Unit-I: Management: Concept, Evolution of Management thought -Contributions of

F.W.Taylor, Henri Fayol, Max Weber, Bernard, Elton Mayo. Functions, Roles and
Skills. Styles of Management - Japanese Vs American.
Management is a universal phenomenon. It is a very popular and widely used term. All
organizations - business, political, cultural or social are involved in management because it is the
management which helps and directs the various efforts towards a definite purpose.
According to Harold Koontz, Management is an art of getting things done through and with the
people in formally organized groups. It is an art of creating an environment in which people can
perform and individuals and can co-operate towards attainment of group goals.
According to F.W. Taylor, Management is an art of knowing what to do, when to do and see
that it is done in the best and cheapest way.
Management is a purposive activity. It is something that directs group efforts towards the
attainment of certain pre - determined goals. It is the process of working with and through others
to effectively achieve the goals of the organization, by efficiently using limited resources in the
changing world. Of course, these goals may vary from one enterprise to another. E.g.: For one
enterprise it may be launching of new products by conducting market surveys and for other it
may be profit maximization by minimizing cost.
Management involves creating an internal environment: - It is the management which puts into
use the various factors of production. Therefore, it is the responsibility of management to create
such conditions which are conducive to maximum efforts so that people are able to perform their
task efficiently and effectively. It includes ensuring availability of raw materials, determination
of wages and salaries, formulation of rules & regulations etc.
Therefore, we can say that good management includes both being effective and efficient. Being
effective means doing the appropriate task i.e, fitting the square pegs in square holes and round

pegs in round holes. Being efficient means doing the task correctly, at least possible cost with
minimum wastage of resources.

Management can be defined in detail in following categories :

1. Management as a Process
2. Management as an Activity
3. Management as a Discipline
4. Management as a Group
5. Management as a Science
6. Management as an Art
7. Management as a Profession
Management has been described as a social process involving responsibility for economical and
effective planning & regulation of operation of an enterprise in the fulfillment of given purposes.
It is a dynamic process consisting of various elements and activities. These activities are different
from operative functions like marketing, finance, purchase etc. Rather these activities are
common to each and every manger irrespective of his level or status.

Different experts have classified functions of management. According to George & Jerry, There
are four fundamental functions of management i.e. planning, organizing, actuating and
controlling. According to Henry Fayol, To manage is to forecast and plan, to organize, to
command, & to control. Whereas Luther Gullick has given a keyword POSDCORB where P
stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R
for reporting & B for Budgeting. But the most widely accepted are functions of management
given by KOONTZ and ODONNEL i.e. Planning, Organizing, Staffing, Directing and
Controlling.
For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each
function blends into the other & each affects the performance of others.

PLANNING
1. It is the basic function of management. It deals with chalking out a future course of action
& deciding in advance the most appropriate course of actions for achievement of predetermined goals. According to KOONTZ, Planning is deciding in advance - what to do,
when to do & how to do. It bridges the gap from where we are & where we want to be.
A plan is a future course of actions. It is an exercise in problem solving & decision
making. Planning is determination of courses of action to achieve desired goals. Thus,
planning is a systematic thinking about ways & means for accomplishment of predetermined goals. Planning is necessary to ensure proper utilization of human & nonhuman resources. It is all pervasive, it is an intellectual activity and it also helps in
avoiding confusion, uncertainties, risks, wastages etc.

2. ORGANISING
It is the process of bringing together physical, financial and human resources and developing
productive relationship amongst them for achievement of organizational goals. 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 personnels. To organize a business involves determining &
providing human and non-human resources to the organizational structure. Organizing as a
process involves:

Identification of activities.

Classification of grouping of activities.

Assignment of duties.

Delegation of authority and creation of responsibility.

Coordinating authority and responsibility relationships

3.Staffing
It is the function of manning the organization structure and keeping it manned. Staffing
has assumed greater importance in the recent years due to advancement of technology,
increase in size of business, complexity of human behavior etc. The main purpose o
staffing is to put right man on right job i.e. square pegs in square holes and round pegs in
round holes. According to Kootz & ODonell, Managerial function of staffing involves
manning the organization structure through proper and effective selection, appraisal &
development of personnel to fill the roles designed un the structure. Staffing involves:

Manpower Planning (estimating man power in terms of searching, choose the

person and giving the right place).

Recruitment, Selection & Placement.

Training & Development.

Remuneration.

Performance Appraisal.

