CHAPTER-I

EVOLUTION OF MANAGEMENT THOUGHT

PRESENTED BY:
DINESH RAJ UPADHYAYA
[email protected]

SUPERVISED BY:
ANJAY KUMAR MISHRA
What is Management??
What is Management??
 The pursuit of organizational goals efficiently and effectively by integrating the work of
people through planning, organizing, leading, and controlling the organization's resources.

 Management is the set of objectives directed at an organization‟s resources with the aim of
achieving organizational goals and objectives in an efficient and effective manner.

 Management is the process of achieving organizational objectives through people and other
resources.

“ Management is an art of getting things done through people”

-F.W. Taylor
What is Management??
 At the heart of any successful organization you will find good managers who are making
important decision every day.
 Managers make sure that their projects will complete and achieve organizational goals and
objectives through effective utilization of resources.
 Motivate employees.
 Policies and procedures are followed.
EARLY MANAGEMENT STYLE
• Management‟s Control over the employee.
• People are forced to do the job.
• Managers usually treat using power to worker.
• Productivity is achieved through punishment not
rewards and incentives.
CONCEPT OF MODERN MANAGEMENT
• Management is that field of human behavior in which managers plan, organize, direct, and
control human, financial and other resources in an organized group.
• It is done in order to achieve desired individual and group objectives with optimum utilization
of resources.
• In the past management was not considered as an important part of development.
• With industrial revolution during 17th and 18th century, several economists expressed their
„concepts and function of management‟.
• Only in 19th century, management became the separate field of study because business
organization faced various problems regarding labor efficiency and wage payment system.
• In search of solution of these problems, people began to recognize management as a separate
field of study.
RESULTS OF MODERN MANAGEMENT
• Higher Productivity
• Reduce Turnover
• Cost Saving
• More Creativity and innovation
• Competitive Advantages
FUNCTIONS OF MANAGEMENT
FUNCTIONS OF MANAGEMENT…CONTD..
FUNCTIONS OF MANAGEMENT…CONTD..
1. Planning
BASIC MANAGERIAL FUNCTIONS/ FUNCTIONS OF MANAGEMENT…CONTD..
I. Planning:
• Planning is the first function of management.
• It is function of determining in advance what is to done and who is to do.
• This implies setting goals in advance and developing a way of achieving them effectively and
efficiently.
• Steps of Planning Phase:
Establish goals and objectives

Find ways to achieve them

Discovers alternative

Select best alternatives

FUNCTIONS OF MANAGEMENT…CONTD..
II. Organizing:
• Organizing refers to as arranging and structuring work and resources to accomplish
organizational goal.
• It is an important process, during which managers design organizational structure i. e formal
arrangements of jobs.
• This helps in developing working relations among employees.
• Steps of Organizing Phase:

Establishing structure

Creation of department

Deciding who will perform job and task

Establishing authority and responsibility

FUNCTIONS OF MANAGEMENT…CONTD..
III. Staffing:
• Staffing refers to the process which includes acquisition, retention, development, performance
appraisal, promotion and compensation of the most important resource of the organization that
is human capital.
• BASIC RULE- ”RIGHT MAN TO THE RIGHT PLACE!!”
FUNCTIONS OF MANAGEMENT…CONTD..
IV. Leading:
• A continuous process of setting goals and objectives and trying to achieve them through the
efforts of the other.
• Leadership is communicating, guiding, motivating, influencing and directing people to achieve
goal willingly and enthusiastically in a given situation.
• Leadership is getting others to follow and performs necessary task.

Manage Motivate Direct

BASIC MANAGERIAL FUNCTIONS/ FUNCTIONS OF
MANAGEMENT…CONTD..
IV. Leading:
contd..
“ Not every managers are leaders”
FUNCTIONS OF MANAGEMENT…CONTD..
IV. Controlling:
• Controlling is a goal-oriented function which ensures that an organization‟s resources are being
used effectively for the achievement of pre-determined goal.
• A process of monitoring performance and taking action to ensure desired results.
• It basically focuses on “Right Things Happens, In The Right Ways And At The Right Time”

Controlling Process Involves:

