As Per Updated Syllabus

UGC - NET
MANAGEMENT
UNIT - 1
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Unit-1
Management - 1

1. MANAGEMENT
1.1 Concept of Management
Management is the art of getting things done through other people. Managers are in
a position to make important decisions, allocating resources and directing the
activities of others to attain a common goal. They work within a consciously
coordinated social unit, composed of two or more people, that functions on a
relatively continuous basis to achieve a common goal or a set of goals. This social
unit is what we call an organization. From manufacturing and service firms to
schools, colleges, retail stores, police departments, hospitals, churches, local, state
and central government agencies, are all examples of organizations. Managers are
people who oversee and direct the activities of an organization to achieve a common
goal. Sometimes they are called administrators in case of non-profit organizations.

1.2 Management Process

Management is a process which brings the scarce human and material resources
together and motivates people for the achievement of objectives of the organization.
Management is not a one time act but an on-going series of interrelated activities.
The sum total of these activities is known as management process. It consists of a
set of interrelated operations or functions necessary to achieve desired organizational
goals. A process is a systematic way of doing things. It is concerned with conversion
of inputs into outputs. An analysis of management process will enable us to know
the functions which managers perform.
1. Goal Oriented Process : The process of management comes with the purpose of
achieving the organizational goals correctly and meaningfully. Hence, it is a goal
oriented process.
2. All Pervasive : Management is used by all departments of an organization and by
al organizations, irrespective of size, nature and location.
It is also practiced at each level of an organization.
3. Multidimensional : Management covers all aspects of an organization ranging
from work, people and operations. Different mechanisms and systems are set up for
each aspect. Continuous

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4. Process : A series of functions are performed in organization by all its managers

simultaneously. It keeps running in a cycle that repeats itself over and over again.
5. Group Activity : Management is never done in solidarity. It is a group activity
that involves participation of all the people of an organization, including the
managers and the workers, for the desired achievement of objectives.
6. Intangible Force : Management in its essence cannot be seen or touched, and
hence is termed as intangible. But its effect can be felt and measured based on the
results achieved by way of the organizational functions.

1.3 Theories and Approaches

The six most popular theories of management may be delineated in the following
discussion:
(i) Scientific Management Theory: F.W Taylor tried to find out effective
work standards against which the worker's efficiency and performance can
be judged in order to enhance the productivity of the worker. A scientific
study of work was done in order to improve the efficiency of the workers.
The principles of scientific management are :
(a) Scientific Task Planning : It involves finding the amount of work which an
average worker can perform during a day under normal working conditions.
Time and motion studies have been developed for this purpose. The tasks need
to be designed scientifically and not by rule of thumb. It aims at eliminating
unnecessary and wasteful motions and finding out the minimum time required
to do the job.
(b) Standardization : In order to increase the efficiency of the employees as well
as the organization, it is important to set standards in advance to decide work
procedures, working conditions, quality parameters and time schedules.
(c) Scientific Selection and Training of Workers : It involves finding the right
person for the right job by matching the capabilities of the worker with the
nature of the job.
(d) Functional Foremanship : Different departments need to be controlled by
respective supervisors within a factory. These supervisors are functional
specialists who plan and provide relevant advice to the workers. This helps to
differentiate planning from the doing function. According to Taylor, eight
different supervisors are needed to give instructions
• Route clerk
• Instructions card clerk
• Cost and time clerk
• Shop disciplinarian
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• Speed boss
• Inspector
• Repair boss
• Gang boss
(e) Differential Piece Rate System : Wage incentives were provided to motivate
workers. Wages would depend on the piece work distribution of gains
between employers and employees.
(f) Harmony and not Discord : Employers and employees need to work in
mutual cooperation with each other for the well being of the organization as
a whole.
(ii) Administrative Management Theory : The administrative management
theory propounded by Henry Fayol suggests a rational way of designing
an organizational structure. It is characterized by a clear division of labour,
delegation of power and authority, a formalized chain of authority and so
on. Fayol has laid down the following 14 principles of management which
are the critical components of the administrative management theory:
1. Division of Work : The principle of division of work suggests that to achieve
the overall goal of an organization, the work should be divided into separate
jobs and employees need to be allocated to each of these jobs based on their
skills and interests. The idea is to promote specialization in the job the
employee is assigned to with the assumption that performing the same job on
a regular basis will result in greater efficiency.
2. Authority and Responsibility : The basis of this principle is that the person
assigned with a task should given a certain amount of authority to carry out
the task. In addition to that he needs to assume the responsibilities attached
with the task and be accountable to his supervisor. There should be a balance
between authority and responsibility. Responsibility without authority would
hinder individual performance. Authority without responsibility would lead
to inefficiency, misuse of power and wastage of resources,
3. Discipline : In order to run the organization smoothly and effectively, it is
important to have a sense of discipline in terms of adherence to organizational
policies, rules and regulations. An organization may have its own reward-
punishment mechanism, general and specific rules and assign supervisors to
oversee the activities of the employees in order to ensure discipline. An
employee needs to be obedient to the authority and abide by the rules of the
organization.
4. Unity of Command : According to this principle, an employee needs to be
accountable to only one boss. Only one supervisor should guide the
employees under him. Having several supervisors will lead to confusion and
hinder performance on the job.
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5. Unity of Direction : The principle of unity of direction puts emphasis on the

