Hours = Fair Day’s Work

2.

Motion Study

a.

In this study, movement of body and limbs required to performa job are closely observed.

b. In other words, it refers to the study of movement of anoperator on machine involved in a particular task.

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

d. By undertaking motion study an attempt is made to knowwhether some elements of a job can be eliminated combined ortheir sequence can be changed to achieve necessary rhythm.

e. Motion study increases the efficiency and productivity ofworkers by cutting down all wasteful motions.

3. Functional Foremanship

a.

Taylor advocated functional foremanship for achieving ultimatespecification. b. This technique was developed to improve the quality of work as

single supervisor may not be an expert in all the aspects of thework.

c. Therefore workers are to be supervised by specialist foreman.


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d. The scheme of functional foremanship is an extension of principle pf specialization at the supervisory level.

e. Taylor advocated appointment of 8 foramen, 4 at the planning

level & other 4 at implementation level.f. The names & function of these specialist foremen are: -

Instruction card clerk concerned with tagging down ofinstructions according to which workers are required to

perform their job Time & cost clerk is concerned with setting a time table

for doing a job & specifying the material and labor costinvolved in it.

Route clerk determines the route through which rawmaterials has to be passed.

Shop Disciplinarians are concerned with making rulesand regulations to ensure discipline in the organization.

Gang boss makes the arrangement of workers, machines,tools, workers etc.

Speed boss concerned with maintaining the speed and toremove delays in the production process.

Repair boss concerned with maintenance of machine,tools and equipments.

Inspector is concerned with maintaining the quality of

product.

4.

Standardization

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

b. Taylor advocated that tools & equipments as well as workingconditions should be standardized to achieve standard outputfrom workers.

c.

Standardization is a means of achieving economics of production.

d. It seems to ensure – The line of product is restricted to predetermined type,

form, design, size, weight, quality. Etc


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There is manufacture of identical parts and components. Quality & standards have been maintained. Standard of performance are established for workers at

all levels.5.

Differential Piece Wage Plan

a. This tech of wage payment is based on efficiency of worker. b. The efficient workers are paid more wages than inefficient one.c. On the other hand, those workers who produce less than

standard no. of pieces are paid wages at lower rate than prevailing rate i.e. worker is penalized for his inefficiency.

d. This system is a source of incentive to workers who improvingtheir efficiency in order to get more wages.

e. It also encourages inefficient workers to improve their performance and achieve their standards.

f. It leads to mass production which minimizes cost andmaximizes profits.

g. 6. Other Techniques

a. Various other techniques have been developed to create ordealrelationship between management and workers and also tocreate better understanding on part of works.

b. Those includes use of instruction cards, strict rules &

regulations, graphs, slides, charts etc, so as to increaseefficiency of workers.

Critical evaluation

Although it is accepted that the scientific management enables themanagement to put resources to its best possible use and manner, yet it hasnot been spared of severe criticisms.

Workers Viewpoint:

1. Unemployment - Workers feel that management reduces employmentopportunities from them through replacement of men by machines and

by increasing human productivity less workers are needed to do workleading to chucking out from their jobs.


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2. Exploitation - Workers feel they are exploited as they are not givendue share in increasing profits which is due to their increased

productivity. Wages do not rise in proportion as rise in production.

Wage payment creates uncertainty & insecurity (beyond a standardoutput, there is no increase in wage rate).

3. Monotony - Due to excessive specialization the workers are not ableto take initiative on their own. Their status is reduced to being merecogs in wheel. Jobs become dull. Workers loose interest in jobs andderive little pleasure from work.

4. Weakening of Trade Union - To everything is fixed & predetermined by management. So it leaves no room for trade unionsto bargain as everything is standardized, standard output, standardworking conditions, standard time etc. This further weakens tradeunions, creates a rift between efficient & in efficient workersaccording to their wages.

5. Over speeding - the scientific management lays standard output, timeso they have to rush up and finish the work in time. These haveadverse effect on health of workers. The workers speed up to thatstandard output, so scientific management drives the workers to rushtowards output and finish work in standard time.

Employer's Viewpoint:

1. Expensive - Scientific management is a costly system and a hugeinvestment is required in establishment of planning dept.,standardization, work study, training of workers. It may be beyondreach of small firms. Heavy food investment leads to increase inoverhead costs.

2. Time Consuming - Scientific management requires mental revisionand complete reorganizing of organization. A lot of time is requiredfor work, study, standardization & specialization. During thisoverhauling of organization, the work suffers.

Some experts believe that Taylor’s contribution has been somewhat over-

emphasised .The originality of his ideas has been doubted. Business

managers have opposed the idea of replacing judgment with

prefabricated techniques. The term ‘scientific management’ is not


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acceptable to many persons, because it is nothing but a ‘scientific

approach to management’.

In the final analysis, Taylor made a lasting contribution to making jobsand their management more efficient and productive. Scientific

management was developed by engineers and scientists and their concern

for efficiency led to better methods and tools. Many of the Taylor’s

contributions provide the essence of modern management practice.

According to Peter Drucker scientific management is one of the great

liberating and pioneering insights. Without it a real study of human

beings at work would be impossible. Taylor laid the foundation of

modern management as a science. He is therefore, rightly known as thefather of scientific management.

ADMINISTRATIVE THEORY (1841-1925)

One of the first and the foremost contributor’s to administrative management

theory was Henry Fayol, a French industrialist. Fayol started his career as

mining engineer and later became a chief executive. He published his

famous book Administration Industrielle et Generale in 1916.It was

published in English under the title General and Industrial Management in

1949

Fayol's legacy is his generic Principles of Management. Of Fayol's sixgeneric activities for industrial undertakings (technical, commercial,financial, security, accounting, managerial), the most important were the fivefunctions of Management that focused on the key relationships between

personnel and its management.


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The Five Functions are:

PLANNING

Planning is the most basic or primary function of management. It precedes

other functions because a manager plans before he acts. Planning involves

determining the objectives and selecting a course of action to achieve them.