Promotions & Transfer

4.Directing
It is that part of managerial function which actuates the organizational methods to work
efficiently for achievement of organizational purposes. It is considered life-spark of the
enterprise which sets it in motion the action of people because planning, organizing and staffing
are the mere preparations for doing the work. Direction is that inert-personnel aspect of
management which deals directly with influencing, guiding, supervising, motivating sub-ordinate
for the achievement of organizational goals. Direction has following elements:

Supervision

Motivation

Leadership

Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work.
Positive, negative, monetary, non-monetary incentives may be used for this purpose.
Leadership- may be defined as a process by which manager guides and influences the work of
subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from one
person to another. It is a bridge of understanding.
5.CONTROLLING
It implies measurement of accomplishment against the standards and correction of deviation if
any to ensure achievement of organizational goals. The purpose of controlling is to ensure that
everything occurs in conformities with the standards. An efficient system of control helps to
predict deviations before they actually occur. According to Theo Haimann, Controlling is the
process of checking whether or not proper progress is being made towards the objectives and
goals and acting if necessary, to correct any deviation. According to Koontz & ODonell
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. Therefore controlling has following steps:
a. Establishment of standard performance.
b. Measurement of actual performance.
c. Comparison of actual performance with the standards and finding out deviation if any.
d. Corrective action

Importance of Management
1. It helps in Achieving Group Goals - It arranges the factors of production, assembles and
organizes the resources, integrates the resources in effective manner to achieve goals. It
directs group efforts towards achievement of pre-determined goals. By defining objective
of organization clearly there would be no wastage of time, money and effort.
Management converts disorganized resources of men, machines, money etc. into useful
enterprise. These resources are coordinated, directed and controlled in such a manner that
enterprise work towards attainment of goals.
2. Optimum Utilization of Resources - Management utilizes all the physical & human
resources productively. This leads to efficacy in management. Management provides
maximum utilization of scarce resources by selecting its best possible alternate use in
industry from out of various uses. It makes use of experts, professional and these services
leads to use of their skills, knowledge, and proper utilization and avoids wastage. If
employees and machines are producing its maximum there is no under employment of
any resources.
3. Reduces Costs - It gets maximum results through minimum input by proper planning and
by using minimum input & getting maximum output. Management uses physical, human
and financial resources in such a manner which results in best combination. This helps in
cost reduction.
4. Establishes Sound Organization - No overlapping of efforts (smooth and coordinated
functions). To establish sound organizational structure is one of the objective of
management which is in tune with objective of organization and for fulfillment of this, it
establishes effective authority & responsibility relationship i.e. who is accountable to

whom, who can give instructions to whom, who are superiors & who are subordinates.
Management fills up various positions with right persons, having right skills, training and
qualification. All jobs should be cleared to everyone.
5. Establishes Equilibrium - It enables the organization to survive in changing
environment. It keeps in touch with the changing environment. With the change is
external environment, the initial co-ordination of organization must be changed. So it
adapts organization to changing demand of market / changing needs of societies. It is
responsible for growth and survival of organization.
6. Essentials for Prosperity of Society - Efficient management leads to better economical
production which helps in turn to increase the welfare of people. Good management
makes a difficult task easier by avoiding wastage of scarce resource. It improves standard
of living. It increases the profit which is beneficial to business and society will get
maximum output at minimum cost by creating employment opportunities which generate
income in hands. Organization comes with new products and researches beneficial for
society

LEVELS OF MANAGEMENT
The term Levels of Management refers to a line of demarcation between various managerial
positions in an organization. The number of levels in management increases when the size of the
business and work force increases and vice versa. The level of management determines a chain
of command, the amount of authority & status enjoyed by any managerial position. The levels of
management can be classified in three broad categories:
1. Top level / Administrative level
2. Middle level / Executory
3. Low level / Supervisory / Operative / First-line managers
Managers at all these levels perform different functions. The role of managers at all the three
levels is discussed below:

1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top
management is the ultimate source of authority and it manages goals and policies for an
enterprise. It devotes more time on planning and coordinating functions.
The role of the top management can be summarized as follows a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures,
schedules etc.
c. It prepares strategic plans & policies for the enterprise.
d. It appoints the executive for middle level i.e. departmental managers.
e. It controls & coordinates the activities of all the departments.
f. It is also responsible for maintaining a contact with the outside world.
g. It provides guidance and direction.
h. The top management is also responsible towards the shareholders for the
performance of the enterprise.
2. Middle Level of Management
The branch managers and departmental managers constitute middle level. They are
responsible to the top management for the functioning of their department. They devote
more time to organizational and directional functions. In small organization, there is only

