module 1 pom
TRANSCRIPT
MBA SEM-1
SUBJECTPRINCIPLES OF MANAGEMENT
MEANING OF MANAGEMENT
Management is the art of getting things or works done by a group of no of people with the effective utilization of available resources
These resources may be in the forms of men money materials amp machines Two or more persons form the body of managing any organization which perform jointly various functions in order to achieve the common objectives of the business organization
Based on above discussion and definitions given by many authors we may summarize
1) Management is a set of activities
2) Management is performed by group of people
3) This set of activities is executed by inputting various resources like men money materials machines technologies and many more
4) Management serves the achievement of common and specified goals of the group of people
5) Management is a dynamic process of understanding various functions like Planning
Organizing Staffing Directing Co-ordinating Reporting Budgeting (POSTCORB) and many more
DEFINITIONSPeter F Drucker defines it as ldquoManagement is an organ organs can be defined and described only through their functionsrdquo
According to Terry ldquoManagement is not people it is an activity like walking reading swimming or playing People who perform management can be designated as managers members of management or executive leadersrdquo
Henry Feyol defines as ldquoTo manage is to forecast and plan to organize to compound to coordinate and to controlrdquo
William Spriegal defines rdquoManagement as the functions of an enterprise which concerns itself with direction and control of various activities to attain business objectives Management is essentially an executive function it deals with the active direction of the human effortsrdquo
F W Taylor defines ldquoManagement is the art of knowing what you want to do and then seeing that it is done in the best and cheapest wayrdquo
Koontz and OrsquoDonnell defines ldquoManagement is the creation of and maintenance of an internal environment in an enterprise where individuals working in group can perform efficiently ampeffectively towards the attainment of group goals It is the art of getting the work done through and with people in formally organized grouprdquo
IMPORTANCE OF MANAGEMENT(1) ACCOMPLISHMENT OF COMMON GOALS
1048790 As discussed earlier an organization has predetermined specific goals or objectives
1048790 The execution of various functions to achieve such goals also leads to establish the common objectives among those persons executing these functions
1048790 Management provides an environment to accomplish such common goals by three factors as
under (i) Proper planning and availability of required resources
(ii) Trying to adjust the business activities to the surrounding external environment
(iii) Effective decision making process and controlling activities of business enterprise
(2) EFFECTIVE UTILIZATION OF RESOURCES
1048790 Management has to control 6 Ms to be considered as resources wise Men Machines Money
Materials Methods and Markets
1048790 Management tries to utilize all these resources in very effective and efficient way
1048790 Management decides and takes actions to arrange amp utilize very appropriate alternative of each
of these resources
3) MANAGEMENT INTEGRATES VARIOUS INTEREST GROUPS
1048790 Each person in an organization has his personal interest of working in that organization
1048790 But the organization has its own set of objectives
1048790 Management takes initiatives to integrate various interests of all individuals working in a group
to achieve organizations common objectives
(4) EFFECTIVE FUNCTIONING OF ORGANIZATION
1048790 Ability experience mutual understanding co-ordination motivation and supervision are some of the factors responsible for some of the effective functioning of business activities of an organization
1048790 Management ensures that the skills of managers and abilities of workers are effectively used and co-operation is obtained with the help of mutual understanding
1048790 Thus effective functioning of an organization is possible only with the efficient management
5) STRUCTURING THE ORGANIZATION
1048790 Management segregates different activities and tasks to be performed by different skills level of people
1048790 Management determines and assigns various responsibilities to perform these tasks separately but in such an established channel so that entire group of people is included
1048790 Thus sound organization structure clearly defines the authorities and responsibilities to be distributed and assigned among such group of people in an organization
(6) INCORPORATING INNOVATION
1048790 In the competitive phenomenon of changing technologies and social structure management develops new ideas
1048790 Such new ideas require to be incorporated to keep the organization alive and efficiently operating its business activities
1048790 Management achieves better performance by incorporating new ideas and innovation and that is how management is also called as dynamic
Features of management Management is an activity Management is a process It is required for every type of organization Management is required at all levels of
organization Management is goal oriented Management is intangible Management is dynamic Management is discipline
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
MEANING OF MANAGEMENT
Management is the art of getting things or works done by a group of no of people with the effective utilization of available resources
These resources may be in the forms of men money materials amp machines Two or more persons form the body of managing any organization which perform jointly various functions in order to achieve the common objectives of the business organization
Based on above discussion and definitions given by many authors we may summarize
1) Management is a set of activities
2) Management is performed by group of people
3) This set of activities is executed by inputting various resources like men money materials machines technologies and many more
4) Management serves the achievement of common and specified goals of the group of people
5) Management is a dynamic process of understanding various functions like Planning
Organizing Staffing Directing Co-ordinating Reporting Budgeting (POSTCORB) and many more
DEFINITIONSPeter F Drucker defines it as ldquoManagement is an organ organs can be defined and described only through their functionsrdquo
According to Terry ldquoManagement is not people it is an activity like walking reading swimming or playing People who perform management can be designated as managers members of management or executive leadersrdquo
Henry Feyol defines as ldquoTo manage is to forecast and plan to organize to compound to coordinate and to controlrdquo
William Spriegal defines rdquoManagement as the functions of an enterprise which concerns itself with direction and control of various activities to attain business objectives Management is essentially an executive function it deals with the active direction of the human effortsrdquo
F W Taylor defines ldquoManagement is the art of knowing what you want to do and then seeing that it is done in the best and cheapest wayrdquo
Koontz and OrsquoDonnell defines ldquoManagement is the creation of and maintenance of an internal environment in an enterprise where individuals working in group can perform efficiently ampeffectively towards the attainment of group goals It is the art of getting the work done through and with people in formally organized grouprdquo