It implies looking ahead and deciding in advance what is to be done, when

and where it is to be done and by whom it is to be done. Planning is a mental

process requiring the use of intellectual faculties, foresight, imagination and

sound judgment. It consists of forecasting, decision-making and problem –

solving. A plan is a predetermined future course of action. Drawing up plans

of actions that combine unity, continuity, flexibility and precision given the

organisation's resources, type and significance of work and future trends.

Creating a plan of action is the most difficult of the five tasks and requires

the active participation of the entire organisation. Planning must be

coordinated on different levels and with different time horizons;

ORGANISING

Once plans are formulated, the next step is that of organizing. Organising isthe process of establishing harmonious authority-responsibility relationships

among the members of the enterprise. It is the function of creating a

structure of duties and responsibilities. The network of authority-

responsibility relationships is known as organization structure. Such a

structure serves as the framework within which people can work together

effectively for the accomplishment of common objectives.

According to Fayol, “To organize a business is to provide it with everything

useful to its functioning-raw materials, tools, capital and personnel”. Asound organisation helps to avoid duplication of work and overlapping of

effort. Providing capital, personnel and raw materials for the day-to-day

running of the business, and building a structure to match the work.

Organisational structure depends entirely on the number of employees. An


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increase in the number of functions expands the organisation horizontally

and promotes additional layers of supervision;

COMMANDING

Optimizing return from all employees in the interest of the entire enterprise.

Successful managers have personal integrity, communicate clearly and base

their judgments on regular audits. Their thorough knowledge of personnel

creates unity, energy, initiative and loyalty and eliminates incompetence;

COORDINATING

Unifying and harmonizing activities and efforts to maintain the balance between the activities of the organisation as in sales to production and procurement to production. Fayol recommended weekly conferences fordepartment heads to solve problems of common interest;

CONTROLLING

Identifying weaknesses and errors by controlling feedback, and conformingactivities with plans, policies and instructions. Fayol's management processwent further than Taylor's basic hierarchical model by allowing command

functions to operate efficiently and effectively through co-ordination andcontrol methods. For Fayol, the managing director overlooked a livingorganism that requires liaison officers and joint committees.

Fayol gave the following general principles of management:

1. Division of Work . Specialization allows the individual to build

up experience, and to continuously improve his skills. Thereby he can

be more productive.

2.

Authority. The right to issue commands, along with which

must go the balanced responsibility for its function.


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3. Discipline. Employees must obey, but this is two-sided:

employees will only obey orders if management play their part by

providing good leadership.

4. Unity of Command. Each worker should have only one boss

with no other conflicting lines of command.

5. Unity of Direction. People engaged in the same kind of

activities must have the same objectives in a single plan. This is

essential to ensure unity and coordination in the enterprise. Unity of

command does not exist without unity of direction but does not

necessarily flows from it.

6.

Subordination of individual interest (to the general interest).Management must see that the goals of the firms are always

paramount.

7. Remuneration. Payment is an important motivator although by

analyzing a number of possibilities, Fayol points out that there is no

such thing as a perfect system.

8. Centralization (or Decentralization). This is a matter of degree

depending on the condition of the business and the quality of its

personnel.

9. Scalar chain (Line of Authority). A hierarchy is necessary for

unity of direction. But lateral communication is also fundamental, as

long as superiors know that such communication is taking place.

Scalar chain refers to the number of levels in the hierarchy from the

ultimate authority to the lowest level in the organization. It should not

be over-stretched and consist of too-many levels.

10.

Order. Both material order and social order are necessary. Theformer minimizes lost time and useless handling of materials. The

latter is achieved through organization and selection.


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11. Equity. In running a business a ‘combination of kindliness and

justice’ is needed. Treating employees well is important to achieve

equity.

12. Stability of Tenure of Personnel. Employees work better if

job security and career progress are assured to them. An insecure

tenure and a high rate of employee turnover will affect the

organization adversely.

13. Initiative. Allowing all personnel to show their initiative in

some way is a source of strength for the organization. Even though it

may well involve a sacrifice of ‘personal vanity’ on the part of many

managers.14. Esprit de Corps. Management must foster the morale of its

employees. He further suggests that: “real talent is needed to

coordinate effort, encourage keenness, use each person’s abilities,

and reward each one’s merit without arousing possible jealousies and

disturbing harmonious relations.

BUREAUCRACY (1864-1920)

Max Weber, a German social scientist, analyzed the formation and

administration of public bureaucracies, which happen to be the oldest form

of organisation. Weber evolved an ideal type of bureaucracy’s a conceptual

model for analytical purposes. His model is characterized by the following

features:

1. Division of work . There is a high degree of specialization or division of

labor in a bureaucratic organisation. A task is divided into very specialized jobs and each member performs his specialized function in a predictable

manner.

2. Rul es and Regulations. Detailed and rigorous rules and regulations are

laid down to specify and govern the work behavior, rights and duties of job


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holders. There is rigid adherence to prescribed rules designed to ensure

consistency and predictability in work performance. Behavior is subject to

discipline and control within the framework of rules. In addition, procedures

are laid down for orderly performance of tasks.

3. Hierarchy of Authority. A clearly-defined hierarchy is created by

downward delegation of authority. There is distribution of formal position

authority to give commands needed for discharging duties at various levels.

Each position in the hierarchy covers an area over which it has complete

jurisdiction in terms of competence and authority.

4. Techni cal competence. Selection and promotion of job-holders are based

on their on their technical competence. Qualifications are prescribed for each

job/ position. Special training is given to provide knowledge of rules and

administrative procedures.

5. Record Keeping. Every decision and action is recorded in a wide array of

written documents and preserved in its original and draft form.

6. Impersonal relations. Relations among the members of a bureaucratic

organisation are impersonal and formal. Superiors adopt an impersonal

attitude in dealing with their subordinates.

