Unit 1 - basic of marketing maba savitribai phule

UNIT – 1
Basic Concepts
Manager, Managing, Workplace, Organization,
Management Functions, Mintzberg’s Managerial Roles, The
Universality of Management, Approaches to Management - Early
Management, Classical Approach, Behavioral Approach,
Quantitative Approach, Contemporary Approaches. Managerial
Competencies: Communication, team work, planning and
administrative, strategic and global competencies; Managerial Skills;
How Is the Manager’s Job Changing?, Importance of Customers to
the Manager’s Job, Importance of Innovation to the Manager’s Job,
Importance of Sustainability to the Manager’s Job

• What is Management?
• Getting thing done through others
• Organization & Collection of People who work together
• Process of giving direction & Controlling the various activities of
people

• Management means directing and controlling a group of people
or an organization to reach a goal.
• Management is the process of planning, organizing, and directing
a business or organization to achieve goals in an efficient and
effective manner.
• Management often means the deployment and manipulation of
human resources, financial resources, technological resources, and
natural resources.

• `Management is essential for an organized life and necessary to run
all types of organizations.
• Managing life means getting things done to achieve life’s objectives
and managing an organization means getting things done with and
through other people to achieve its objectives.

• Definition of Management:
1. Management is the coordination of all resources through the process of planning,
organizing, directing and controlling in order to attain stated objectives. —Henry
L. Sisk.
2. Management is the art and science of organising and directing human efforts
applied to control the forces and utilise the materials of nature for the benefit of
man. —American Society of Mechanical Engineers
3. Management is the creation and maintenance of an internal environment in an
enterprise where individuals, working in groups, can perform efficiently and
effectively towards the attainment of group goals. —Harold Koontz and Cyrill
O’Donnell

• What is a manager?
• A manager is a person, who is responsible for a part of a company.
• Managers may be in charge of a department and the people who work in
it.
• In some cases, the manager is in charge of the whole business. They
should have the power to hire, fire, discipline, do performance appraisals,
and monitor attendance. They should also have the power to approve
overtime, and authorize vacations.

• Workplace :
• A workplace is a place where people work, either for themselves or for
an employer. Workplaces can vary in type and location, and can include:
Traditional offices
Factories
Shops
Home offices
Co-working spaces
Remote work settings

• Workplace :
• A workplace is a location where someone works for their employer, a
place of employment. Such a place can range from a home office to a
large office building or factory.
• Workplaces are important social spaces that affect many people,
including : Workers and their families, The employing organization, The
organization's customers, and Society as a whole.
• A positive workplace can help reduce stress and burnout, which can
lower healthcare costs for an organization by around 50%

• Four Functions of Management:
1) Planning: Planning is future-oriented and determines an organization’s
direction. It is a rational and systematic way of making decisions today that
will affect the future of the company.
• Peter Drucker has defined :“Planning is the continuous process of
making present entrepreneurial decisions systematically and with best
possible knowledge of their futurity, organizing systematically the efforts
needed to carry out these decisions and measuring the results of these
decisions against the expectations through organized and systematic
feedback”.

2. Organizing:
Organizing requires a formal structure of authority and the direction
and flow of such authority through which work subdivisions are defined,
arranged and coordinated so that each part relates to the other part in a
united and coherent manner so as to attain the prescribed objectives.
According to Henry Fayol, “To organize a business is to provide it with
everything useful or its functioning i.e. raw material, tools, capital and
personnel’s”.

3. Leading:
• Managers should be comfortable and confident commanding their team
members’ daily tasks as well as during periods of significant change or
challenge. This involves projecting a strong sense of direction and leadership
when setting goals and communicating new processes, products and
services, or internal policy.
• The leadership element involves issuing of instructions and guiding the
subordinates about procedures and methods.
• The communication must be open both ways so that the information can be
passed on to the subordinates and the feedback received from them.
• Motivation is very important since highly motivated people show excellent
performance with less direction from superiors.

4. Controlling:
• The function of control consists of those activities that are undertaken
to ensure that the events do not deviate from the pre-arranged plans.
The activities consist of establishing standards for work performance,
measuring performance and comparing it to these set standards and
taking corrective actions as and when needed, to correct any
deviations.
• According to Koontz & O’Donnell, “Controlling is the measurement
& correction of performance activities of subordinates in order to
make sure that the enterprise objectives and plans desired to obtain
them as being accomplished”.

• CONCEPTS OF MANAGEMENT:
1. Management as an Activity: Management is an activity just like
playing, studying, teaching etc. As an activity management has been
defined as the art of getting things done through the efforts of other
people. Management is a group activity wherein managers do to
achieve the objectives of the group.
2. Management as a Process: Management is considered a process
because it involves a series of interrelated functions. It consists of
getting the objectives of an organization and taking steps to achieve
objectives. The management process includes planning, organizing,
staffing, directing and controlling functions.