IMPORTANCE OF MANAGEMENT(1) ACCOMPLISHMENT OF COMMON GOALS
1048790 As discussed earlier an organization has predetermined specific goals or objectives
1048790 The execution of various functions to achieve such goals also leads to establish the common objectives among those persons executing these functions
1048790 Management provides an environment to accomplish such common goals by three factors as
under (i) Proper planning and availability of required resources
(ii) Trying to adjust the business activities to the surrounding external environment
(iii) Effective decision making process and controlling activities of business enterprise
(2) EFFECTIVE UTILIZATION OF RESOURCES
1048790 Management has to control 6 Ms to be considered as resources wise Men Machines Money
Materials Methods and Markets
1048790 Management tries to utilize all these resources in very effective and efficient way
1048790 Management decides and takes actions to arrange amp utilize very appropriate alternative of each
of these resources
3) MANAGEMENT INTEGRATES VARIOUS INTEREST GROUPS
1048790 Each person in an organization has his personal interest of working in that organization
1048790 But the organization has its own set of objectives
1048790 Management takes initiatives to integrate various interests of all individuals working in a group
to achieve organizations common objectives
(4) EFFECTIVE FUNCTIONING OF ORGANIZATION
1048790 Ability experience mutual understanding co-ordination motivation and supervision are some of the factors responsible for some of the effective functioning of business activities of an organization
1048790 Management ensures that the skills of managers and abilities of workers are effectively used and co-operation is obtained with the help of mutual understanding
1048790 Thus effective functioning of an organization is possible only with the efficient management
5) STRUCTURING THE ORGANIZATION
1048790 Management segregates different activities and tasks to be performed by different skills level of people
1048790 Management determines and assigns various responsibilities to perform these tasks separately but in such an established channel so that entire group of people is included
1048790 Thus sound organization structure clearly defines the authorities and responsibilities to be distributed and assigned among such group of people in an organization
(6) INCORPORATING INNOVATION
1048790 In the competitive phenomenon of changing technologies and social structure management develops new ideas
1048790 Such new ideas require to be incorporated to keep the organization alive and efficiently operating its business activities
1048790 Management achieves better performance by incorporating new ideas and innovation and that is how management is also called as dynamic
Features of management Management is an activity Management is a process It is required for every type of organization Management is required at all levels of
organization Management is goal oriented Management is intangible Management is dynamic Management is discipline
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Based on above discussion and definitions given by many authors we may summarize
1) Management is a set of activities
2) Management is performed by group of people
3) This set of activities is executed by inputting various resources like men money materials machines technologies and many more
4) Management serves the achievement of common and specified goals of the group of people
5) Management is a dynamic process of understanding various functions like Planning
Organizing Staffing Directing Co-ordinating Reporting Budgeting (POSTCORB) and many more
DEFINITIONSPeter F Drucker defines it as ldquoManagement is an organ organs can be defined and described only through their functionsrdquo
According to Terry ldquoManagement is not people it is an activity like walking reading swimming or playing People who perform management can be designated as managers members of management or executive leadersrdquo
Henry Feyol defines as ldquoTo manage is to forecast and plan to organize to compound to coordinate and to controlrdquo
William Spriegal defines rdquoManagement as the functions of an enterprise which concerns itself with direction and control of various activities to attain business objectives Management is essentially an executive function it deals with the active direction of the human effortsrdquo
F W Taylor defines ldquoManagement is the art of knowing what you want to do and then seeing that it is done in the best and cheapest wayrdquo
Koontz and OrsquoDonnell defines ldquoManagement is the creation of and maintenance of an internal environment in an enterprise where individuals working in group can perform efficiently ampeffectively towards the attainment of group goals It is the art of getting the work done through and with people in formally organized grouprdquo
IMPORTANCE OF MANAGEMENT(1) ACCOMPLISHMENT OF COMMON GOALS
1048790 As discussed earlier an organization has predetermined specific goals or objectives
1048790 The execution of various functions to achieve such goals also leads to establish the common objectives among those persons executing these functions
1048790 Management provides an environment to accomplish such common goals by three factors as
under (i) Proper planning and availability of required resources
(ii) Trying to adjust the business activities to the surrounding external environment
(iii) Effective decision making process and controlling activities of business enterprise
(2) EFFECTIVE UTILIZATION OF RESOURCES
1048790 Management has to control 6 Ms to be considered as resources wise Men Machines Money
Materials Methods and Markets
1048790 Management tries to utilize all these resources in very effective and efficient way
1048790 Management decides and takes actions to arrange amp utilize very appropriate alternative of each
of these resources
3) MANAGEMENT INTEGRATES VARIOUS INTEREST GROUPS
1048790 Each person in an organization has his personal interest of working in that organization
1048790 But the organization has its own set of objectives
1048790 Management takes initiatives to integrate various interests of all individuals working in a group
to achieve organizations common objectives
(4) EFFECTIVE FUNCTIONING OF ORGANIZATION
1048790 Ability experience mutual understanding co-ordination motivation and supervision are some of the factors responsible for some of the effective functioning of business activities of an organization
1048790 Management ensures that the skills of managers and abilities of workers are effectively used and co-operation is obtained with the help of mutual understanding
1048790 Thus effective functioning of an organization is possible only with the efficient management
5) STRUCTURING THE ORGANIZATION
1048790 Management segregates different activities and tasks to be performed by different skills level of people
1048790 Management determines and assigns various responsibilities to perform these tasks separately but in such an established channel so that entire group of people is included
1048790 Thus sound organization structure clearly defines the authorities and responsibilities to be distributed and assigned among such group of people in an organization