Weber visualized bureaucracy as an ideal pattern of organisation because it

embodies the advantage of precision, efficiency, competence, objectivity,

unity, conformity, discipline and order. According to Weber, Bureaucracy

provides an ideal way for harnessing the human and mechanical energy.

Real life organisations, both private and public, exhibit varying degrees of

bureaucracy. Generally the degree of bureaucracy is higher in governmental

and military organisations than in private business and voluntary

organisations. Weber sought to improve the performance of socially

important organisations.His model has contributed to organizational thinking

but it has been criticized due to its inflexibility and its focus in impersonal

efficiency rather than on human values and needs.


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1.2 NEO-CLASSICAL APPROACH

Classical approach led to more efficient forms of organisation and

management. But it failed to recognize the overwhelming role of people inmanagement. Jobs became narrow and workers began to resist the formal

and impersonal treatment over-looking their social and psychological needs.

This resistance and the need to secure willing cooperation of workers led to

the development of neo-classical approach.

Neo-classical approach may be analysed in three parts namely, Hawthorne

Experiments, Human Relations Movement and Behavioral Approach.

Hawthorne Experiments

The Hawthorne Studies (also knows as the Hawthorne Experiments) were

conducted from 1927 to 1932 at the Western Electric Hawthorne Works in

Cicero, Illinois (a suburb of Chicago). This is where Professor Elton Mayo

examined the impact of work conditions in employee productivity. Elton

Mayo started these experiments by examining the physical and

environmental influences of the workplace (e.g. brightness of lights,

humidity) and later, moved into the psychological aspects (e.g. breaks, group

pressure, working hours, managerial leadership) and their impact on

employee motivation as it applies to productivity.

The Hawthorne Effect

In essence, the Hawthorne Effect, as it applies to the workplace, can besummarized as "Employees are more productive because theemployees know they are being studied." Elton Mayo's experiments showedan increase in worker productivity was produced by the psychological

stimulus of being singled out, involved, and made to feel important.Additionally, the act of measurement, itself, impacts the results of themeasurement. Just as dipping a thermometer into a vial of liquid can affectthe temperature of the liquid being measured, the act of collecting data,where none was collected before creates a situation that didn't exist before,thereby affecting the results.


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The Hawthorne Experiments and Employee Motivation

Elton Mayo's studies grew out of preliminary experiments at the Hawthorne

plant from 1924 to 1927 on the effect of light on productivity. Thoseexperiments showed no clear connection between productivity and theamount of illumination but researchers began to wonder what kind ofchanges would influence output.

Variables Affecting Productivity

Specifically, Elton Mayo wanted to find out what effect fatigue andmonotony had on job productivity and how to control them through suchvariables as rest breaks, work hours, temperature and humidity. In the

process, he stumbled upon a principle of human motivation that would helpto revolutionize the theory and practice of management.

Elton Mayo selected two women, and had those two select an additional fourfrom the assembly line, segregated them from the rest of the factory and putthem under the eye of a supervisor who was more a friendly observer thandisciplinarian. Mayo made frequent changes in their working conditions,always discussing and explaining the changes in advance.

Relay Assembly

The group was employed in assembling telephone relays - a relay being asmall but intricate mechanism composed of about forty separate parts whichhad to be assembled by the girls seated at a lone bench and dropped into achute when completed.

The relays were mechanically counted as they slipped down the chute. Theintent was to measure the basic rate of production before making anyenvironmental changes. Then, as changes were introduced, the impact to

effectiveness would be measured by increased or decreased production ofthe relays.


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Feedback mechanism

Throughout the series of experiments, an observer sat with the girls in the

workshop noting all that went on, keeping the girls informed about theexperiment, asking for advice or information, and listening to theircomplaints.

The experiment began by introducing various changes, each of which wascontinued for a test period of four to twelve weeks. The results of thesechanges are as follows:

Work Conditions and Productivity Results

Under normal conditions with a forty-eight hour week, including Saturdays,and no rest pauses. The girls produced 2,400 relays a week each.

1. They were then put on piecework for eight weeks.o Output increased

2. They were given two five-minute breaks, one in the morning, and onein the afternoon, for a period of five weeks.

o Output increased, yet again3. The breaks were each lengthened to ten minutes.

o Output rose sharply4.

Six five-minute breaks were introduced.o The girls complained that their work rhythm was broken by the

frequent pauseso Output fell only slightly

5. The original two breaks were reinstated, this time, with acomplimentary hot meal provided during the morning break.

o Output increased further still6. The workday was shortened to end at 4.30 p.m. instead of 5.00 p.m.

o Output increased

7.

The workday was shortened to end at 4.00 p.m.o Output leveled off

8. Finally, all the improvements were taken away, and the originalconditions before the experiment were reinstated. They weremonitored in this state for 12 more weeks.


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o Output was the highest ever recorded - averaging 3000 relays aweek

Elton Mayo's Conclusions on Job Performance

Elton Mayo came to the following conclusions as a result of the study:

The aptitudes of individuals are imperfect predictors of jobperformance. Although they give some indication of the physical andmental potential of the individual, the amount produced is stronglyinfluenced by social factors.

Informal organization affects productivity. The researchers

discovered a group life among the workers. The studies also

showed that the relations that supervisors develop with workers tendto influence the manner in which the workers carry out directives.

Work-group norms affect productivity. The Hawthorne researcherswere not the first to recognize that work groups tend to arrive atnorms of what is "a fair day's work." However, they provided the bestsystematic description and interpretation of this phenomenon.

The workplace is a social system. The researchers came to view theworkplace as a social system made up of interdependent parts. Theworker is a person whose attitudes and effectiveness are conditioned

by social demands from both inside and outside the work plant.Informal group within the work plant exercise strong social controlsover the work habits and attitudes of the individual worker.

The need for recognition, security and sense of belonging is moreimportant in determining workers' morale and productivity than the

physical conditions under which he works.