fact that only one manager should guide the actions of a particular department
or a function or a group of people. For instance, the production department
should have only one manager who will oversee the activities of that
department only. All the employees assigned to the department will be
accountable to that manager. This ensures that the activities are directed
towards achieving a common goal or objective.
6. Subordination of Individual Interest to the General Interest : As per this
principle, there should be harmony between individual interests of the
employee and the organization's interest as a whole. The organization's
interest should be prioritized over individual interests for the benefit of the
organization in its efforts to achieve a common goal.
7. Remuneration of Personnel : Compensation for performance should be fair,
just and equitable. Henry Fayol takes into account both monetary and non-
monetary compensation for good performance. Non-monetary compensation
results in greater motivation levels and develops a bond between the
employees and the organization as a whole.
8. Centralization and Decentralization : This principle suggests that while
there should be delegation of power to lower levels of management to carry
out certain tasks, the task of making important decision should be centralized
at the top-level of management. There should be a balance between
centralization and decentralization to ensure harmonious progress of the
organization.
9. Scalar Chain : There should be a line of authority from the top level to the
bottom level establishing a hierarchy in the organization to channel the flow
of communication.
10. Order : According to this principle, it is the responsibility of the managers to
ensure that there is social order in the organization apart from a work
environment that is clean, safe and healthy. The employees need to have the
right amount of resources at their disposal so that the organization can
function smoothly.
11. Equity : The management should treat all the employees fairly and equally.
There shouldn't be any partiality or favoritism. The employees must be placed
at the right jobs at the right time and must be treated impartially.
12. Stability of Tenure of Personnel : High employee turnover will adversely
impact an organization. To reduce absenteeism and turnover, employer must
be provided with job security with a stability in their tenure.
13. Initiative : According to Fayol, employees must be encouraged to come up
with new ideas. Ideas are a source of strength for the organization. To keep

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emplovees engaged and interested, management should encourage employees

to take initiative.
14. Esprit de Corps : Fayol suggests that the management should contribute to
the development of culture within an organization and an atmosphere of trust
autual understanding. This will enhance the morale of employees and they
will be motivated to work in unity and promote team spirit in the organization.