• Setting Performance Standard
• Monitoring and measurement of actual performance
• Comparison of actual performance with the standard
• Finding and analyzing deviations
• Taking corrective actions
TRENDS IN MANAGEMENT/ THEORIES OF MANAGEMENT
 Scientific Management Theory (F.W. Taylor)
• First attempt to apply science to the management.
• Major Focus on labor productivity.
• Introduced to replace the traditional method of management.
• It is used to discards the traditional method of hit and miss, rule of thumb and trial and error
methods of managing work and workers.
• This theory focus on scientific problem solving methods.
• Example : it uses research, investigation and experiment, collection of data and formulation of
data to solve the organizational problems.
• Therefore, scientific management involves studying each activity in detail to ensure all the
organizational activities are performed in an economic and effective manner.
• The basic purpose of scientific management is to improve labor productivity, determine wage
rate and helps in effective job design in an organization.
 Scientific Management Theory (F.W. Taylor)
Principles
I. Development of a science for each element of an individual’s work:
This principle suggests that:
• Work assigned to each employee should be observed and analyzed in order to replace the old
rule to thumb approach.
• Decision should be made on the basis of facts rather than beliefs and rule of thumb.

II. Scientific selection, training and development of workers:

This principle suggests that:
• Worker should be selected and trained in accordance with the job requirement.
• Management has to design systematic training to improve their skills and efficiency.

III. Close co-operation between management and workers:

This principle suggests that:
• There should be close harmonized relationship between workers and management.
• Worker should understand that they cannot perform their work without the existence of
management and vice versa.
 Scientific Management Theory (F.W. Taylor)
Principles…contd..

IV. Equal division of work and responsibility between management and workers:
This principle suggests that:
• The task and responsibility should be clearly divided among management and workers
• Each group should be assigned work, which it can perform more effectively.

V. Maximum output in place of restricted output:

This principle suggests that:
• This principle is necessary for workers prosperity, owners and to society.
• Maximum production ensure more wages to worker (Piece rate system)
• It also ensure maximum profit to owners (decrease in per unit cost)
• Help to society as it upgrade the living standard of people
 Scientific Management Theory (F.W. Taylor)
Limitations:
• Applicable to only simple organizations rather than to dynamic and complex organizations as it
focus one on only one best way.
• Focus on individual performance than group effort.
• Less chances of creativity and for employees as the participation of employee is less.
• More focus on production than the human development i.e it neglects the human factor.
• Quantitative Management rather than qualitative management.

Q. Highlight contributions and limitations of scientific management thoughts.

 Administrative Management Theory (Henry Fayol)
The Administrative Theory is based on the concept of departmentalization, which means the
different activities to be performed for achieving the common purpose of the organization should be
identified and be classified into different groups or departments, such that the task can be
accomplished effectively.
He divided all industrial activities into six group:
1. Technical activities (Production, manufacturing)

2. Commercial activities (buying, selling and exchange)

3. Financial activities (search for and optimum use of fund)

4. Security activities (protection of property and people)

5. Accounting activities (cost statistics, profit and loss,

balance sheet)

6. Managerial activities (planning, organizing, controlling, leading and commanding)

 Principles of Administrative Management
14 principles of management, universally applicable in all types of organizations.
1. Division of work (Distribution of right work to right person)
2. Discipline (concerned with obedience to the superior and to follow the rules, regulations and
procedures)
3. Unity of command (subordinate must get order and instructions only from one superior at a
time)
4. Authority and responsibility (Balance between authority and responsibility)
5. Unity of direction ( there should be one head and one plan for group of activities having
common objectives.)
6. Subordination of individual interest (interest of organization should be above the interest of
individual).
7. Remuneration (Fair and equitable wages to employees)
8. Centralization (Major decision making authority should not be given to subordinate, centralized
power structure)
9. Scalar chain (unbroken of chain of relations ranking form top level to lower level. Chain of
authority from top to bottom)
10. Order (all the resources should be arranged in systematic way)
11. Equity (there must be sense of kindness and justice at all levels of organization‟s members)
12. Stability of tenure (job security to avoid employee turnover)
13. Initiative (Give them freedom to do creative things , to plan and convert them into action)
14. Esprit De Corps (develop team spirit and togetherness, team effort is must to achieve goals)
 Administrative Management Theory
Limitations of Administrative Management Theory:
• More attention on departmentalization and Centralization of power.
• More superficial
• Complex Structure
• Lacks realism
• Is based on personal experience, so lack of empirical
evidences.: verifiable by observation or experience
rather than theory or pure logic.
• Fails to pay proper attention to the human behavioral
aspects in the organization.
• Fails to concern the situational factors.
 Bureaucracy Theory –Max Weber
The bureaucratic management theory, introduced by Max Weber stated that to manage an
organization efficiently, it is essential to have a clear line of authority along with proper rules,
procedures and regulations for controlling each business operation. Bureaucracy refers to the
possessing of control over a group of people or activities through knowledge, power or authority.
 Principles of Bureaucracy Theory
Formal rules and procedures: (there must have effective system, all the members of organization
from top to lower level must follow rules and regulation in every stage)