The major finding of the study was that almost regardless of theexperimental manipulation, worker production seemed to continuallyimprove. One reasonable conclusion is that the workers were happy to

receive attention from the researchers who expressed an interest in them.Originally, the study was expected to last one year, but since the findingswere inexplicable when the researchers tried to relate the worker's efficiencyto manipulated physical conditions, the project was incrementally extendedto five years.


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HUMAN RELATIONS MOVEMENT

Hawthorne Experiments laid the foundation for human relations movement

in management. Subsequent research contributed several concepts andtechniques of human relations. Human relations school is a socio

psychological approach to management. It suggests that a businessenterprise is asocial system in which group norms exercise significantinfluence on the behavior and performance of individuals. Workers cannot

be motivated by economic rewards alone. They require social satisfaction atthe workplace. Therefore, managers should create such a climate in theorganisation that worker can feel happy. Employee counseling, participativedecision making, cordial super vision, job enrichment and other techniqueshave been suggested for keeping workers happy and satisfied. According toKeith Davis, human relations is an area of management precise which isconcerned with the integration of people into a work situation in a way thatmotivates them to work together productively, cooperatively and withsatisfaction and achieve organizational goals.

The human relations school is based on the following ideas:

1. The Individual. According to the human relations school, each person isunique. He brings certain attitudes, beliefs, values, skills etc. to the job

situation. Therefore an individual is motivated by not only economic factors but by several social and psychological factors.

2. The Work Group. Work is a social experience and most workers findsatisfaction in social or informal groups. The norms of such groupsdetermine to a great extent the attitude and performance of workers.Therefore, managers should maintain good interpersonal and inter grouprelations to maximize productivity.

3. The leader. As the leader of a work group, a supervisor/manager should

provide a pleasant work climate wherein employees are allowed to have asay in the decision making process. He can gain respect and obedience byadjusting to various personalities and situations.

4. The work environment. A positive work environment enables employeesto satisfy their needs as well as to achieve organizational goals. Positive


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work environment consists of clearly defined goals, performance linkedrewards, feedback on performance, participative decision making,interesting and growth oriented work, open communications, etc.

BEHAVIORAL APPROACH

Human relations movement focused on interpersonal relations andoverlooked the wider subject of organizational behavior. Organisational

behavior involves the study of attitudes, behavior and performance ofindividuals and groups in organizational setting. Behavioral approachincludes the issue of organizational behavior. It is also known as humanresource approach because it stresses development of human beings for the

benefit of both the individual and the organisation.

The main propositions of behavioral science approach are as follows:

1. An organisation is a sociotechnical system

2. Individuals differ in terms of their attitudes, perceptions and valuesystems. Therefore they react differently to the same situation.

3. People working in an organisation have their needs and goals which maydiffer from the organisation’s needs and goals. Management should achievefusion between organizational goals and human needs.

4. A wide range of factors influence relations among people.

5. People’s behavior as individuals may be different from their behavior as

members of a group.

6. Person’s working together in an organisation form their own informalgroups. Such groups have their own norms, culture and communicationsystems.

7. Informal groups exercise a significant influence on the attitudes, behaviorand performance of employees.


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Thus behavioral approach is an extension and improvement of humanrelations movement. It has made significant contribution towards thedevelopment of management thought.


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1.3Systems approach to management

Just as human body is formed of different interdependent systems so is also

an organization. A change in any one of these systems may affect all orsome other systems to varying degrees. This ‘ripple effect’ influences the

effectiveness of the organization. To understand the interactions and theconsequences between the various systems of the organization the managersshould posses the ability to get a perspective view. Treating an organizationas formed of different systems is known as systems approach.Systems theory was first applied in the fields of science and engineering. It

also has found wide acceptance in the practice of management. A system can

be defined as essentially a set or assemblage of things interconnected or

interdependent, so as to form a complex unity. Cars, computers, televisionand radio sets are some examples of systems.

There are two major types of systems: closed and open. A closed system has

definite boundaries; it operates relatively independently and is not affected

by the environment outside the system. Stand by generator is an example of

a closed system. With its different systems working together in perfect

harmony the generator continues to supply power as long as it has sufficient

fuel supply without much regard to the external environment.

An open system as the name implies, is characterised by its interaction with

the external environment. Clearly, any business or other organization must

be described by an open-system model that includes interactions between the

enterprise and its external environment.


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Fig: Organization on an open system model

The above shown figure is self explanatory. One important mechanismwhich makes the system to adapt and adjust to the changing conditions of itsenvironment and to exercise control over its operations is ‘feedback’. As

explained thus far, systems approach of management provides an integralapproach to management. It views management in its totality. It helps inseeing the problems of the organization in wider perspective. This approachis more useful in managerial decision-making.Based on the systems approach, Talcot Parsons has suggested threemeaningful levels in the hierarchy of complex organisations: Technical,Organisational and Institutional.

The Technical Level is concerned with the actual production and distributionof products and services. It also includes activities like research anddevelopment, operation research and accounting.The Organisational Level coordinates and integrates work performance atthe technical level. It is concerned with obtaining the continued flow ofinputs into the system and maintaining the markets for the outputs from thesystem.

The Institutional Level is concerned with relating activities of theorganization to environmental system. It involves relating the organizationto the needs of the environment.

Feedback


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1.4 CONTINGENCY APPROACH

The contingency approach to management is based on the idea that there is

no one best way to manage and that to be effective, planning, organizing,leading, and controlling must be tailored to the particular circumstancesfaced by an organization. Managers have always asked questions such as"What is the right thing to do? Should we have a mechanistic or an organicstructure? A functional or divisional structure? Wide or narrow spans ofmanagement? Tall or flat organizational structures? Simple or complexcontrol and coordination mechanisms? Should we be centralized ordecentralized? Should we use task or people oriented leadership styles?What motivational approaches and incentive programs should we use?" Thecontingency approach to management (also called the situational approach)assumes that there is no universal answer to such questions becauseorganizations, people, and situations vary and change over time. Thus, theright thing to do depends on a complex variety of critical environmental andinternal contingencies.