(6) INCORPORATING INNOVATION
1048790 In the competitive phenomenon of changing technologies and social structure management develops new ideas
1048790 Such new ideas require to be incorporated to keep the organization alive and efficiently operating its business activities
1048790 Management achieves better performance by incorporating new ideas and innovation and that is how management is also called as dynamic
Features of management Management is an activity Management is a process It is required for every type of organization Management is required at all levels of
organization Management is goal oriented Management is intangible Management is dynamic Management is discipline
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
DEFINITIONSPeter F Drucker defines it as ldquoManagement is an organ organs can be defined and described only through their functionsrdquo
According to Terry ldquoManagement is not people it is an activity like walking reading swimming or playing People who perform management can be designated as managers members of management or executive leadersrdquo
Henry Feyol defines as ldquoTo manage is to forecast and plan to organize to compound to coordinate and to controlrdquo
William Spriegal defines rdquoManagement as the functions of an enterprise which concerns itself with direction and control of various activities to attain business objectives Management is essentially an executive function it deals with the active direction of the human effortsrdquo
F W Taylor defines ldquoManagement is the art of knowing what you want to do and then seeing that it is done in the best and cheapest wayrdquo
Koontz and OrsquoDonnell defines ldquoManagement is the creation of and maintenance of an internal environment in an enterprise where individuals working in group can perform efficiently ampeffectively towards the attainment of group goals It is the art of getting the work done through and with people in formally organized grouprdquo
IMPORTANCE OF MANAGEMENT(1) ACCOMPLISHMENT OF COMMON GOALS
1048790 As discussed earlier an organization has predetermined specific goals or objectives
1048790 The execution of various functions to achieve such goals also leads to establish the common objectives among those persons executing these functions
1048790 Management provides an environment to accomplish such common goals by three factors as
under (i) Proper planning and availability of required resources
(ii) Trying to adjust the business activities to the surrounding external environment
(iii) Effective decision making process and controlling activities of business enterprise
(2) EFFECTIVE UTILIZATION OF RESOURCES
1048790 Management has to control 6 Ms to be considered as resources wise Men Machines Money
Materials Methods and Markets
1048790 Management tries to utilize all these resources in very effective and efficient way
1048790 Management decides and takes actions to arrange amp utilize very appropriate alternative of each
of these resources
3) MANAGEMENT INTEGRATES VARIOUS INTEREST GROUPS
1048790 Each person in an organization has his personal interest of working in that organization
1048790 But the organization has its own set of objectives
1048790 Management takes initiatives to integrate various interests of all individuals working in a group
to achieve organizations common objectives
(4) EFFECTIVE FUNCTIONING OF ORGANIZATION
1048790 Ability experience mutual understanding co-ordination motivation and supervision are some of the factors responsible for some of the effective functioning of business activities of an organization
1048790 Management ensures that the skills of managers and abilities of workers are effectively used and co-operation is obtained with the help of mutual understanding
1048790 Thus effective functioning of an organization is possible only with the efficient management
5) STRUCTURING THE ORGANIZATION
1048790 Management segregates different activities and tasks to be performed by different skills level of people
1048790 Management determines and assigns various responsibilities to perform these tasks separately but in such an established channel so that entire group of people is included
1048790 Thus sound organization structure clearly defines the authorities and responsibilities to be distributed and assigned among such group of people in an organization
(6) INCORPORATING INNOVATION
1048790 In the competitive phenomenon of changing technologies and social structure management develops new ideas
1048790 Such new ideas require to be incorporated to keep the organization alive and efficiently operating its business activities
1048790 Management achieves better performance by incorporating new ideas and innovation and that is how management is also called as dynamic
Features of management Management is an activity Management is a process It is required for every type of organization Management is required at all levels of
organization Management is goal oriented Management is intangible Management is dynamic Management is discipline
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
William Spriegal defines rdquoManagement as the functions of an enterprise which concerns itself with direction and control of various activities to attain business objectives Management is essentially an executive function it deals with the active direction of the human effortsrdquo
F W Taylor defines ldquoManagement is the art of knowing what you want to do and then seeing that it is done in the best and cheapest wayrdquo
Koontz and OrsquoDonnell defines ldquoManagement is the creation of and maintenance of an internal environment in an enterprise where individuals working in group can perform efficiently ampeffectively towards the attainment of group goals It is the art of getting the work done through and with people in formally organized grouprdquo
IMPORTANCE OF MANAGEMENT(1) ACCOMPLISHMENT OF COMMON GOALS
1048790 As discussed earlier an organization has predetermined specific goals or objectives
1048790 The execution of various functions to achieve such goals also leads to establish the common objectives among those persons executing these functions
1048790 Management provides an environment to accomplish such common goals by three factors as
under (i) Proper planning and availability of required resources
(ii) Trying to adjust the business activities to the surrounding external environment
(iii) Effective decision making process and controlling activities of business enterprise
(2) EFFECTIVE UTILIZATION OF RESOURCES
1048790 Management has to control 6 Ms to be considered as resources wise Men Machines Money
Materials Methods and Markets
1048790 Management tries to utilize all these resources in very effective and efficient way
1048790 Management decides and takes actions to arrange amp utilize very appropriate alternative of each
of these resources
3) MANAGEMENT INTEGRATES VARIOUS INTEREST GROUPS
1048790 Each person in an organization has his personal interest of working in that organization
1048790 But the organization has its own set of objectives
1048790 Management takes initiatives to integrate various interests of all individuals working in a group
to achieve organizations common objectives
(4) EFFECTIVE FUNCTIONING OF ORGANIZATION