(iii) Bureaucracy Theory of Management : Max Weber, the father of bureaucracy

theory of management, viewed bureaucracy in a positive life and believed it to be
more rational and efficient as compared to historical predecessors. Strict rules and
expert authoritative guidance formed the basis of the bureaucratic system which laid
the foundation for many government and military organizations. The essential
elements of the theory were divided into two. The first involved structuring an
organization into a hierarchy and the second included setting up clearly defined rules
to help govern an organization and its members.
(iv) Human Relations Theory (Neo-Classical) : While the classical theories
emphasized the importance of formal structure, it ignored the most crucial element
of managing and organization, i.e., the human nature. The neo-classical theory
gained its roots back in the 1920s with the Hawthorne studies which laid foundations
for an informal organization which acted as agents for social change. Also known as
the "behavioural theory of organization" or "human relations approach", the neo-
classical theory emphasized the following principles:
Individual : Each individual in an organization is motivated by different needs and
should be considered as interacting with several social and economic factors within
the organization.
The Work Group : Social interactions between workers result in an informal
structure within the formal structure of an organization and this organization thrives
on the synergistic benefits that results from the co-ordination and team spirit among
the different work groups in the organization.
Participative Management : Communication is crucial to the efficiency of an
organization. To ensure that communication flows freely across various levels,
workers at each level of the organization are encouraged to participate in the decision
making process.
The features of the neo-classical theory of management can be listed in the following
manner:
• It focuses on the human aspect of an organization rather than a formal
structure.

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• It identifies organization as an informal body where each individual is

provided with an opportunity to voice out his needs.
• The concept of informal organization overcomes the shortcomings of a formal
organization which emphasizes hierarchy over people's needs. The concept of
an informal organization has resulted in decentralization enabling people to
decide their own plans of actions to take responsibility for their work.
• Decentralization has given rise to a flat structure within an organization as
compared to the tall structure of hierarchy in classical theory.
(V) Systems Theory : According to the systems approach, the organization is a
system of interconnected mutually dependent sub-systems which have their own
sub-systems.
The organization consists of three basic elements :
• Components (individual, formal and informal organization, patterns of
behaviour, role comprehension by individual and the physical environment)
• Linking processes- (communication, balance and decision making)
• Goals of the organization (stability, growth and interaction within members
of the organization for mutual advantage)
• Carzo and Yanauzas have identified three sub-systems within an organization:
Technical Sub-System : It is a formal arrangement of functions which includes
knowledge and techniques to transform inputs into output, the tools and equipment
required and the employee skills necessary for performing the various functions of
a job.
Social Sub-System : The social sub-system is a product arising out of the social
interactions and shared values of people interacting within an organization. It
comprises individuals, informal groups, unwritten values and norms that govern the
organization.
Power Sub-System : Power is the capacity to get things done through others by
using force or compulsion. The formal structure of an organization plays a
significant role in the distribution of power. Employees may attain power through
their skills, knowledge and competency to take the right decisions to accomplish the
desired goals of an organization.
(vi) Theory X and Y: This theory is an integration of assumptions, generalizations
and hypothesis relating to human tendencies towards work and organization. Mc
Gregor has made two sets of assumptions.
Theory X : Theory X managers have a pessimistic view of their people. They
assume that employees are dislike work and are naturally unmotivated. As a result,
they think that team members need to be prompted, rewarded or punished constantly

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to ensure that they complete their tasks. Organizations with a Theory X approach
usually have several tiers of managers and supervisors to direct workers oversee their
activities. Delegation of authority is very minimál, and control remains firmly
centralized. Managers are more authoritarian and actively intervene to get things
done.
Work in organizations that are managed like this can be mundane,routine, repetitive
and people are often motivated with a "carrot and stick" approach. Compensation
and performance appraisals are based on tangible results, eg., sales figures or product
output, and are used to control staff and "keep tabs" on them. The negative
assumptions about McGregor's Theory X are
Employees inherently dislike work and try to avoid it. Employees should be coerced
to perform under supervision.
• Employees will deter from taking responsibilities.
• Employees need for directions for performing task.
• Employees display little ambitions, want security.
Theory Y : Theory Y managers tend to have an optimistic, positive opinion of their
people. The style of management is usually decentralized and participative which in
turn encourages a more collaborative, trust-based relationship between managers
and their team members. People have greater responsibility, and managers
encourage them to develop their skills while continually suggesting improvements.
Regular appraisals take place. However, unlike in Theory X organizations, they are
used to encourage open communication rather than control staff. Theory y
organizations give employees frequent opportunities for promotion.
This style of management assumes that workers are :
• Employees consider work as natural as rest or play.
• People exercises self direction and self-control in attaining goals.
• People are committed to their responsibilities.
• People have need for self-actualization and self-esteem.
• People are happy to work on their own initiative.
• People are more involved in decision making.
• People view work as fulfilling and challenging.
• People solve problems creatively and imaginatively.
Theory Y is viewed by McGregor as superior to Theory X, which, he says, reduces
workers to "cogs in a machine," and likely demotivates people in the long term. Who
is father of Administrative Management Theory ?
(Dec. 2012)