3. Management as an Economic Resource: Like land, labor and
capital, management is an important factor of production. Management
occupies the central place among productive factors as it combines and
coordinates all other resources.
4. Management as a Team: As a group of persons, management
consists of all those who have the responsibility of guiding and
coordinating the efforts of other persons. These persons are called as
managers who operate at different levels of authority (top, middle,
operating). Some of these managers have ownership stake in their firms
while others have become managers by virtue of their training and
experience.

5. Management as an Academic Discipline: Management has emerged
as a specialized branch of knowledge. It comprises principles and
practices for effective management of organizations. Management has
become as very popular field of study as is evident from the great rush
for admission into institutes of management. Management offers a very
rewarding and challenging career.

• Nature or Characteristics of Management:
1. Management is universal: Management is universal as it’s common
and crucial in all organizations. You can apply the principles of
management in all situations regardless of the nature, location, and
size of the enterprise.
2. Management is goal oriented: Management is concern with
achievement of specific goals. It is always directed towards
achievement of objectives. The success of management is measured
by the extent to which objectives are achieved.

3. Management is associated with group efforts: The business comes
into existence with certain objectives which are to be achieved by a
group and not by one person alone. Management gets things done by,
with and through the efforts of group members. It co-ordinates the
activities and actions of its members towards a common goal.
4. Management is intangible: It is an unseen force, its presence can be
evidence by the result of its efforts up to date order but they generally
remain unnoticed, Where as mismanagement is quickly noticed.

5. Management is an activity and not a person or group of person:
Management is not people or not a certain class but it is the activity, it is the
process of planning, organizing, directing and controlling to achieve the
objectives of the organization.
6. Management is situational: Management does not advice best way of
doing things. Effective management is always situational. A manager has to
apply principles, approaches and techniques of management after taking
into consideration the existing situations.

7. Management is concern with people: Since management involves
getting things done through others only human being performed this
activity with the help of planning and control. The element man can not be
separated from the management.
8. Management is the combination of art, science and profession:
Management makes use of science as well as art. It is science because it
collects knowledge with the methods and data, analyzes and measures it
and decision is taken with the help of experiment. It is a systematic body
of knowledge. Art means application of knowledge for solving various
problems. In modern times there is separation of ownership and
management, so professional experts are appointed.

• Scope And Branches of Management:
1. Production Management: Production management implies planning,
organizing, directing and controlling the production function so as to
produce the right goods, in right quantity, at the right time and at the right
cost. It includes the following activities:
(a) designing the product
(b) location and layout of plant and building
(c) planning and control of factory operations
(d) operation of purchase and storage of materials
(e) repairs and maintenance
(f) inventory cost and quality control
(g) research and development etc.

2. Marketing Management: Marketing management refers to the
identification of consumers needs and supplying them the goods and
services which can satisfy these wants. It involves the following
activities:
(a) marketing research to determine the needs and expectation of
consumers
(b) planning and developing suitable products
(c) setting appropriate prices
(d) selecting the right channel of distribution, and
(e) promotional activities like advertising and salesmanship to
communicate with the customers

3. Financial Management: Financial management seeks to ensure the
right amount and type of funds to business at the right time and at
reasonable cost. It comprises the following activities:
(a) estimating the volume of funds required for both long-term and short-
term needs of business
(b) selecting the appropriate source of funds
(c) raising the required funds at the right time
(d) ensuring proper utilization and allocation of raised funds so as to
maintain safety and liquidity of funds and the creditworthiness and
profitability of business, and
(e) administration of earnings

4. Personnel Management: Personnel management involves planning, organizing and
controlling the procurement, development, compensation, maintenance and integration of
human resources of an organization. It consists of the following activities:
(a) manpower planning
(b) recruitments,
(c) selection,
(d) training
(e) appraisal,
(f) promotions and transfers,
(g) compensation,
(h) employee welfare services, and
(i) personnel records and research, etc.

• Importance of Management:
1. It helps in Achieving Group Goals : A human group consists of several
persons, each specialising in doing a part of the total task. Each person
may be working efficiently, but the group as a whole cannot realise its
objectives unless there is mutual cooperation and coordination among
the members of the group. Management creates team-work and
coordination in the group.
2. Optimum utilisation of resources: Managers forecast the need for
materials, machinery, money and manpower. They ensure that the
organisation has adequate resources and at the sametime does not have
idle resources. They create and maintain an environment conducive to
highest productivity.