one layer of middle level of management but in big enterprises, there may be senior and
junior middle level management. Their role can be emphasized as a. They execute the plans of the organization in accordance with the policies and
directives of the top management.
b. They make plans for the sub-units of the organization.
c. They participate in employment & training of lower level management.
d. They interpret and explain policies from top level management to lower level.
e. They are responsible for coordinating the activities within the division or
department.
f. It also sends important reports and other important data to top level management.
g. They evaluate performance of junior managers.
h. They are also responsible for inspiring lower level managers towards better
performance.
3. Lower Level of Management
Lower level is also known as supervisory / operative level of management. It consists of
supervisors, foreman, section officers, superintendent etc. According to R.C. Davis,
Supervisory management refers to those executives whose work has to be largely with
personal oversight and direction of operative employees. In other words, they are
concerned with direction and controlling function of management. Their activities include
a. Assigning of jobs and tasks to various workers.
b. They guide and instruct workers for day to day activities.
c. They are responsible for the quality as well as quantity of production.
d. They are also entrusted with the responsibility of maintaining good relation in the
organization.
e. They communicate workers problems, suggestions, and recommendatory appeals
etc to the higher level and higher level goals and objectives to the workers.
f. They help to solve the grievances of the workers.
g. They supervise & guide the sub-ordinates.
h. They are responsible for providing training to the workers.

i. They arrange necessary materials, machines, tools etc for getting the things done.
j. They prepare periodical reports about the performance of the workers.
k. They ensure discipline in the enterprise.
l. They motivate workers.
m. They are the image builders of the enterprise because they are in direct contact
with the workers.

HENRI FAYOLS 14 PRINCIPLES OF MANAGEMENT

A principle refers to a fundamental truth. It establishes cause and effect relationship between two
or more variables under given situation. They serve as a guide to thought & actions. Therefore,
management principles are the statements of fundamental truth based on logic which provides
guidelines for managerial decision making and actions. These principles are derived: a. On the basis of observation and analysis i.e. practical experience of managers.
b. By conducting experimental studies.
There are 14 Principles of Management described by Henri Fayol.
1. Division of Labor
a. Henri Fayol has stressed on the specialization of jobs.
b. He recommended that work of all kinds must be divided & subdivided and
allotted to various persons according to their expertise in a particular area.
c. Subdivision of work makes it simpler and results in efficiency.
d. It also helps the individual in acquiring speed, accuracy in his performance.
e. Specialization leads to efficiency & economy in spheres of business.
2. Party of Authority & Responsibility
a. Authority & responsibility are co-existing.
b. If authority is given to a person, he should also be made responsible.
c. In a same way, if anyone is made responsible for any job, he should also have
concerned authority.

d. Authority refers to the right of superiors to get exactness from their sub-ordinates
whereas responsibility means obligation for the performance of the job assigned.
e. There should be a balance between the two i.e. they must go hand in hand.
f. Authority without responsibility leads to irresponsible behavior whereas
responsibility without authority makes the person ineffective.
3. Principle of One Boss
a. A sub-ordinate should receive orders and be accountable to one and only one boss
at a time.
b. In other words, a sub-ordinate should not receive instructions from more than one
person because - It undermines authority
- Weakens discipline
- Divides loyalty
- Creates confusion
- Delays and chaos
- Escaping responsibilities
- Duplication of work
- Overlapping of efforts
c. Therefore, dual sub-ordination should be avoided unless and until it is absolutely
essential.
d. Unity of command provides the enterprise a disciplined, stable & orderly
existence.
e. It creates harmonious relationship between superiors and sub-ordinates.
4. Unity of Direction
a. Fayol advocates one head one plan which means that there should be one plan for
a group of activities having similar objectives.
b. Related activities should be grouped together. There should be one plan of action
for them and they should be under the charge of a particular manager.

c. According to this principle, efforts of all the members of the organization should
be directed towards common goal.
d. Without unity of direction, unity of action cannot be achieved.
e. In fact, unity of command is not possible without unity of direction.

Basis

Unity of command

Unity of direction

Meaning

It implies that a sub-ordinate should

receive orders & instructions from only
one boss.

It means one head, one plan for a

group of activities having similar
objectives.

Nature

It is related to the functioning of

personnels.

It is related to the functioning of

departments, or organization as a
whole.

Necessity

It is necessary for fixing responsibility of

each subordinates.

It is necessary for sound organization.

Advantage

It avoids conflicts, confusion & chaos.

It avoids duplication of efforts and

wastage of resources.

Result

It leads to better superior sub-ordinate

relationship.

It leads to smooth running of the

enterprise.