1048790 Ability experience mutual understanding co-ordination motivation and supervision are some of the factors responsible for some of the effective functioning of business activities of an organization
1048790 Management ensures that the skills of managers and abilities of workers are effectively used and co-operation is obtained with the help of mutual understanding
1048790 Thus effective functioning of an organization is possible only with the efficient management
5) STRUCTURING THE ORGANIZATION
1048790 Management segregates different activities and tasks to be performed by different skills level of people
1048790 Management determines and assigns various responsibilities to perform these tasks separately but in such an established channel so that entire group of people is included
1048790 Thus sound organization structure clearly defines the authorities and responsibilities to be distributed and assigned among such group of people in an organization
(6) INCORPORATING INNOVATION
1048790 In the competitive phenomenon of changing technologies and social structure management develops new ideas
1048790 Such new ideas require to be incorporated to keep the organization alive and efficiently operating its business activities
1048790 Management achieves better performance by incorporating new ideas and innovation and that is how management is also called as dynamic
Features of management Management is an activity Management is a process It is required for every type of organization Management is required at all levels of
organization Management is goal oriented Management is intangible Management is dynamic Management is discipline
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
IMPORTANCE OF MANAGEMENT(1) ACCOMPLISHMENT OF COMMON GOALS
1048790 As discussed earlier an organization has predetermined specific goals or objectives
1048790 The execution of various functions to achieve such goals also leads to establish the common objectives among those persons executing these functions
1048790 Management provides an environment to accomplish such common goals by three factors as
under (i) Proper planning and availability of required resources
(ii) Trying to adjust the business activities to the surrounding external environment
(iii) Effective decision making process and controlling activities of business enterprise
(2) EFFECTIVE UTILIZATION OF RESOURCES
1048790 Management has to control 6 Ms to be considered as resources wise Men Machines Money
Materials Methods and Markets
1048790 Management tries to utilize all these resources in very effective and efficient way
1048790 Management decides and takes actions to arrange amp utilize very appropriate alternative of each
of these resources
3) MANAGEMENT INTEGRATES VARIOUS INTEREST GROUPS
1048790 Each person in an organization has his personal interest of working in that organization
1048790 But the organization has its own set of objectives
1048790 Management takes initiatives to integrate various interests of all individuals working in a group
to achieve organizations common objectives
(4) EFFECTIVE FUNCTIONING OF ORGANIZATION
1048790 Ability experience mutual understanding co-ordination motivation and supervision are some of the factors responsible for some of the effective functioning of business activities of an organization
1048790 Management ensures that the skills of managers and abilities of workers are effectively used and co-operation is obtained with the help of mutual understanding
1048790 Thus effective functioning of an organization is possible only with the efficient management
5) STRUCTURING THE ORGANIZATION
1048790 Management segregates different activities and tasks to be performed by different skills level of people
1048790 Management determines and assigns various responsibilities to perform these tasks separately but in such an established channel so that entire group of people is included
1048790 Thus sound organization structure clearly defines the authorities and responsibilities to be distributed and assigned among such group of people in an organization
(6) INCORPORATING INNOVATION
1048790 In the competitive phenomenon of changing technologies and social structure management develops new ideas
1048790 Such new ideas require to be incorporated to keep the organization alive and efficiently operating its business activities
1048790 Management achieves better performance by incorporating new ideas and innovation and that is how management is also called as dynamic
Features of management Management is an activity Management is a process It is required for every type of organization Management is required at all levels of
organization Management is goal oriented Management is intangible Management is dynamic Management is discipline
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
(2) EFFECTIVE UTILIZATION OF RESOURCES
1048790 Management has to control 6 Ms to be considered as resources wise Men Machines Money
Materials Methods and Markets
1048790 Management tries to utilize all these resources in very effective and efficient way
1048790 Management decides and takes actions to arrange amp utilize very appropriate alternative of each
of these resources
3) MANAGEMENT INTEGRATES VARIOUS INTEREST GROUPS
1048790 Each person in an organization has his personal interest of working in that organization
1048790 But the organization has its own set of objectives
1048790 Management takes initiatives to integrate various interests of all individuals working in a group
to achieve organizations common objectives
(4) EFFECTIVE FUNCTIONING OF ORGANIZATION
1048790 Ability experience mutual understanding co-ordination motivation and supervision are some of the factors responsible for some of the effective functioning of business activities of an organization
1048790 Management ensures that the skills of managers and abilities of workers are effectively used and co-operation is obtained with the help of mutual understanding
1048790 Thus effective functioning of an organization is possible only with the efficient management
5) STRUCTURING THE ORGANIZATION
1048790 Management segregates different activities and tasks to be performed by different skills level of people
1048790 Management determines and assigns various responsibilities to perform these tasks separately but in such an established channel so that entire group of people is included
1048790 Thus sound organization structure clearly defines the authorities and responsibilities to be distributed and assigned among such group of people in an organization
(6) INCORPORATING INNOVATION
1048790 In the competitive phenomenon of changing technologies and social structure management develops new ideas
1048790 Such new ideas require to be incorporated to keep the organization alive and efficiently operating its business activities
1048790 Management achieves better performance by incorporating new ideas and innovation and that is how management is also called as dynamic
Features of management Management is an activity Management is a process It is required for every type of organization Management is required at all levels of
organization Management is goal oriented Management is intangible Management is dynamic Management is discipline
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
3) MANAGEMENT INTEGRATES VARIOUS INTEREST GROUPS
1048790 Each person in an organization has his personal interest of working in that organization
1048790 But the organization has its own set of objectives