3. Minimization of cost: In the modern era of cut-throat competition no business
can succeed unless it is able to supply the required goods and services at the
lowest possible cost per unit. Management directs day-to-day operations in such a
manner that all wastage and extravagance are avoided. By reducing costs and
improving efficiency, managers enable an enterprise to be competent to face
competitors and earn profits.
4. Survival and growth: Modern business operates in a rapidly changing
environment. An enterprise has to adapt itself to the changing demands of the
market and society. Management keeps in touch with the existing business
environment and draws its predictions about the trends in future. It takes steps in
advance to meet the challenges of changing environment. Changes in business
environment create risks as well as opportunities.

5. Generation of employment: By setting up and expanding business
enterprises, managers create jobs for the people. People earn their
livelihood by working in these organizations. Managers also create such
an environment that people working in enterprise can get job satisfaction
and happiness.
6. Development of the nation: Efficient management is equally
important at the national level. Management is the most crucial factor in
economic and social development. The development of a country largely
depends on the quality of the management of its resources. Capital
investment and import of technical knowhow cannot lead to economic
growth unless wealth producing resources are managed efficiently.

Different Levels Of Management:

• What is a manager?
• A manager is a person who is responsible for a part of a company.
Managers may be in charge of a department and the people who work in
it. In some cases, the manager is in charge of the whole business. A
manager is a person who exercises managerial functions primarily. They
should have the power to hire, fire, discipline, do performance
appraisals, and monitor attendance. They should also have the power to
approve overtime, and authorize vacations.

• Functions of Manager:
1. Setting Goals and Planning: A leader is expected to perform
creative function of laying out goals and policies to persuade the
subordinates to work with zeal and confidence.
2. Organizing the group: The second function of a leader is to create
and shape the organization on scientific lines by assigning roles
appropriate to individual abilities with the view to make its various
components to operate sensitively towards the achievement of enterprise
goals.

3. Initiating Action: The next function of a leader is to take the initiative
in all matters of interest to the group. He should not depend upon others
for decision and judgment. He should float new ideas and his decisions
should reflect original thinking.
4. Co-Ordination: A leader has to reconcile the interests of the
individual members of the group with that of the organization. He has to
ensure voluntary co-operation from the group in realizing the common
objectives.
5. Direction and Motivation: It is the primary function of a leader to
guide and direct his group and motivate people to do their best in the
achievement of desired goals, he should build up confidence and zeal in
the work group.

6. Link between Management and Workers:
• A leader works as a necessary link between the management and the
workers. He interprets the policies and programme of the management to
his subordinates and represents the subordinates’ interests before the
management. He can prove effective only when he can act as the true
guardian of the interests of his subordinates.

• What are Management Skills?
• Management skills can be defined as certain attributes or abilities that an
executive should possess in order to fulfill specific tasks in an
organization.
• Good management skills are vital for any organization to succeed and
achieve its goals and objectives. A manager who fosters good
management skills is able to propel the company’s mission and vision or
business goals forward with fewer hurdles and objections from internal
and external sources.

• Types of Management Skills (Robert L. Katz):
1. Technical Skills:
Technical skills involve skills that give the
managers the ability and the knowledge to use a variety of
techniques to achieve their objectives. These skills not only
involve operating machines and software, production tools, and
pieces of equipment but also the skills needed to boost sales,
design different types of products and services, and market the
services and the products.

2. Conceptual Skills
These involve the skills managers present in terms of the
knowledge and ability for abstract thinking and formulating ideas. The
manager is able to see an entire concept, analyze and diagnose a
problem, and find creative solutions. This helps the manager to
effectively predict hurdles their department or the business as a whole
may face.
3. Human or Interpersonal Skills
The human or the interpersonal skills are the skills that
present the managers’ ability to interact, work or relate effectively with
people. These skills enable the managers to make use of human
potential in the company and motivate the employees for better results.

Mintzberg’s Management Roles:

1. Interpersonal Roles
• Figurehead – includes symbolic duties which are legal or social in
nature.
• Leader – includes all aspects of being a good leader. This involves
building a team, coaching the members, motivating them, and
developing strong relationships.
• Liaison – includes developing and maintaining a network outside the
office for information and assistance.

2. Informational Roles
• Monitor – includes seeking information regarding the issues that are
affecting the organization. Also, this includes internal as well as external
information.
• Disseminator – On receiving any important information from internal or
external sources, the same needs to be disseminated or transmitted within
the organization.
• Spokesperson – includes representing the organization and providing
information about the organization to outsiders.

3. Decisional Roles
• Entrepreneur – involves all aspects associated with acting as an initiator,
designer, and also an encourager of innovation and change.
• Disturbance handler – taking corrective action when the organization
faces unexpected difficulties which are important in nature.
• Resource Allocator – being responsible for the optimum allocation
of resources like time, equipment, funds, and also human resources, etc.
• Negotiator – includes representing the organization in negotiations which
affect the manager’s scope of responsibility.