Classical management theorists such as Henri Fayol and Frederick Tayloridentified and emphasized management principles that they believed wouldmake companies more successful. However, the classicists came under firein the 1950s and 1960s from management thinkers who believed that their

approach was inflexible and did not consider environmental contingencies.Although the criticisms were largely invalid (both Fayol and Taylor, forexample, recognized that situational factors were relevant), they spawnedwhat has come to be called the contingency school of management.Research conducted in the 1960s and 1970s focused on situational factorsthat affected the appropriate structure of organizations and the appropriateleadership styles for different situations. Although the contingency

perspective purports to apply to all aspects of management, and not justorganizing and leading, there has been little development of contingencyapproaches outside organization theory and leadership theory. The followingsections provide brief overviews of the contingency perspective as relevantto organization theory and leadership.


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CONTINGENCY PERSPECTIVE AND ORGANIZATION

THEORY

Environmental change and uncertainty, work technology, and the size of acompany are all identified as environmental factors impacting theeffectiveness of different organizational forms. According to thecontingency perspective, stable environments suggest mechanistic structuresthat emphasize centralization, formalization, standardization, andspecialization to achieve efficiency and consistency. Certainty and

predictability permit the use of policies, rules, and procedures to guidedecision making for routine tasks and problems. Unstable environmentssuggest organic structures which emphasize decentralization to achieve

flexibility and adaptability. Uncertainty and unpredictability require general problem solving methods for no routine tasks and problems. Paul Lawrenceand Jay Lorsch suggest that organizational units operating in differingenvironments develop different internal unit characteristics, and that thegreater the internal differences, the greater the need for coordination

between units.

Joan Woodward found that financially successful manufacturingorganizations with different types of work technologies (such as unit orsmall batch; large-batch or mass-production; or continuous-process) differed

in the number of management levels, span of management, and the degree ofworker specialization. She linked differences in organization to firm

performance and suggested that certain organizational forms wereappropriate for certain types of work technologies.

Organizational size is another contingency variable thought to impact theeffectiveness of different organizational forms. Small organizations can

behave informally while larger organizations tend to become moreformalized. The owner of a small organization may directly control mostthings, but large organizations require more complex and indirect controlmechanisms. Large organizations can have more specialized staff, units, and

jobs. Hence, a divisional structure is not appropriate for a small organization but may be for a large organization.


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In addition to the contingencies identified above, customer diversity and theglobalization of business may require product or service diversity, employeediversity, and even the creation of special units or divisions. Organizations

operating within the United States may have to adapt to variations in local,state, and federal laws and regulations. Organizations operatinginternationally may have to adapt their organizational structures, managerial

practices, and products or services to differing cultural values, expectations,and preferences. The availability of support institutions and the availabilityand cost of financial resources may influence an organization's decision to

produce or purchase new products. Economic conditions can affect anorganization's hiring and layoff practices as well as wage, salary, andincentive structures. Technological change can significantly affect anorganization. The use of robotics affects the level and types of skills neededin employees. Modern information technology both permits and requireschanges in communication and interaction patterns within and betweenorganizations.

1.5 MANAGEMENT AND MANAGERIAL ROLES

DEFINITIONS OF MANAGEMENT

Production or Efficiency-oriented Definitions:

Those who have put forward the concept of management as a source of

efficiency in organization have viewed that management is concerned with

generating efficiency in organizational settings.

Taylor has defined management as follows:

“Management is the art of knowing what you want to do and then

seeing that it is done in the best and cheapest way”

In a similar way, John Mee has defined management in terms of securingmaximum results when he views that:


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“ Management is the art of securing maximum results with minimum

effort so as to secure maximum prosperity and happiness for both

employer and employee and give the public the best possible service”.

Decision – oriented Definitions:

Decision-oriented definitions of management have been provided by

decision theorists who have seen management process in terms of decision

making. A decision – oriented definition of management has been provided

by Stanley Vance as follows:

“Management is simply the process of decision making and control

over the action of human beings for the expressed purpose ofattaining pre-determined goals”

The decision-oriented definition of management indicates that the basic

activity of a manager is to make decisions and enforce these decisions.

People-oriented Definitions:

Lawrence Appley has called management as personnel management and has

defined it as follows:

“ Management is the accomplishment of results through the efforts of

other people”.

Koontz has defined management in similar way when he says that:

“ Management is the art of getting things done through and with people in

formally organized groups”

Function-oriented Definitions:

These definitions put emphasis on the various functions performed by

managers in organizations. McFarland states that


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“ Management is defined for conceptual, theoretical, and analytical

purposes as that process by which managers create, direct, maintain and

operate purposive organizations through systematic, coordinated,

cooperative human efforts”.

Henry Fayol, an early management thinker, has elaborated these functions

more precisely when he defined management as follows:

“To manage is to forecast and to plan, to organize, to coordinate and to

control.”

MANAGERIAL ROLES

Henry Mintzberg has studied the work roles of the chief executive and has

categorized these roles into three areas. These areas are interpersonal

relationships, information processing and disseminating and decision

making. Each of these areas are further sub divided into various roles. These

roles are:

(A) Interpersonal Relationships

1. Manager’s role as a figurehead:

Manager’s act as symbolic figurehead performing social or legal obligations.

These duties include greeting visitors, signing legal documents, taking

important customer’s to lunch etc.

2. Manager’s leadership role:

Since a manager is responsible for the activities of his subordinates he must

motivate them to perform better. He must be an exemplary leader so that his

subordinates follow his directions and guidelines with respect anddedication.