1048790 Management takes initiatives to integrate various interests of all individuals working in a group
to achieve organizations common objectives
(4) EFFECTIVE FUNCTIONING OF ORGANIZATION
1048790 Ability experience mutual understanding co-ordination motivation and supervision are some of the factors responsible for some of the effective functioning of business activities of an organization
1048790 Management ensures that the skills of managers and abilities of workers are effectively used and co-operation is obtained with the help of mutual understanding
1048790 Thus effective functioning of an organization is possible only with the efficient management
5) STRUCTURING THE ORGANIZATION
1048790 Management segregates different activities and tasks to be performed by different skills level of people
1048790 Management determines and assigns various responsibilities to perform these tasks separately but in such an established channel so that entire group of people is included
1048790 Thus sound organization structure clearly defines the authorities and responsibilities to be distributed and assigned among such group of people in an organization
(6) INCORPORATING INNOVATION
1048790 In the competitive phenomenon of changing technologies and social structure management develops new ideas
1048790 Such new ideas require to be incorporated to keep the organization alive and efficiently operating its business activities
1048790 Management achieves better performance by incorporating new ideas and innovation and that is how management is also called as dynamic
Features of management Management is an activity Management is a process It is required for every type of organization Management is required at all levels of
organization Management is goal oriented Management is intangible Management is dynamic Management is discipline
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
(4) EFFECTIVE FUNCTIONING OF ORGANIZATION
1048790 Ability experience mutual understanding co-ordination motivation and supervision are some of the factors responsible for some of the effective functioning of business activities of an organization
1048790 Management ensures that the skills of managers and abilities of workers are effectively used and co-operation is obtained with the help of mutual understanding
1048790 Thus effective functioning of an organization is possible only with the efficient management
5) STRUCTURING THE ORGANIZATION
1048790 Management segregates different activities and tasks to be performed by different skills level of people
1048790 Management determines and assigns various responsibilities to perform these tasks separately but in such an established channel so that entire group of people is included
1048790 Thus sound organization structure clearly defines the authorities and responsibilities to be distributed and assigned among such group of people in an organization
(6) INCORPORATING INNOVATION
1048790 In the competitive phenomenon of changing technologies and social structure management develops new ideas
1048790 Such new ideas require to be incorporated to keep the organization alive and efficiently operating its business activities
1048790 Management achieves better performance by incorporating new ideas and innovation and that is how management is also called as dynamic
Features of management Management is an activity Management is a process It is required for every type of organization Management is required at all levels of
organization Management is goal oriented Management is intangible Management is dynamic Management is discipline
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
5) STRUCTURING THE ORGANIZATION
1048790 Management segregates different activities and tasks to be performed by different skills level of people
1048790 Management determines and assigns various responsibilities to perform these tasks separately but in such an established channel so that entire group of people is included
1048790 Thus sound organization structure clearly defines the authorities and responsibilities to be distributed and assigned among such group of people in an organization
(6) INCORPORATING INNOVATION
1048790 In the competitive phenomenon of changing technologies and social structure management develops new ideas
1048790 Such new ideas require to be incorporated to keep the organization alive and efficiently operating its business activities
1048790 Management achieves better performance by incorporating new ideas and innovation and that is how management is also called as dynamic
Features of management Management is an activity Management is a process It is required for every type of organization Management is required at all levels of
organization Management is goal oriented Management is intangible Management is dynamic Management is discipline
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
(6) INCORPORATING INNOVATION
1048790 In the competitive phenomenon of changing technologies and social structure management develops new ideas
1048790 Such new ideas require to be incorporated to keep the organization alive and efficiently operating its business activities
1048790 Management achieves better performance by incorporating new ideas and innovation and that is how management is also called as dynamic
Features of management Management is an activity Management is a process It is required for every type of organization Management is required at all levels of
organization Management is goal oriented Management is intangible Management is dynamic Management is discipline
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Features of management Management is an activity Management is a process It is required for every type of organization Management is required at all levels of
organization Management is goal oriented Management is intangible Management is dynamic Management is discipline
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Objectives of management To achieve goal of organization Promote effectiveness Develop the ability of managers Human welfare Social welfare Interaction with environment
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Management as an activity Interpersonal role Informational role Decisional role
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Management as a process Planning Organizing Leading Controlling
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Other aspects of management Management as a discipline
Management as a group
Management as an economic resource
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
MANAGEMENT- A SCIENCE OR AN ART
Management As Science Management As Science Management as Science believes that there are ideal managerial Management as Science believes that there are ideal managerial practices for certain situationspractices for certain situations
Manager with scientific approach will expect that there is a rational Manager with scientific approach will expect that there is a rational and objective way to determine the correct course of action for any and objective way to determine the correct course of action for any problemproblem
They follow general principles and theoriesThey follow general principles and theories
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
cont Clarity of concept Scientific methods Clarity of theory Casual relationship Systematized theory of knowledge Universal application
