PRINCIPLES AND PRACTICE OF

MANAGEMENT

ANIMESH BANKER
ASSISTANT PROFESSOR
 HISTORY OF MANAGEMENT

• Schools of Management Thought, Classical Approaches:

Systematic Management, Scientific Management,
Administrative Management, Human Relations Movement
and Contemporary Approaches: Quantitative Management,
Organizational Behavior, Systems Theory, Contingency
Theory
 CLASSICAL APPROACHES

KAUTILYA’S CONTRIUTION TO MANAGEMENT:

The king – the leader
The minister – the manager
The country – the market
The fortified city – head office
The treasury – Finance dept
The Army - your team
The Ally – The friend/consultant
 TAYLOR’S SCIENTIFIC MANAGEMENT

• F.W. Taylor (1856 –1915) is known as the “Father of Scientific Management”. He

joined as a mechanic at Midvale Steel Company in U.S.A at 1878. He became
chief engineer in the year 1884 in the same company.
• While serving as a Chief Engineer of Midvale Steel Company, Taylor made
several important contributions, which are classified under scientific
management.
• Scientific management means application of scientific methods to the problems
of management. Taylor advocated scientific task setting based on time and
motion study, standardization of materials, tools and working conditions,
scientific selection and training of workers and so on.
 PRINCIPLES OF SCIENTIFIC MANAGEMENT

• Science, not rule of thumb: For solving problems and making

decisions, the manager should adopt scientific attitude and use
scientific thinking and methods. The ‘rule of thumb’ or ‘Hit or miss’
approach should be replaced.
• Harmony, not discord: All the departments and workers are a part
of an organization. There should be complete harmony or coordination
in their functioning and any kind of clash or conflict should not be
allowed to crop in and, if it arises, should be reduced to a minimum.
 PRINCIPLES OF SCIENTIFIC MANAGEMENT

• Cooperation, not individualism: Instead of fostering individualism,

importance of cooperative group efforts should be recognised. Because,
organizational objectives depends upon the group efforts not for individuals.
• Maximum, not restricted output: Production should be carried out up to
the maximum capacity available in a unit.
• Development of each man to his greater efficiency and prosperity:
For the prosperity of individual workers as well as the organization, the
efficiency level of workers should be increased by providing scientific training
and developing their potential abilities to the maximum.
 TECHNIQUES OF SCIENTIFIC MANAGEMENT

• FUNCTIONAL FOREMANSHIP
• STANDARDIZATION AND SIMPLIFICATION OF WORK
• WORK STUDY
• DIFFERENTIAL PIECE WAGE SYSTEM
 FAYOL’S ADMINISTRATIVE MANAGEMENT

• Henri Fayol (1841-1925) is considered the ‘Father of administrative

management theory’ with focus on the development of broad administrative
principles applicable to general and higher managerial levels. Foyal started his
career as a junior engineer in a coal mining company in France in 1860 and
became its general manager in 1880.
• Henry Fayol is considered the father of modern theory of general and
industrial management. He divided general and industrial management into six
groups:
• Technical activities: Production, manufacture, adaptation.
• Commercial activities: Buying, selling and exchange.
• Financial activities: Search for and optimum use of capital.
• Security activities: Protection of property and persons.
• Accounting activities: Stock-taking, balance sheet, cost, and
statistics.
• Managerial activities: Planning, organization, command, co-
ordination and control.
 HUMAN RELATION APPROACH

• Under this approach Elton Mayo, Mary Parker, Follet, and Douglas McGregor
have been the main contributors to this approach.
• The human relations approach is concerned with recognition of the
importance of human element in organisations. It revealed the importance of
social and psychological factors in determining workers’ productivity and
satisfaction. It was instrumental in creating a new image of man and the work
place
 HAWTHORNE EXPERIMENTS

• Illumination Experiment: This experiment was conducted to establish

relationship between output and illumination.
• The output tended to increase every time as the intensity of light was
improved. But the output again showed an upward trend when the illumination
was brought down gradually from the normal level.
• Thus, it was found that there is no consistent relationship between output of
workers and illumination in the factory.
• There were some other factors which influenced the productivity of workers
when the intensity of light was increased or decreased
• Relay Assembly Room Experiment: In this experiment, a small homogeneous
work-group of girls was constituted.
• Several new elements were introduced in the work atmosphere of this group. These
included shorter working hours, rest pauses, improved physical conditions, friendly
and informal supervision, free social interaction among group members, etc.
• Productivity and morale increased considerably during the period of the experiment.
• Morale and productivity were maintained even if improvements in working conditions
were withdrawn.
• The researches concluded that socio-psychological factors such as feeling of being
important, recognition, attention, participation, cohesive workgroup, and non-directive
supervision held the key for higher productivity.
• Bank Wiring Observation Room Experiment:
• This experiment was conducted to study a group of workers under conditions
which were as close as possible to normal.
• This group comprised of 14 workers. After the experiment, the production
records of this group were compared with their earlier production records.
• There were no significant changes in the two because of the maintenance of
‘normal conditions’
• Mass Interview Programme:
• The researchers interviewed a large number of workers with regard to their
opinions on work, working conditions and supervision.
• Initially, a direct approach was used whereby interviewers asked questions
considered important by managers and researchers.
• Later, this approach was replaced by an indirect technique where the
interviewer simply listed to what the employees had to say. The findings
confirmed the importance of social factors at work in the total work
environment.
 CONTRIBUTIONS OF HUMAN RELATIONS
APPROACH OR HAWTHORNE STUDIES