Functional specialization: (work should be divided on the basis of their specialization. Placement
of right person to the right job)

Well defined hierarchy of authority: (authority should flow form highest level to lowest level)

Supervision by higher authority:( higher level of management delegates authority and

responsibility)

Technical competence for employment and promotion: (recruitment and selection, promotion of
employees should be on the basis of the technical competence)

All decision should be recorded: (all the act, action and decisions performed by management in
various situation should be recorded for future reference)

Interpersonal relation: (interpersonal relation among employees should be maintain for effective
communication and to increase efficiency)
 Bureaucracy Theory
Limitations of Bureaucratic Management Theory:
• One way communication
• High chances of misuse and exploitation of power
• Wastage of time, efforts and money
• Delay in business decision making
• Hinders innovation and creativity
• Inflexible and rigid structure and method.
 The neo classical theory
1. Human Relation Approach
2. Behavioral science Approach
 Human Relation Approach (Elton Mayo)
• Human Relations management theory is a premise of organizational psychology from the early
twentieth century, which suggests that employee productivity and motivation can be increased
through positive social bonds in the workplace and acknowledgement of the worker as a unique
individual.
• Human Relations Theory focuses specifically on the individuals needs and resultant behaviors
of individuals and groups
• Human relation approach “ workers should not be treated as factor of production rather should
be considered as human beings.
• “Human relations” – the way in which manager interact with their subordinate.
• Earlier human beings were considered as an important factor of production for organization.
• Human Relations Theory focuses specifically on the individuals needs and resultant behaviors
of individuals and groups

..Some Examples..
 Behavioral Science Approach
Behavior science is concerned with scientific investigation, analysis and understanding of human
behavior in organization.
Specifically, behavioral management theory is concerned with how to manage productivity by
understanding worker motivation, including expectations, needs and interests, and group dynamics.

3 branches of behavioral science:

• Psychology : study of individual human behavior.
• Sociology: study of human behavior in group
• Anthropology: study of physical, biological and cultural influences on human behavior
 Behavioral Science Approach Theories
Abraham Maslow: Need Hierarchy Theory

McGregor: Theory of X and Y

Hertzberg: Two Factor Theory

 Need Hierarchy Theory (Abraham Maslow)
• One of the most well known theories of human motivation is Maslow's Hierarchy of Needs
Theory.
• This theory of motivation was propounded by Abraham Maslow, an American Psychologist, in
1943.
• According to this theory, there are certain types of needs in human being and he/she is motivated
by the willingness to satisfy these needs.
• The main assumptions of this theory are: (i) human needs are unlimited (ii) these needs and wants
follow specific hierarchical pattern from the most primary level to the higher level needs, and (iii)
unsatisfied need is a good motivator.
The human needs arranged in hierarchical order are:
• Physiological needs are physical needs common to all (e.g. need for food, water, shelter)
• Safety needs refer to physical or economic safety protection or security(pension, insurance, PF)
• Social needs refer to love and social acceptance, belongings, friendship etc.
• Esteem needs refer to master life experiences, i.e. power, prestige, recognition, respect etc.
• Self actualization needs refer to achieve one‟s creative potential. Challenging job, responsibility,
risk taking decision making.
Need Hierarchy Theory (Abraham Maslow)
 Two Factor Theory (Frederick Hertzberg)
Frederick Herzberg of western Research University of America found the important theory to
motivate employees to work, called two factors theory.
• It state that not all job factors motivate employees.
• An individual attitude toward job determines satisfactions.
• He carried out the research on 200 engineers and accountant of different company, by asking
questions.
– What make them happy?
– What make them unhappy?
 Two Factor Theory (Frederick Hertzberg)
1. Hygiene factors (Factors preventing dissatisfaction in employees).
• Hygiene factors do not motivate employees but if these factors are not present in
employees than it cause the dissatisfaction in them.
• They are not satisfying factors they bring the employees to the zero point of motivation. It
includes: salary, job security, working condition, relationship with co-worker, friends etc.
2. Motivating Factors:
• These are the factors which help to motivate employees to do work.
• These factors positively affect morale, satisfaction, efficiency of employee and productivity
and profitability of the organization.
• It include: recognition, responsibility, growth, achievement, risky and challenging work
etc.
 Theory X and Y (McGregor)
Theory X is based on traditional assumption about human behavior.
General assumption of theory X :
• Employee are lazy and try to avoid work
• Employee dislike work, they must be controlled, threatened with punishment to achieve desired
goals
• Employee avoid responsibility.
• Employee have little capacity for solving organizational problem
• Managers need to punish, control and direct employees.