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Management as an ArtManagement as an ArtManagers are likely to rely on social amp political environment Managers are likely to rely on social amp political environment surrounding the managerial issuessurrounding the managerial issues
Use their knowledge and skills for a particular situation Use their knowledge and skills for a particular situation determines course of actiondetermines course of action
Requires more than a mastery of techniques and skillsRequires more than a mastery of techniques and skills
Requires managers to understand individual their motivation and Requires managers to understand individual their motivation and help them achieve their goalhelp them achieve their goal
Combining management and leadership into practiceCombining management and leadership into practice
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
It is such as it deals with fundamentals of knowledge It is such as it deals with fundamentals of knowledge wisdom and leadership but because it is also wisdom and leadership but because it is also concerned with practice and applicationconcerned with practice and application
Management is more of an art as scientific ldquofactsrdquo do Management is more of an art as scientific ldquofactsrdquo do not remain stable over timenot remain stable over time
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Cont Artistrsquos vision Knowledge Communication Creativity Skilled performance Practice
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Management is both a science and an art
As science it is based on principles amp theories on the basis of which managers act and as Art it deals with decision making process through application of practical amp personal skills
ldquoThe art of management begins where science of management endsrdquo
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
ADMINISTRATION amp MANAGEMENT
bullThis conflict was 1st raised by Oliver Sheldon in his book ldquothe Philosophy of Managementrdquo in 1923
bullThree approaches
-Administration is above Management
-Administration is a part of Management
-Administration amp Management are same
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
ADMINISTRATION IS ABOVE MANAGEMENT
Administration is that phase of a business enterprise that concerns itself with the overall determination of institutional objectives amp the policies necessary to be followed in achieving those objectives Management on other hand is an executive function which is primarily concerned with carrying out broad policies laid down by administration -- Spriegel
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
ADMINISTRATION IS PART OF MANAGEMENT
bullManagement is process of executive control in commerce entailing responsibility for the effective and planning amp regulation of the operation of an enterprise in fulfilling of given task
bullwhile Administration is that part of management which is concerned with installation amp carrying out of the procedures and process of activities regulated amp checked against plans-- Brech
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
MANAGEMENT amp ADMINISTRATION ARE SAME
bullBoth involve same functions principles amp objectives
-administrative management
-operative management
bullAll undertakings require planning organizing commanding coordinating amp controlling in order to function properly--- Henry Fayol
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Administration
Mgmt
Functions in Organization
Org-al levels
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Difference between Adm amp Mgmt
Basis of Diff Administration
Mgmt
Level of Org Top level Middle or lower level
Major focus Policy formulation
Policy execution
Scope of functions
Broad amp conceptual
Narrow amp operational
Factors affecting decisions
External Internal
Qualities require Administrative Technical
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Levels of management
The term lsquolevels of managementrsquo refers to a line of demarcation between various managerial positions In a large organisation three levels of management are usually identified
(i) Top level management
(ii) Middle level management and
(iii) Lower level management
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Levels of management Difference
Point of Distinction Top Level Management
Middle Level Management
Lower Level Management
Action focus A small group of policy makers deciding the fate of an organisation
Act as a connecting link between top and lower level people and manage activities of other managers
These managers are in direct contact with employees
Representation Chief Executive Officer President Chairman Managing Director bod etc
Functional Heads (Marketing Manager Personnel Manager etc) and immediate subordinates
Section Head Supervisor First-Line manager etc
Nature of work They generally spend most of their time with peers outsiders and to a lesser extent subordinates A top managerrsquos schedule is typically hectic
Middle managers compared to supervisors are far less physically active and far more involved in paper work and meetings Their job is less hectic more reflective and more frustrating
Generally physically active experience frequent interruption often shift back and forth between tasks and spend most of their time with subordinates and peers caring for monetary problems
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Time Spent in Carrying Out Managerial Functions
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Skills and Management Levels
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Managerial skills
In order to be effective a manager must possess and continuously
develop several essential skills Basic types of skills which are needed
by all managersndash
Technical skill
Human skill
Conceptual skill
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Functions of Management
Planning
Organizing
Staffing
directing
Controlling
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Management theories Pre scientific management theory
classical theory
-Taylorrsquos scientific management theory-Fayolrsquos administrative management
theory-weberrsquos bureaucracy theory
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Behavioral theory-Human relation theory-behavioral science theory
Modern management theory-Quantitative theory-system theory-contingency theory-operational theory
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Pre scientific theorybullcharles babbage forrunner of scientific management emphasised on work specialization
bullJames montogmery focused on importance of planning organizing and controlling of business
bull18th century emphasis on systematic adm amp effective utilisation of resources
bull19th century Robert Owens emphasised on personal aspects in Mgmt amp advocate no of benefits to employees he is considered as a father of personnel management
bullAndrew Ure believed that managers could learn morale by imparting them training and morale education
bullCharles Dupin said that it is not enough to provide only technical knowledge to managers but they needed management skills
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Cont
EVALUATION
bull Mgmt practice is as old as human civilizations
bull Belief that managersrs are born amp not made