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3. Manager’s role as a liaison officer :

In addition to their constant contact with their own subordinates and peers

,the manager’s must maintain a network of outside contacts in order toassess the external environment of competition, social changes or changes in

government rules and regulations.. An auto assembly plant supervisor may

telephone a tire supplier to determine the amount of inventory available for

next week; a prosecuting attorney may meet with the presiding judge and

defense attorney to discuss the use of motions and evidence in a libel trial; or

a college professor may meet with professors in a separate department on

campus to obtain information on a prospective doctoral student. Ultimately,

the liaison role enables a manager to develop a network for obtainingexternal information which can be useful for completing current and future

work activities

(B)

Information Processing

1. Manager’s role as a monitor :

A manager assumes the monitor role by continually scanning the

environment for information or activities and events that may identify

opportunities or threats to the functioning of the work unit. Much of the

manager's gathering of information is achieved through the network of

contacts that has been established through the interpersonal roles. Hearing

small talk at a banquet about a competitor's planned marketing program,

learning through casual conversation at a ball game about the negative

medical evaluation of an unsigned ball player, or daily reading of a business

periodical are all examples of the kinds of information gathering involved in

the monitor role.

2. Manager’s role as a disseminator of information:

The information a manager gathers as a monitor must be evaluated and

transmitted as appropriate to members of the organization. The transmittal of

information by a manager activates the disseminator role. Privileged


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information may be disseminated to subordinates, peers, or superiors in the

organization. The manager may inform the marketing vice-president about

the specific marketing strategy a competitor is planning to implement. A

baseball manager may inform the team owner that an impending trade

should be cancelled because of the unfavorable medical report on one of the

players. Or reading The Wall Street Journal may inform the manager that a

shipping strike is looming and thus enable her to inform subordinates that

temporary layoffs may occur next month.

3. Manager’s role as a spokesman:

Occasionally, a manager assumes the role of a spokesperson by speaking on

behalf of the work unit to people inside or outside the organization. This

might involve lobbying for critical resources or appealing to individuals who

have influence on activities that affect the work unit. A top manager asking

the board of directors to keep the work unit together during a reorganization

period or a corporate president speaking to a college audience on the role the

company plays in education would both constitute engaging in the

spokesperson role.

(C)

Decision Making

1. Manager’s role as an entrepreneur:

The entrepreneur role comes into action when the manager seeks to improve

the work unit. This can be accomplished by adapting new techniques to fit a

particular situation or modifying old techniques to improve individual or

group activity. Managers usually learn of new or innovative methods

through information gathered in the monitor role. As a result, a supervisor

purchases a new kiln which will shorten the drying process for ceramic tiles;

a director of a youth club trains staff in the use of personal computers to

increase file access; or a president establishes a new pension plan to improve

employee morale.


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2. Manager’s role as a conflict handler :

Whereas the entrepreneur role establishes the manager as the initiator of

change, the disturbance handler role establishes the manager as a responderto change. Organizations, unfortunately, do not run so smoothly that

managers are never called upon to respond to unwelcome pressures. In these

cases, the manager is required to act quickly to bring stability back to the

organization. A law partner must settle a disagreement among associates in

the firm on who will present a case before a judge; a personnel director must

negotiate with striking employees dissatisfied with the procedures for laying

off employees; or a cannery first-line manager must respond to a sudden

shortage of cans used to package perishable fruit because the supplier hasreneged on a contract.

3 . Manager’s role as resource all ocator :

When a manager is placed in the position of having to decide to whom and

in what quantity resources will be dispensed, the resource allocator role is

assumed. Resources may include money, time, power, equipment, or people.

During periods of resource abundance, this role can be easily performed by a

manager. In most cases, however, organizations operate under conditions of

resource scarcity; thus, decisions on the allocation of resources can be

critical for the success of the work unit, division, or organization. As a

decision maker, the manager must strive not only to appropriately match

resources with subordinates but also to ensure that the distribution of

resources is coordinated to effectively complete the task to be performed. An

office manager must provide secretaries with appropriate equipment to

generate and duplicate documents. A manager of a fast-food restaurant must

coordinate work shifts to have the maximum number of employees working

during the lunch hour. Corporate presidents may provide their administrative

assistants with decision-making responsibility for day-to-day matters.


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4. Manager’s role as negotiator:

In addition to decisions concerning organizational changes, disturbances,

and resources, the manager also enacts as a negotiator .The process ofnegotiation is possible only when an individual has the authority to commit

organizational resources. Hence, as managers move up the managerial

hierarchy and obtain control over more resources, they become more

involved in the negotiator role. For example, the president of a record

company may be called in to discuss terms of a possible contract with a

major rock group; a production manager must negotiate with the personnel

department to obtain employees with specialized skills; or a college dean

must negotiate with department heads over course offerings and the numberof faculty to be hired.

The relative emphasis a manager places on these ten roles is highly

dependent on the manager's authority and status in the organization. Length

of time on the job, position in the management hierarchy, goals of the

subunit to be achieved, and skills the manager possesses all play a part in

determining which roles are more prominent than others at any given time.

For instance, a marketing manager is more likely to emphasize the

interpersonal roles because of the importance of personal contact in themarketing process. A financial manager, charged with responsibility for the

economic efficiency of the organization, will probably focus on the

decisional roles. A staff manager, or a manager who performs in an advisory

capacity, is likely to be more heavily involved in the informational roles.

Regardless of the differences that may occur, however, all managers enact

interpersonal, informational, and decisional roles while performing their

tasks. Effectively managing an organization is a demanding task. Managers

not only must develop skills related to the functional areas of management but also must learn how to integrate these activities.

What makes this process demanding is that events and activities external and

internal to an organization can radically change the techniques and methods

managers must use in order to arrive at successful outcomes.


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Managers cannot afford to be limited in their view of management, nor can

they simply rely on how things were done in the past. Even the most

seasoned and successful managers are prone to mistakes. However, a more

complete knowledge of the managerial process can reduce the chances of

mistakes that will have dire consequences for an organization. Such

knowledge may help managers to better plan, organize and staff, direct, and

control organization activities within the context of their organization.

1.6 PRACTICE AND STUDY OF MANAGEMENT

Management is needed in all types and sizes of organisations, at all

organizational levels and in all organizational work areas, and in all

organizations, no matter what country they are located in. This is known as

the universality of management. Managers in all these settings will plan,

organize, lead and control. However, this is not to say that management is

done the same way. The differences in what a supervisor in a software

applications testing facility at Microsoft does versus what the CEO of

Microsoft does are a matter of degree and emphasis, not of function.