Theory Y is based on optimistic view of worker. Theory Y represent participative management.

General assumption of theory Y :
• Work is natural activity like play or rest
• Employees are self control, self direction.
• Employees try to accept responsibility.
• People will became committed to organizational objectives if they are rewarded for doing so.
• Manager have to create flexible environment.
 Chester Bernard
System Views of Management Theory
Management theorist Chester Barnard believed organizations need to be both effective and efficient. Effective means meeting
organizational goals in a timely way. Efficient, in his opinion, means the degree to which the organization can satisfy the motives of
its employees.
System Views of Management States associates with the Management division of the organization and it assumes that all of the
organizations are systems, whereas all of the systems are sub-systems of larger systems.
The system views of management theory is a technique based upon the idea that the organization is imagined as the systems of
correlated parts. Moreover subsystems to be operated as a whole for the achievement of common and similar targets and goals.
Major Components – System Views of Management
Inputs
Variety of manpower, raw material, equipment and information resources required for production of goods and services.
Transformation Process
Technological and Managerial abilities of an organization, applied to change input into the output is called the Transformation
process.
Output
Final production and by-production results through the transformation process in the form of product or services of the organization
are called Output.
Feedback
Feedback always determines the reaction of final users. Here the feedback will be the response of final consumers of the products or
services.
Environment
Internal and external influences that affect the system are made up of these components.
 Chester Bernard
Characteristics of an Organizational System
Some of the major characteristics of organizational systems are given below:
• Sub system
• Holism
• Synergy
• Open and Closed system
• System boundary
 Chester Bernard
Advantages and Disadvantages
Some of the advantages include:
• It aids in the understanding of complicated organization functions and is probabilistic rather than
deterministic.
• That has been used as the foundation for new types of companies, such as project management
firms.
• In many functions such as planning, organizing, directing, and controlling, it is appropriate to
carry out the inter-relationships.
Moreover there are some negative aspects too:
• This method is a little hazy and abstract.
• It might be challenging to implement in large, complicated businesses.
• Also it does not offer managers with any tools or techniques.
• It is not a prescriptive management theory in the sense that it does not provide tools and
strategies for managers in the field.
• The nature of interactions and interdependencies is not specified.
 Contingency Theory
• This theory is also called situational approach to management.
• It is new thinking among management scholars.
• This approach says that the best way to lead, plan, organize and conduct managerial activities
varies with situation.
• A particular method suitable in one organization at a time may not necessarily be suitable to
another organization at other time.
• Hence, there are no plans, organization structures, leadership style and control technique that
will fit in all situation.
• Since every organization is unique and individual, management decision and structure must be
unique. So the manager must understand the uniqueness and complexity of each situation.

“Effectiveness as a leader is determined by how well your Leadership style matches the situation”.
- Fiedler
 Contingency Theory
Some Characteristics of the contingency approach as follows:
• Organizations are often systems and interact regularly with the environment.
• It is an integrative approach in the sense that it attempts to integrate with finding other
managerial perspectives.
• This theory requires knowledge of various sets of situations and tools to work best.
• It is based on empirical researches and has developed its tools for real findings in varied
situations.
Contributions of Contingency Approach
• Managers get helps in innovating new and better approaches to meet complex situations.
• It gives the capability to think in analytical, critical, and multidimensional ways.
• Managers are given more freedom.
• Managers become more sensitive and alert.
Limitations of Contingency Approach/Theory
• This theory ignores the universally applicable principles.
• It fails to enlist all contingency variables.
• It focuses on the mere situation but which tools should be used in what situation is not specified.
THANK YOU!!!