bull World war I ndash people started thinking of solution to the problem of how ltd resources could be applied in better way
bull Further- growing competition amp complexity of managing large business
bull there is no any single universally accepted management theories
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
1Classical theory It is oldest theory of management It is foundation of study of business
management With increase in size and complexity of
organization the need for systematic approach became inevitable
Finanacial incentives were viewed as important contributors
Viewed organization as closed system Develop a set of lsquomanagement principlesrsquo
which are universally applicable
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Features of classical theory
Foundation of modern management Attempts to increase employee output Financial incentives Structure of jobs and work schedule Organization as a closed system Set of management principles
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
SCIENTIFIC MANAGEMENT THEORY
bullIntroduced by frederick Winslow Taylor in USA in beginning of 20th Century
bullSM is concerned with knowing exatly what you want men to do and then see in that they do it in the best amp cheapest wayndash Taylor
bullConcerned with improving the operational efficiency at the shop floor level
bullFocus on time amp work study
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
ELEMENTS OF SM
bullSeparation of planning amp doing
bullStandardisation
bullScientific selection of working system
bullFinancial incentives
bullEconomy amp profit
bullMutual co-operation
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
PRINCIPLES OF SMbullReplacing rule of thumb with science
bullHarmony in group action
bullCo-operation not individualism
bullMaximum output not a restricted
bullDevelopment of workers to their fullest capacity
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
CRITICS
bullMore relevant for engineer point of view rather than management point of view
bullWorkers opposed
bullHuman aspect were ignored aggressive mechanical view of production
bullStrict following of standards to raise production
bullExploitation of workers by introduction of piece wage rate system
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Administrative management
bullIntroduced by father of modern management a French industrialist Henry Fayol in 1916
bullLooked at the problems of managing an organization from top management point of view
bullHe emphasized that POM are flexible and not absolute
bullOpposed principle ldquomanagers were born not maderdquo
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
ACTIVITIES OF AN ORG
bullTechnical (prod)
bullCommercial(buying selling amp exchanging finished goods)
bullFinancial (search for capital amp its use)
bullSecurity (protection of resources)
bullAccounting amp statistics
bullManagerial (pl organising command co-ordiantion amp control)
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
MANAGERIAL QUALITIES
bullPhysical
bullMental
bullMoral
bullEducational
bullTechnical
bullexperience
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
PRINCIPLES OF MGMT
bullDivision of Work
bullAuthority amp responsibility
bullDiscipline
bullUnity of command
bullUnity of direction
bullSubordination of Individual to General Interest
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
bullRemuneration of personnel
bullCentralization
bullScalar chain
bullOrderly arrangements
bullEquity
bullStability of tenure
bullInitiative
bullEsprit de corps
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
SIMILARITIES
bullOvercome managerial problems in systematic way
bullDevelop some principles for solving problems
bullEmphasized on effective mgmt actions
bullManagerial qualities are acquirable by training
bullHarmonious relationship between mgmt amp workers
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
DISSIMILARITYBasis of Diff Taylor Fayol
Perspective Shop floor level Higher mgmt
Focus Efficiency through simplification amp std
Efficiency by observing certain principles
Orientation production Managerial
Results Scientific obs amp measurement
Personal exp -gt universal truths
Overall contributions
Accomplishment of production line
Systematic theory of mgmt
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Weberrsquos bureaucracy theory He is a German sociologist rather than charismatic amp traditional
focused on RATIONAL approach ldquoRational defines formal
authorityresponsibility structure and aimed to achieve organizationrsquos predetermined goals
Authority by designation and bound to follow well defined rules amp regulations
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Features Division of labor Scalar chain Appointment based on merit Formal rules amp procedure Impersonal Professional officials Official records
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Limitations Much Emphasize on formal rules amp
regulation Hampers human creativity Procedure oriented Delays in working process works against human nature closed system
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Limitations of classical theory Helps when organization has very
stable structure Universality of concepts does not
always hold good Employees are considered as tools Task oriented Focus on monetary rewards Overemphasize on rules amp
regulations
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
2 Behavioral theory Focus on human relation approach Attributed to organizational goals
amp satisfaction of human needs Shifted from work place condition
to human relation side Production oriented jobs are
shifted to people oriented jobs
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Human relation theory management doesnrsquot do it gets others to
do Human being amp human relation Increase in morale of workers Defines way of interacting to
subordinates Elton mayo(1880-1949) father of human
relation approach Known as a Hawthorne study
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Conducted various experiments
-test room studies
-interviews
-observation
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Features workers are not rational man but
social man group activity work like one family less chance of conflicts Production norms set by social
norms not by official structure
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Limitations Design of theory Analysis of theory Interpretation of theory Human relation philosophy Scientific method amp human relation
approach
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Behavioral science theory Lack of scientific vision in human relation
approach This theory applied concept of social
science(psychologysociologyanthropology) motivate people as per their need perception managers understand their needs and
satisfy them through motivators and synchronize their individual goals with organizational goals
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Features emphasize on participative amp
group decision making Self direction amp self control Positive measures Informal groups ldquocomplex manrdquo rather than ldquosocial
manrdquo
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
3 Modern management
Characteristics Responsive to environmental
changes Organizations are dynamic
institutions Business have multiple objectives Management is multi-disciplinary Management is future oriented