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(A) Max Weber

(B) Frank Gilbraith
(C) Henry Fayol
(D) Henry Gantt
Sol. (C) The administrative management theory propounded by Henry Fayol
suggests a rational way of designing an organizational structure. It is characterized
by a clear division of labour, delegation of power and authority, a formalized chain
of authority and so on. Fayol laid down the 14 principles of management which are
the critical components of the administrative management theory.
1.4 Management Skills and Roles
Henry Fayol also regarded as "Father of Modern Management" divided activities
of industrial enterprise into six groups:
• Technical (production).
• Commercial (buying, selling and exchange).
• Financial (sources and uses of funds).
• Security (protection of property).
• Accounting (auditing and statistics).
• Managerial (planning, organizing, directing, coordinating, and controlling).
In order to accomplish the smooth conduct of the above activities, Fayol laid down
that a good manager must possess a combination of the following qualities:
1. Physical (good health, appealing and good communication skills).
2. Mental (ability to learn, understand and interpret and possessing the quality
of adaptability).
3. Moral (fairness and integrity while dealing with others).
4. Educational (good breadth of general knowledge and familiarity with business
related matters and others)
5. Technical (expertise in his field)
6. Experience (dealing with routine and unexpected situations with ease).
7. Business quality (well-versed with accounting principles and ability to
determine the sources and uses of funds).
8. Mintzberg's, in his observations, identified three interrelated managerial roles,
viz.,

Management Roles
Henry Mintzberg's, in his observation interpersonal, informational and decisional
Interpersonal roles involve the responsibilities of performing certain routine duties
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of a legal or social nature such as the role of a figurehead like the principal of a
college or a factory supervisor, leadership roles like hiring, training, motivating and
directing employees and the role of a liaison who maintains a network of outside
contacts who provide favors and information. For instance, a marketing manager
who gets information related to quality control from the concerned department
within the organization develops an internal liaisonship. When he makes efforts in
maintaining contacts with other trade associations and clients, he is involved in an
outside liaisonship.
It is often found that managers collect information from external sources through
media, other institutions and by communicating directly with other people to develop
an understanding of current trends, tastes and preferences of the public and a
competitor analysis. This is an informational role of a monitor. In this capacity, there
are certain managers responsible to summarize the data and transmit the information
to the relevant organizational members. These managers may be called
disseminators. Similarly, the role of a spokesperson is also informational in nature
where he represents an organisation to outsiders.
Decisional roles include four types of roles that involve making choices. As an
entrepreneur, the role of a manager is to initiate projects and oversee the activities
which he feels will improve an organization's performance. Disturbance handlers are
managers who take corrective action in case of deviation from performance
standards and in response to unforeseen problems. Similarly, it is the task of resource
allocators to allocate the various human, physical and monetary resources optimally.
Lastly, as negotiators, managers need to discuss issues and bargaining with other
units to gain advantages for their own unit.
Managerial Skills
Managers need to possess certain skills and competencies to perform these roles in
order to achieve the goals of an organization. Robert Katz has classified managerial
skills into four broad categories. These skills may be broadly classified into
(a) Technical Skills : The ability to apply specialized knowledge and expertise
involve technical skills such as professionals like doctors, civil engineers who
have acquired these skills through extensive formal education. Also many
people acquire technical skills while working on the job.
(b) Human Skills : Technically proficient people may lack the ability to
empathize with the needs of other people or weak at managing conflicts.
Human skills come to play in such situations where it is important to
understand, communicate with, motivate and support other people both
individually and within groups.

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