• What is the meaning of organization?
• An organization is a group of people who work together, like a
neighborhood association, a charity, a union, or a
corporation. Organization is also the act of forming or establishing
something (like an organization). It can also refer to a system of
arrangement or order, or a structure for classifying things.
• According to Gary Johns, “ Organizations are social inventions for
accomplishing goals through group efforts.”
• According to Ralph C. Davis, “ Organization is a group of people who
cooperate under the direction of leaderships, for the accomplishment of a
common end.”

• Components of Organization:
1) People: The workforce or human part of organization that performs
different operations in the organization. Managers and knowledge workers
are individuals with a variety of preferences for information and diverse
capabilities for effectively using information provided to them.
2) Structure: Organizations structure their management, employees, and
job tasks into a variety of organizational subunits. However, information
technology can also support a process of organizational redesign.

3) Technology: In todays world without technology work would be
either difficult or even impossible. It provides economic and physical
resources to make peoples job easy. The people are the assistance of
machines, tools, methods, and resources. The nature of is dependent
upon the nature of tasks and scale of operations.
4) Environment: operations of all organizations take place under
internal and external environment. An organization is a small part of a
large system which contains elements such as government, family and
other organizations.

• Types of Organization:
1) Private Organizations:
a) Sole Proprietorship
b) Partnership
c) Joint Stock Company
d) Co – operative Societies
2) Public Organizations:
a) Departmental undertaking
b) Statutory Corporation
c) Government Company
3) Joint Organization:

1) Private Organization:
The private sector consists of all privately owner, for-profit
businesses in the economy. The private sector tends to make up a
larger share of the economy in free market, capitalist based societies.
Private sector businesses can also collaborate with government run
agencies in arrangements called public-private partnerships.

a) Sole Proprietorship:
• A sole proprietorship is an unincorporated business with only one
owner who pays personal income tax on profits earned.
• A sole proprietorship is a business owned and operated by a single
individual.
• Sole proprietorships are easy to establish and dismantle, due to a
lack of government involvement, making them popular with small
business owners and contractors.
• Example - Local grocery store , Freelance consultant , Tutor

b) Partnership:
• A partnership is an arrangement between two or more people to
oversee business operations and share its profits and liabilities.
• In a general partnership company, all members share both profits and
liabilities.
• Professionals like doctors and lawyers often form a limited liability
partnership.
• Example – Spotify & Uber - A co-branding partnership between a ride-
hailing app and a music-streaming app to create a soundtrack for rides.

c) Joint- Stock Company:
• A joint-stock company is a business owned collectively by its
shareholders.
• A joint-stock company (JSC) is a business entity where shareholders
own a portion of the company through shares that can be bought
and sold.
• Historically, a joint-stock company was not incorporated and thus its
shareholders could bear unlimited liability for debts owed by the
company.
• Example - Reliance Industries Limited, Tata Motors Limited, Jindal
Steel & Power Ltd

d) Co – operative Societies:
• A co-operative society is a voluntary association of people with
common needs who join together to achieve a common economic
interest.
• The primary goal of a co-operative society is to serve the interests of
the poorer sections of society through self-help and mutual help
• It is a form of business where individuals belonging to the same class
join their hands for the promotion of their common goals.
• Example - Co-operative Banks,
• Housing Co-operative Society- A society that purchases land, develops
it, and constructs houses or flats for its members

2) Public Organizations:
• Those organizations which are owned and managed either by Central
Government or by State Government are known as public
organizations.
• A public organization is an entity that operates in the public sector and
is accountable to government principles.
• The intent of public organizations is to do welfare of the society and to
support the interest of public.
• Example – Education,

a) Departmental Undertaking:
• A departmental undertaking is a public sector enterprise that is
organized, financed, and controlled in a similar way to other
government organizations.
• A minister who is responsible to the parliament controls the undertaking.
• This type of business setting provides the services that are vital for the
society
• Such as railway, broadcasting, postal services, All India Radio,
Doordarshan etc.
• Various ministries of government are wholly responsible for financing
and managing these organizations.

b) Statutory Corporation:
• When an organization is formulated by passing a special Act in
parliament or State Legislature, then such organization is known as
statutory corporation or public corporation.
• Their Existence & powers are regulated by Law.
• Typically government run or funded.
• Example- Air India, State Bank of India ,Life Insurance Corporation of
India

c) Government Company:
• Those companies in which at least 51 percent of share capital is held by
government are known as government companies.
• Such companies are registered under companies act of India and hence are
administered as per the provisions of companies Act only.