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Theories of modern management Quantitative theory Systems theory Contingency theory Operational theory
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Quantitative theory Quantitative scientific and systematic explanations gained
popularity during World War II The quantitative viewpoint focuses on the use of mathematics statistics and information aids to support managerial decision-making and organizational effectiveness
Three main branches have evolved over the years
management science
operations management
management information systems
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Features Offers quantitative aids to decision-making develops
quantitative tools to assist in providing products and services
The primary focus is on decision-making Managerial choices in any situation depend on criteria such as costs revenues return on investment impact on other areas etc
Heavy emphasis is put on computers and their processing capabilities Final solutions to problems are reduced to mathematical formulae and these are subjected to further analysis and processing to find viable alternatives
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Systems theory
It attempts to view the organisation as a single unified purposeful entity composed of interrelated parts Rather than dealing separately with the various parts of an organisation the systems theory gives managers a way of looking at an organisation as a whole and as a part of the larger external environment
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Features consider organization as a sub system consider both near amp distant future
goals integrates goals of different parts of
organization with whole organization promotes business amp social objectives
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Components of a system
Sub-system
Synergy
Open and closed system
System boundary
Flow
Feedback
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Contingency(situational) theory
Contingency theory is based on the premise that
situations dictate managerial action that is different
situations call for different approaches No single way
of solving problems is best for all situations According
to contingency theory effective management varies
with the organisation and its environment This
approach is both analytical and situational with the
purpose of developing a practical answer to the
question at hand
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Features1 Managerial actions are contingent on certain actions outside the
system or sub-system as the case may be
2 Organizational efforts should be based on the behavior of actions outside the system so that the organization gets smoothly integrated with the environment
3 Managerial actions and organizational design must be appropriate to the given situation A particular action is valid only under certain conditions There is no one best approach to management It varies from situation to situation
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Operational theory
ldquoThe operational approach to management theory and science draws together the pertinent knowledge of management by relating it to the managerrsquos job that managers doit tries to integrate the conceptsprinciples and technique that underlie the task of managingrdquo
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Social responsibility of brsquoss Business organizations are looked forward to
solve a broad range of social problems like povertycrime pollutionraise the level of educationcreate better job opportunitiesuplift weaker and minority sections etc
It refers to the business organizationrsquos obligation to look after the interest of the society
An enterprise is responsible for its impact on all relevant stake holders
It is the continuing commitment by business to behave fairly amp responsibly to contribute the economic development
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Definitions of social responsibility ldquoSocial responsibility is an
organizationrsquos obligation to benefit to the society in the ways that transcend the primary objective of maximizing profitrdquo
ldquoIt is the obligation of an organization to seek that protect and improve the welfare of the society along with its own interestrdquo
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Nature of social responsibility Focus on business firms It deals with morale issues Commensurate with the objective of
profit maximization Pervasive activity Continuing activity
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Levels of social responsibility
Obeyance of law Catering to public expectation Anticipation of public expectation Creation of public expectation
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Historical perspective Profit maximization
Trusteeship management
Quality of life management
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Various stake holders Shareholders Employees Customers Competitors Government Society at large
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Arguments for social involvement
Public expectations
long run survival
profitable
Ethical obligation
Public image
Discouragement of further governmental regulation
Stakeholder interests
Possession of resources
complementary with economic objective
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Arguments against social involvement
Violation of profit maximization
Dilution of purpose
Cost
Sub-optimal utilization of resources
Lack of skills
Quantification of social benefits
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Ethics in managing It is governed by set of principles or code of
conduct It is generally determined by socially accepted
norms Ethics is the discipline dealing with what is good
and bad and with moral duty and obligation Business ethics is concerned with truth and justice ldquoBusiness ethics is set of morale principles that
governs the actions of individuals or groupsrdquo It is application of ethical principles to business
relationships and activities
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Ethical activities Organizational effectiveness
Profit maximization amp stake holderrsquos interest
Attending customers
Integrity
Meet organizational standards
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Factors affecting ethical decisions
Legal concerns
Government regulations
Industry amp company ethical codes
Social pressures
Tension between personal standards and organizational standards
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Approaches or theories of ethics
The utilitarian theory suggests that plans and actions should be evaluated by their consequences
The theory based on rights holds that all people have basic rights
The theory of justice demands that decision makers be guided by fairness and equity as well as impartiality
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Tools of ethics Values Rights amp duties Moral rules Human relationships Common morality
Promise keeping Non malevolence Mutual aid Respect for others Respect for property
The morality of care
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market
Types of business organization
As per size of the enterprise As per ownership As per purpose As per style of management As per decision making As per sources of finance As per listing on the stock exchange As per reach of market