• Social System: The organization in general is a social system composed of

numerous interacting parts. The social system defines individual roles and
establishes norms that may differ from those of the formal organization.
• Social Environment: The social environment on the job affects the workers
and is also affected by them. Management is not the only variable. Social and
psychological factors exercise a great influence on the behavior of workers.
Therefore, every manager should adopt a sound human approach to all
organizational problems.
• Informal Organization: The informal organization does also exist within the
frame work of formal organization and it affects and is affected by the formal
organization.
 CONTRIBUTIONS OF HUMAN RELATIONS
APPROACH OR HAWTHORNE STUDIES

• Group Dynamics: At the workplace, the workers often do not act or react
as individuals but as members of groups. The group determines the norms of
behaviour for the group members and thus exercises a powerful influence on
the attitudes and performance of individual workers. The management should
deal with workers as members of work group rather than as individuals.
• Informal Leader: The informal leader sets and enforces group norms. He
helps the workers to function as a social group and the formal leader is
rendered ineffective unless he conforms to the norms of the group.
• Conflicts: There may arise conflicts between the organisational goals and
group goals. Conflicts will harm the interest of workers if they are not handled
properly. Conflicts can be resolved through improvement of human relations in
the organisation.
 CONTRIBUTIONS OF HUMAN RELATIONS
APPROACH OR HAWTHORNE STUDIES

• Communication: Two-way communication is necessary because it carries

necessary information downward for the proper functioning of the
organization and transmits upward the feelings and sentiments of people who
work in the organization. It will help in securing workers’ cooperation and
participation in the decision-making process. Workers tend to be more
productive when they are given the opportunity to express their feelings,
opinions and grievances. This also give them psychological satisfaction.
• Non-economic Rewards: Money is only one of the motivators, but not the
sole motivator of human behavior. The social and psychological needs of the
workers are very strong. So non-economic rewards such as praise, status,
interpersonal relations, etc. play an important role in motivating the
employees. Such rewards must be integrated with the wages and fringe benefits
of the employees.
 QUANTITATIVE APPROACH

• This approach is also called ‘Mathematical’ , ‘Operations Research’ or

‘Management Science’ approach. The basic feature of the quantitative
management thought is the use of mixed teams of scientists from
several disciplines.
• The techniques commonly used for managerial decision-making include
Linear Programming, Critical Path Method (CPM), Programme
Evaluation Review Technique (PERT), Games Theory, Queuing Theory
and Break-Even Analysis.
 STEPS OF PROBLEM SOLVING IN QA

• Dividing problems into small and simple

components
• Gathering required information on each
component
• Analysis of data so collected
• Finding out solution to problem in hand.
• The quantitative approach which involves use of knowledge
and skills of several other disciplines such as statistics,
engineering and accounting etc. has contributed
significantly to management theory and behaviour.
• This approach has very limited application that too only in
respect of problem solving and decision-making.
 SYSTEMS APPROACH

• Systems approach of management represents new thinking and latest

developments related to organization and management.
• The term system may be defined as a set of interrelated and interacting
components assembled in a particular sequence as to produce some results.
These components may also viewed as sub-systems of larger system.
• “A system is composed of related and dependent elements which, when in
interactions, form a unitary whole. It is simply an assemblage or combination of
things or parts, forming a complex whole. Its important feature is that it is
composed of hierarchy of sub-systems.
 ORGANIZATION AS A SYSTEM

• A system is goal-oriented.
• A system consists of several sub-systems which are interdependent and
inter-related.
• A system is engaged in processing or transformation of inputs into outputs.
• An organization is an open and dynamic system. It has continuous interface
with the external environment as it gets inputs from the environment and also
supplies its output to the environment. It is sensitive to its environment such
as government policies, competition in the market, technological advancement,
tastes of people, etc.
• A system has a boundary which separates it from other systems.
 CONTRIBUTUIONS OF MICHAEL PORTER

•Competitive Advantage
•Five Force Model
•Value chain analysis
•Generic business strategies
•Diamond model
PORTER 5 FORCE MODEL
DIAMOND MODEL
 ORGANIZATIONAL BEHAVIOR

• Organizational behavior is the study and application of knowledge about how

people—as individuals and groups—act within organization. It strives to
identify ways in which people can act more effectively. —Keith Davis
• Organizational behavior can be defined as the understanding; prediction and
management of the human behavior affecting the performance of the
organizations. —Luthans
MAJOR COMPONENTS OF OB