3) Joint Organizations:
• Those organizations which are owned and operated privately as
well as by government are known as joint organizations.
• Joint organizations are those in which investment come from the
private as well as the public sector and where government actively
participate in managing and controlling the organization.

• Approaches to Management :
A. Early Management
• Management has been practiced a long time. Organized endeavors directed by people
responsible for planning, organizing, leading, and controlling activities have existed
for thousands of years.
• Studying history is important because it helps us see the origins of today’s management
practices and recognize what has and has not worked.
• Let’s look at some of the most interesting examples.

• Approaches to Management :
A. Early Management
• Example :
• The Egyptian pyramids and the Great Wall of China are proof that projects of tremendous
scope, employing tens of thousands of people, were completed in ancient times. It took more
than 1,00,000 workers some 20 years to construct a single pyramid. Who told each worker
what to do? Who ensured that there would be enough stones at the site to keep workers busy?
The answer is managers.

A. Early Management
• In 1776, Adam Smith published his book The Wealth of Nations, in which he
argued the economic advantages that organizations and society would gain from
the division of labor (or job specialization or Specialization of labor) - that is,
breaking down jobs into narrow and repetitive tasks.
• The division of labor is the process of assigning different tasks to different
people to increase productivity.

A. Early Management
• Using the pin industry as an example, Smith claimed that 10 individuals, each
doing a specialized task, could produce about 48,000 pins a day among them.
However, if each person worked alone performing each task separately, it would
be quite an accomplishment to produce even 10 pins a day!
• It increased productivity by increasing each worker’s skill , saving time lost in
changing tasks, and creating inventions and machinery. Job specialization continues
to be popular.
• For example, think of the tasks performed by members of a hospital surgery
team, meal preparation tasks done by workers in restaurant kitchen

• Approaches to Management:
• Early Management
• Starting in the late eighteenth century when machine power was substituted for
human power, a point in history known as the Industrial revolution.
• It became more economical to manufacture goods in factories rather than at
home.
• These large efficient factories needed someone to forecast demand, ensure that
enough material was on hand to make products, assign tasks to people, direct
daily activities, and so forth.
• That “someone” was a manager: These managers would need formal theories to
guide them in running these large organizations

B) Classical Approach:
1)Scientific Approach (Frederick W. Taylor)
2)Administrative Approach (Henry Gantt)
3)Bureaucracy (Frank and Lillian Gilbreth)
C) Behavioral Approach:
1) Human Relation Approach(Elton Mayo)
2) Behavioral Science Approach(Maslow)
D) Modern Approach:
1) Quantitative Approach
2) System Approach
3) Contingency Approach
4) Social System Approach
5) Decision-Making Approach

• Although we’ve seen how management has been used in organized efforts since
early history, the formal study of management didn’t begin until early in the
twentieth century. These first studies of management, often called the classical
approach
• Two major theories comprise the classical approach: Scientific management and
General administrative theory.
• The two most important contributors to scientific management theory were
Frederick W. Taylor and the husband-wife team of Frank and Lillian Gilbreth.
• The two most important contributors to general administrative theory were Henri
Fayol and Max Weber. Let’s take a look at each of these important figures in
management history.

• 1)Scientific Approach/Scientific Management Theory
• (Frederick W. Taylor)
• In 1911 Frederick W. Taylor’s Principles of Scientific Management was published. His
groundbreaking book described a theory of scientific management—the use of
scientific methods to determine the “one best way” for a job to be done.
• His theories were widely accepted and used by managers around the world and Taylor
became known as the “father” of scientific management.
• The use of scientific principles and techniques in various managerial functions is
known as scientific management.
• Other major contributors to scientific management were Frank and Lillian Gilbreth (early
proponents of time-and-motion studies and parents of the large family described in the
original book Cheaper by the Dozen) and Henry Gantt (whose work on scheduling charts
was the foundation for today’s project management).

• Other major contributors to scientific management were Frank
and Lillian Gilbreth - proponents of time-and-motion studies.
Time Study Motion Study
The study that determines the standard time taken to
perform a job is known as Time Study
The study of movements like lifting, putting objects,
sitting and changing positions, etc., is known as Motion
Study
Determines how long it takes to complete a task at a set
performance level
Analyzes the movements involved in a task to identify
and eliminate unnecessary motions.
Tool Used – Stopwatch Tools used – Surveillance or movie camera
Increased productivity of labor Minimization of movement of workers.

• Henry Gantt – Gantt Chart
• He created this chart as a way to track and manage the progress of major projects as to keep
them on time and running as efficiently as possible.
• A visual tool used to track and manage project progress
• The chart is a horizontal bar graph that shows tasks laid out sequentially, with each task's
duration, start, and end dates represented by the length and position of its bar.