Because both are managers, both will plan, organize, lead and control but

how they do so will differ.

Since management is universally needed in all organisations, we have a

vested interest in improving the way organisations are managed. We interact

with organisations every single day of our lives.

Organizations that are well managed develop a loyal customer base, grow

and prosper. Those that are poorly managed find themselves with a declining

customer base and reduced revenues. By studying management one will be

able to recognize poor management and work to get it corrected. In additionone will be able to recognize good management and encourage it, whether

it’s in an organisation with which one is simply interacting or whether it’s in

an organisation in which one is employed.


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The Reality of Work:

Another reason for studying management is the reality that for most of us,

once we graduate from college and begin our career, we will either manageor be managed. For those who plan on management careers, an

understanding of the management process forms the foundation upon which

to build our management skills. For those of us who don’t see ourselves in a

management position, we are still likely to have to work with managers.

Also, assuming that we will have to work for a living and recognizing that

we are likely to work in an organisation, we’ll probably have some

managerial responsibilities even if one is not a manager. Our experience tells

us that one can gain a great deal of insight into the way one boss behavesand the internal workings of organisations by studying management. Our

point is that we don’t have to aspire to be a manager to gain something

valuable from a course in management.


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Rewards and Challenges of Being a Manager

The rewards and challenges of being a manager are as follows:

Rewards Challenges

Create a work environment inwhich organizationalmembers can work to the bestof their ability

Have opportunities to thinkcreatively and useimagination.

Have opportunities to thinkcreatively and useimagination.

Help others find meaning andfulfillmentIn work.

Support, coach, and nurtureothers.

Work with a variety of people.

Receive recognition and statusin organisation andcommunity.

Play a role in influencingorganizational outcomes

Receive appropriatecompensation in form of salaries,

bonuses and stock options.

Good managers are needed byorganisations.

Do hard work

Have to deal with a variety of personalities.

Often have to make do withlimited resources.

Motivate workers in chaoticand uncertain situations.

Successfully blend knowledge,skills, ambitions andexperiences of a diverse workgroup.

Success depends on other’s

work performance.


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Being a manager in today’s dynamic workplace provides many challenges. It

can be a tough and often thankless job. One may have to deal with a variety

of personalities and many times have to make do with limited resources. It

can be a challenge to motivate workers in the face of uncertainty and chaos.

And managers may find it difficult to effectively blend the

knowledge, skills, ambitions and experiences of a diverse group of

employees. Finally, as a manager, your success typically is dependent

upon other’s work performance.

Despite these challenges, being a manager can be very rewarding. One

is responsible for creating a work environment in which

organizational members can do their work to the best of their ability

and help the organisation achieve its goals. In addition as a manager

one often have the opportunity to think creatively and use one’s

imagination. A manager helps others find meaning and fulfillment in

their work. As a manager one gets to support, coach and nurture

others and help them make good decisions. One gets to meet and work

with a variety of people-both inside and outside the organisation.

Other rewards of being a manger may include receiving recognition

and status in the organisation and community, playing a role in

influencing organizational outcomes, and receiving attractive

compensation in the form of salaries, bonuses, and stock options.

Finally, organisations need good managers. Nothing great ever

happens by itself. It’s through the combined efforts of motivated and

passionate people that organisations accomplish their goals. As a

manager, one can get satisfaction from knowing that one’s efforts,

skills and abilities are needed.


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1.7Challenges of Management in the 21st century

Management has been around since the dawn of civilization. In primitive

societies almost everyone had to do physical labor. To escape this burden,about the only choices were going into politics (kings) or religion (priests).

Civilized urban societies led to more specialization, created new vocational

alternatives to manual labor, and saw a tendency of those who did not work

with their hands to look down on those who did. This particular attitude was

fostered by scribes, who used their knowledge of writing to produce

literature that mocked the illiterate laboring classes.

When we read that the Pharaoh build the PYRAMIDS, we know that in fact

that actual work was done by other people. As these laborers cut, moved,

and placed the stones, the first managers were there to tell them what to do,

to see that they did it, and to chastise those whose performance was

unsatisfactory.

Basically, these were the functions of managers until the twentieth century.

The apogee of this form of management was perhaps reached in late

nineteenth in the factory system. One can still visit the Boott Cotton MillsMuseum of in Lowell, Massachusetts to see how work and management

were organized then.

The Lowell mills were famous because instead of relying on immigrants,

they also recruited, hired, and provided dormitories for middle class young

women, selling the idea that employment and the money it brought were

socially acceptable and increased their marital prospects. Today one can

still read the work rules that these women had to follow. One stated that only

short sleeve dresses were permitted. This was because when the mill

managers saw employees talking instead of working, they would strike them

in the arm with a rattan. Long-sleeved dresses impeded the effectiveness of

this form of disciplinary action.


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The "hit them with a whip" school of management suffered a decline and fall

in the 20th century, though remnants still exist in various places in the world

and the wish for such methods still is expressed now and then even by

contemporary managers. Other methods of managing workers received

classical expression in Frederick Taylor’s Scientific Management in 1911.

Taylorism led to new management tools involving such techniques as

measurement and statistics.

What might be called the "efficiency expert" school of management was for

the most part supplanted around the 1960s by a more "humanistic" approach,

whose classical exponent was the psychologist Abraham Maslow. The

changes in management thinking in this decade reflected the more educatedworkforce and greater respect for democracy that grew out of World War II.

In the 1970s Robert Greenleaf invented Servant Leadership, and in the

1990s Peter Block carried this concept forward to Stewardship. These ideas

revolutionized the mental model for managers by suggesting that they

replace thinking about how to get people to do things with thinking about to

help people do things.