• Features of Scientific Management:
1. Separation of planning and Doing: Frederick W. Taylor
separated the functions of planning and doing. He considered
that planning is most crucial task which should be taken up by
specialist only. Thus, when the planning is perfect then the process
of doing will be smoothly accomplished itself.
2. Functional Foremanship: The functional foremanship
(Introduced by Taylor) deals with the supervising and directing
activities of the organization.

3. Bilateral Mental Revolution: The mental revolution in scientific
management is related to the workmen as well as the management
personnel. A complete mental revolution in the duties of the workmen
towards their employees, day to day business issues and co-workers,
both are important elements of scientific management.
4. Financial Incentives: Taylor introduced the differential piece-rate
system to motivate and reward the proficient and better works.

• 1. Science, not Rule of Thumb
• The rule of thumb is the practice of managers making decisions based on
their personal judgments or past experience.
• Taylor focused on the scientific study and analysis of each and every element
of a work to replace the old rule of thumb method or hit and trial method.
• Rule of thumb is not based on science or exact measurement.
• Scientific method is based on cause and effect, whereas rule of thumb was
based solely on the discretion of managerial decisions.
• Taylor focused that managers should scientifically analyze each and every
component of work.
• According to him, even a small work, like loading of iron pigs into boxcars can
be scientifically done. Doing a work scientifically reduces wastage of time
and resources and helps to achieve the target effectively and efficiently.

• 2. Harmony, Not Discord
• Taylor recognized the class conflict that existed between the workers and managers. He
emphasized that there should be no conflict between the workers and managers.
• Both of them should realize the importance of each other and should work together
for organizational goals.
• In order to achieve this harmonious relation, he focused on ‘Mental Revolution’, which
means that workers and managers should transform their thinking.
• In such a situation, management aims at providing better working environment for the
employees, and sharing the gains of the company, etc., and workers should avoid going on
strikes and work hard to the best of their ability.
• This principle is clearly visible in the case of Japanese work culture. There is complete
openness between the workers and management. If workers are not satisfied with the
management, they wear a black badge and work for more than the normal working hours.

• 3. Cooperation, Not Individualism
• According to this, there should be cooperation between management and
workers instead of individualism.
• This principle is an extension of Principle ‘Harmony, Not Discord‘.
• Both management and workers should realize that they need each other. There
should be cooperation between them, and competition should be replaced by
cooperation.
• For achieving this principle, management should welcome the constructive
ideas and suggestions of the workers. The workers should be praised and
rewarded for the suggestions given if their suggestions were helpful. Workers
should be taken into consideration while taking important decisions. On the
other hand, workers should avoid unreasonable demands and strikes and
should work effectively and efficiently to achieve organizational goals.

• 3. Cooperation, Not Individualism
• Development of Workers to their Greatest Efficiency and Prosperity.
• Taylor focused on the efficiency of workers.
• According to him, every organization should follow the scientific method of
selection of workers, and each worker should be scientifically selected.
• Then they should be assigned work according to their mental, physical and
intellectual capabilities. To increase efficiency, training should be provided. This
increase in efficiency will be beneficial for both workers and management.

B)2): Administrative Approach (Henry Fayol (1849-1925): The
administrative theory of management is focused on principles that could
be used by managers to coordinate the internal activities of
organizations. The most prominent of the administrative theorists was
Henri Fayol. Henri Fayol (1849-1925), was a French industrialist and a
prominent European management theorist.
Henri Fayol is known as the Father of Management and he developed a
general theory of management. 14 principles of management are used
to manage an organization and are beneficial for prediction,
planning, decision-making, organization and process management,
control, and coordination.

• Features of Administrative Management:
1) Formalised Administrative Structure:
2) Division of labour:
3) Delegation of Power and Authority:

• Henry Fayol’s 14 Principles of Management:
1. Division of Work: The work should be divided among the individuals
on the basis of their specializations, so as to ensure their full focus on the
effective completion of the task assigned to them.
2. Authority and Responsibility: The authority and responsibility are
related to each other. Authority means the right to give orders while the
responsibility means being accountable. Thus, to whomsoever the
authority is given to exact obedience must be held accountable for
anything that goes wrong.

3. Discipline: The individuals working in the organization must be well-
disciplined. The discipline refers to the obedience, behavior, respect shown by
the employees towards others.
4. Unity of Command: According to this principle, an individual in the
organization must receive orders from only one supervisor. In case an
individual has the reporting relationship with more than one supervisor then
there may be more conflicts with respect to whose instructions to be followed.
5. Unity of Direction: Unity of direction means, all the individual or groups
performing different kinds of a task must be directed towards the common
objective of the organization.

6. Subordination of Individual to General Interest: According to this
principle, the individual and organizational interest must coincide to get the
task accomplished. The individual must not place his personal interest over
the common interest, in case there a conflict.
7. Remuneration of Personnel: The payment methods should be fair
enough such that both the employees and the employers are satisfied.
8. Centralization: This term refers to the degree to which subordinates
are involved in decision making.
Centralization refers to the degree to which subordinates are involved in
decision making. Whether decision making is centralized (to management)
or decentralized (to subordinates) is a question of proper proportion. The
task is to find the optimum degree of centralization for each situation.

9. Scalar Chain: This means there should be a proper hierarchy in the
organization that facilitates the proper flow of authority and
communication. It suggests that each individual must know from whom
he shall get instructions and to whom he is accountable to. Also, the
communication either going up or down must pass through each level of
authority. In certain circumstances where the quick flow of
communication is required, the rigidity of a scalar chain can pose
problems. Thus, Henry Fayol has suggested “gang plank” which means
anybody in the hierarchy can interact with each other irrespective of
their authority levels.

10. Order: This principle is related to the systematic arrangement of
things and people in the organization. This means every material should
be in its place, and there should be a place for every material. Likewise,
in the case of people, a right man should be in the right job.
11. Equity: All the employees in the organization must be treated equally
with respect to the justice and kindliness.
12. Stability of Tenure: The employees should be retained in the
organization, as new appointments may incur huge selection and training
cost.

13. Initiative: The manager must motivate his subordinates to think
and take actions to execute the plan. They must be encouraged to take
initiatives as this increases the zeal and energy among the
individuals.
14. Esprit de Corps: This means “unity is strength”. Thus, every
individual must work together to gain synergy and establish cordial
relations with each other.

Bureaucratic Management Theory

• Bureaucratic : (Max Weber)
• The Bureaucratic Theory is related to the structure and administrative process of the
organization and is given by Max Weber, who is regarded as the father of bureaucracy.
• Max Weber was a German sociologist who argued bureaucracy was the most efficient and
rational model private businesses and public offices could operate in. His bureaucratic theories
influenced generations of business leaders and politicians well into the 20th century.
• Max Weber's classical theory of management, often referred to as bureaucratic management,
presents a systematic approach to organizational structure and management.
• It emphasizes the importance of rules, hierarchy, and clear procedures to achieve
efficiency and effectiveness in organizations.
• What is Bureaucracy?: The term bureaucracy means the rules and regulations, processes,
procedures, patterns, etc. that are formulated to reduce the complexity of organization’s
functioning.
• Weber’s bureaucratic theory contributes significantly to the classical organizational theory which
explains that precise organization structure along with the definite lines of authority is required in
an organization to have an effective workplace.

• Key Characteristics of Bureaucratic Management
1.Hierarchical Structure: A clear chain of command exists within the organization,
with each level having defined authority and responsibility.
2.Rules and Procedures: Organizations operate based on a set of written rules and
procedures that govern all aspects of operations.
3.Impersonality: Decisions are made based on objective criteria rather than personal
relationships, ensuring fairness and consistency.
4.Specialization: Employees are assigned specific roles based on their expertise and
skills, promoting efficiency in task execution.
5.Merit-based Advancement: Employees are promoted based on their
qualifications and performance rather than favoritism.

• Purpose
1.Enhancing Efficiency: To streamline operations by minimizing ambiguity and uncertainty through established
rules and procedures.
2.Promoting Fairness: To ensure that decisions are made based on objective criteria, reducing biases in
management.
3.Providing Clarity: To create a well-defined organizational structure that clarifies roles, responsibilities, and
authority.
4.Facilitating Coordination: To improve coordination among various departments and levels within the
organization.
• Examples
• Indian Railways:
Indian Railways operates under a bureaucratic structure with a clear hierarchy, defined roles, and established
procedures for operations, ticketing, and maintenance.
1.State Bank of India (SBI):
SBI follows a bureaucratic model with a centralized structure, where policies and procedures are standardized
across its branches. Employees are trained to adhere to established rules and regulations.
2.Bharat Electronics Limited (BEL):
BEL employs a bureaucratic structure with clearly defined roles and responsibilities for its engineers and
administrative staff. The organization emphasizes documentation and compliance with regulatory standards.