Best practice management concepts in the late 20th century also includedexcellence and total quality management, reengineering, systems thinking,

cross functional teams, empowerment and flat organization charts, learning

organization, dialogue, reinventing work, and diversity. As knowledge in

general increased with "Internet speed," management thought, already

heavily influenced by psychological sciences, and received infusions from

numerous disciplines. Moreover, cross-fertilization between academia and

the business community created a vast increase in management related

research activity.

Some of these trends – such as TQM and reengineering - seemed by 2000 to

have run their course. The permanent value of the new thinking underlying


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them, however, should not be denied; and 21st century versions of these

movements should actually be welcomed.

Others trends – such as learning and diversity – progressed to the pointwhere "second generation" (learning organization) or "new" (diversity)

versions appeared. In the early 21st century, it was even easy to see the

development of a "third wave" in these well-established concepts.

Just as the 21st century has seen new types of organizations and new ways

of doing business arise, so, too, will there be new management trends, ideas,

and techniques. While running after every trendy idea is hardly a

recommendable strategy, the wise manager will learn, study, and apply the best current thinking.

At the start of the 21st century, the following rate to be the most important

ideas regarding management:

Management is for everyone. As educational levels rise and information

technology accelerates, the distinction between "managers" and "workers"

will fade away and management knowledge will be everyone's

responsibility.

Management is for learners. As information becomes the chief product of

every business and as knowledge continues to explode, everyone will be a

learner and the manager's foremost task will to promote learning.

Management is based on communicating. As techniques for planning,

strategizing, decision-making, and problem solving become the common

province of everyone in the organization, the need for improving

communication will be paramount and managers will be increasingly usingdialogue and other communication tools.

Management is about change. As technology and information reshape all

our lives, change management will be "business as usual" and managers will


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be change agents who guide everyone to find and embrace the best new

practices.

Management is broad based. As boundaries disappear withinorganizations and in the world at large, the scope of management will grow

and managers will be organizational development experts, diversity experts,

facilitation experts, consultation experts – and much else.


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END CHAPTER QUIZZES

CHAPTER I QUIZZES

Q1.Which one of the following theories ignored the concept of leadership,

motivation, power and informal relations?

(a) Classical

(b) Behavioral

(c) Modern

Q2.Which theory states that there is no best way to manage all situations?

(a)System’s Theory

(b)Contingency theory

(c)Administrative Theory

Q3. The general conclusion of the Relay Assembly Test Room Experiments

was that employees would work better if the management was concerned

about their welfare and superiors paid special attention to them. This

phenomenon was subsequently labeled as the………..

(a)Relay effect

(b)Hawthorne effect

(c)Human effect


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Q4. Unlike Classical theorists who viewed organizations from a production

point of view, behavior theorists viewed it from the ………point of view.

(a)Human (b)Technical (c)Administrative

Q5. Weber coined the term …….to identify large organisations that operated

on a rational basis.

(a)Autocracy

(b)Diplomacy

(c)Bureaucracy

Q6. Management is:

(a) An Art(b) A Science(c) Both

Q7.Which of the following Fayol’s princi ples of management aims at

avoiding the possibility of conflicting orders?

(a)Well-defined hierarchy of authority

(b)Unity of Command

(c)Unity of Direction

Q8. Espirit de corps means

(a) Unity is strength(b) Buyer Beware

(c)

Service is our motto


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Q9. Time Study is a technique which enables the manager to ascertain

standard……

taken for performing a specified job.

(a)Time

(b)Units (c)Quantity

Q10.Who identified the three types of managerial roles, namely

interpersonal, informational and decision roles?

(a)Peter Drucker

(b)Henry Mintzberg

(c)Max Weber


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CHAPTER II

MANAGEMENT IN THE ERA OF CHANGE

CONTENTS

2.1 Multiple stakeholder Relationship

2.2 Ethics

2.3 Social Responsibility: - The modern challenges

2.4 Values

2.5 Values & Corporate Culture

2.1 Multiple Stakeholder Relationship

Organisation exist because of their ability to create value and acceptable

outcome for various groups of stakeholders, people who have an interest,claim, or stake in organisation, in what is does, and in how well performs. In

general, stakeholders are motivated to participate in an organisation if they

receive inducements exceed the value of the contributions they are required

to make. Inducements rewards such as money, power, and organisational

status. Contributions are the knowledge, and expertise that organisations

require of their members during the performance.

There are two main groups of organisational stakeholders: inside

stakeholders and outside stakeholders. The inducements and contributions ofeach group are summarized in table given below.


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Inside Stakeholders

Inside stakeholders are people who are closest to an organisation and have

the strongest or most direct claim on organisational resources: shareholders,managers, and the work force.

SHAREHOLDERS. Shareholders are the owners of the organisation, and,

as such, their claim on organisational resources is often considered superior

to the claims of other inside stakeholders. The shareholders’ contribution to

the organisation is to invest money in it by buying the organisation’s stock.

The shareholders’ inducement to invest is the prospective money they can

earn on their investment in the form of dividends and increase the price of

stock. Investments in stock are risky, however, because there is no guarantee

of a return. Shareholders who do not believe that the inducement (the

possible return on their investment) is enough to warrant their contribution

(the money they have invested) sell their shares and withdraw support from

the organisation.


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TABLE

INDUCEMENTS AND CONTRIBUTIONS OF ORGANISATIONAL

STALEHOLDERS

Stakeholder Contribution to the

Organisation

Inducement to

Contribute

INSIDE

Shareholders Money and capital Dividends and

appreciation

Managers Skills and expertise Salaries, bonuses, statusand power

Workforce Skills and expertise Wages, bonuses, stable

employment, and

promotion

OUTSIDE

Customers Revenue from purchase

of goods and services

Quality and price of

goods and services

Suppliers High- quality inputs Revenue from purchaseof inputs

Government Rules governing good

business practice

Fair and free

competition

Unions Free and fair collective

bargaining

Equitable share of

inducements

Community Social and economic

infrastructure

Revenue, taxes, and

employment

General public Customer loyalty andreputation

National pride


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MANAGERS. Managers are the employees who are responsible f

amf 101 organization theory and management

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