• Quantitative approach:
• The quantitative approach evolved from mathematical and statistical solutions developed for
military problems during World War II.
• After the war was over, many of these techniques used for military problems were applied to
businesses.
• For example, one group of military officers, nicknamed the Whiz Kids, joined Ford Motor Company
in the mid-1940s and immediately began using statistical methods and quantitative models to
improve decision making.
• The quantitative approach to management involves the use of quantitative techniques, such as
statistics, optimization models, information models, and computer simulations, to improve decision
making.
• Example –
• Linear programming, is a technique that managers use to improve resource allocation decisions.
• Work scheduling can be more efficient as a result of critical-path scheduling analysis.
• The economic order quantity model helps managers determine optimum inventory levels.
• Another area where quantitative techniques are used frequently is in total quality management.

• Quantitative approach:
• Managers can use computer models to figure out the best way to do something — saving
both money and time. Managers use several science applications.
• Mathematical forecasting helps make projections that are useful in the planning process.
• How today’s managers use the quantitative approach
• The quantitative approach contributes directly to management decision making in the areas of
planning and control.
• For instance, when managers make budgeting, queuing, scheduling, quality control, and
similar decisions, they typically rely on quantitative techniques. Specialized software has
made the use of these techniques less intimidating for managers, although many still feel
anxious about using them. A quality revolution swept through both the business and public
sectors in the 1980s and 1990s.

• Behavioral Approach:
• The behavioral approach to management emphasizes the importance of
understanding human behavior in organizations.
• It focuses on how individual and group dynamics influence performance,
motivation, and overall workplace culture.
• The Behavioral approach assumes that social and psychological features of an
employee on individual basis and as a part of a workgroup needs to be given prime
importance.
• As management is all about getting things done by human resources and the
importance of human behavior in order to achieve efficient and desired results.
• In this approach, prominence is given to increase productivity through developing
human relations and motivating the employees.
• The core concepts of behavioral approach are leadership, motivation, participative
management, communication and group dynamics.

• Contemporary Approaches:
• The modern approach of management theory focuses on the complex
issues of the organization and the individuals working in that
organization.
• The modern management theory came into existence in the year 1950.
• Contemporary Approaches to Management provides a framework of
management practices based on more recent trends, such as globalization,
excellence models, productivity and quality issues.

• Systematic Approach:
• In the 1960, an approach to management appeared which try to unify the
prior schools of thought. This approach is commonly known as ‘Systems
Approach’.
• Ludwig von Bertalanffy is recognized as the founder of general system
theory. The system approach is based on the concept that an organization is a
system. A system is defined as a number of interdependent parts functioning
as a whole for some purpose. Here there are five components: inputs, a
transformation process, outputs, feedback, and the environment.
• The systems approach is very important in general management analysis.
Four especially ideas that have had substantial impact on management
thinking are the concepts of open versus closed systems, subsystems, and
interdependencies, synergy and entropy.

1. Open versus closed systems. According to Ludwig von Bertlanffy, there
are two basic types of systems: closed systems and open systems. Closed
system are not influenced by and do not interact with their environments.
Open systems interact with their environment. All organizations are open
systems, although the degree of interaction may vary.
2. Entropy. Entropy is a universal property of systems and refers to their
tendency to run down and die. A primary objective of management, form
systems perspective, is to avoid entropy.
3. Synergy. Synergy means that the whole is greater the sum of its parts.
Synergy is an important concept for managers in that it reinforces the need to
work together in a cooperative fashion.
4. Subsystems. A subsystem is a system within a system. From another
perspective, subsystems are parts of a system that depend on one another.

• Contingency Approach:
• The contingency approach to management is based on the idea that there is
no single best way to manage.
• Contingency refers to the immediate contingent circumstances.
• Effective organizations must tailor their planning, organizing, leading, and
controlling to their particular circumstances.
• managers should identify the conditions of a task, the requirements of the
management job, and people involved as parts of a complete management
situation.
• The contingency approach to management assumes that there is no
universal answer to many questions because organizations, people, and
situations vary and change over time.

• Managerial Competencies:
• Management competencies are the skills, habits, motives, knowledge
and attitudes necessary to successfully manage people. When developed,
management competencies promote better leadership and contribute to
business success.
• Management competencies are categorized as human capital which is
broadly defined as the knowledge and skills that contribute to workplace
productivity.
• Management competencies can be learned and developed, and it is
important to define key management competencies and measure the
proficiency of each leader, offering frequent assessments and feedback.

• How the Manager’s Job is Changing:
• Managers have always had to deal with changes taking place inside and
outside their organization. In today's world where managers everywhere
are dealing with the continued corporate ethics scandals, global economic
and political uncertainties, and technological advancements, change is a
constant.

• How the Manager’s Job is Changing:
1) Importance of customer to the managers job.
2) Importance of innovation to the managers job.
3) Importance of sustainability to the managers job.
4) Increased Competitiveness

Unit 1 - basic of marketing maba savitribai phule

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