Therefore it is obvious that they are different from each other but they are dependent on each
other i.e. unity of direction is a pre-requisite for unity of command. But it does not automatically
comes from the unity of direction.
5. Equity
a. Equity means combination of fairness, kindness & justice.

b. The employees should be treated with kindness & equity if devotion is expected
of them.
c. It implies that managers should be fair and impartial while dealing with the
subordinates.
d. They should give similar treatment to people of similar position.
e. They should not discriminate with respect to age, caste, sex, religion, relation etc.
f. Equity is essential to create and maintain cordial relations between the managers
and sub-ordinate.
g. But equity does not mean total absence of harshness.
h. Fayol was of opinion that, at times force and harshness might become necessary
for the sake of equity.
6. Order
a. This principle is concerned with proper & systematic arrangement of things and
people.
b. Arrangement of things is called material order and placement of people is called
social order.
c. Material order- There should be safe, appropriate and specific place for every
article and every place to be effectively used for specific activity and commodity.
d. Social order- Selection and appointment of most suitable person on the suitable
job. There should be a specific place for every one and everyone should have a
specific place so that they can easily be contacted whenever need arises.
7. Discipline
a. According to Fayol, Discipline means sincerity, obedience, respect of authority
& observance of rules and regulations of the enterprise.
b. This principle applies that subordinate should respect their superiors and obey
their order.
c. It is an important requisite for smooth running of the enterprise.
d. Discipline is not only required on path of subordinates but also on the part of
management.
e. Discipline can be enforced if -

- There are good superiors at all levels.

- There are clear & fair agreements with workers.
- Sanctions (punishments) are judiciously applied.

8. Initiative
a. Workers should be encouraged to take initiative in the work assigned to them.
b. It means eagerness to initiate actions without being asked to do so.
c. Fayol advised that management should provide opportunity to its employees to
suggest ideas, experiences& new method of work.
d. It helps in developing an atmosphere of trust and understanding.
e. People then enjoy working in the organization because it adds to their zeal and
energy.
f. To suggest improvement in formulation & implementation of place.
g. They can be encouraged with the help of monetary & non-monetary incentives.
9. Fair Remuneration
a. The quantum and method of remuneration to be paid to the workers should be
fair, reasonable, satisfactory & rewarding of the efforts.
b. As far as possible it should accord satisfaction to both employer and the
employees.
c. Wages should be determined on the basis of cost of living, work assigned,
financial position of the business, wage rate prevailing etc.
d. Logical & appropriate wage rates and methods of their payment reduce tension &
differences between workers & management creates harmonious relationship and
pleasing atmosphere of work.
e. Fayol also recommended provision of other benefits such as free education,
medical & residential facilities to workers.
10. Stability of Tenure
a. Fayol emphasized that employees should not be moved frequently from one job
position to another i.e. the period of service in a job should be fixed.

b. Therefore employees should be appointed after keeping in view principles of

recruitment & selection but once they are appointed their services should be
served.
c. According to Fayol. Time is required for an employee to get used to a new work
& succeed to doing it well but if he is removed before that he will not be able to
render worthwhile services.
d. As a result, the time, effort and money spent on training the worker will go waste.
e. Stability of job creates team spirit and a sense of belongingness among workers
which ultimately increase the quality as well as quantity of work.
11. Scalar Chain
a. Fayol defines scalar chain as The chain of superiors ranging from the ultimate
authority to the lowest.
b. Every orders, instructions, messages, requests, explanation etc. has to pass
through Scalar chain.
c. But, for the sake of convenience & urgency, this path can be cut shirt and this
short cut is known as Gang Plank.
d. A Gang Plank is a temporary arrangement between two different points to
facilitate quick & easy communication as explained below:

In the figure given, if D has to communicate with G he will first send the
communication upwards with the help of C, B to A and then downwards with the
help of E and F to G which will take quite some time and by that time, it may not
be worth therefore a gang plank has been developed between the two.
e. Gang Plank clarifies that management principles are not rigid rather they are
very flexible. They can be moulded and modified as per the requirements of
situations
12. Sub-Ordination of Individual Interest to General Interest
a. An organization is much bigger than the individual it constitutes therefore interest
of the undertaking should prevail in all circumstances.
b. As far as possible, reconciliation should be achieved between individual and
group interests.
c. But in case of conflict, individual must sacrifice for bigger interests.
d. In order to achieve this attitude, it is essential that - Employees should be honest & sincere.
- Proper & regular supervision of work.
- Reconciliation of mutual differences and clashes by mutual agreement.
For example, for change of location of plant, for change of profit sharing
ratio, etc.

13. Espirit De Corps (can be achieved through unity of command)

a. It refers to team spirit i.e. harmony in the work groups and mutual understanding
among the members.
b. Spirit De Corps inspires workers to work harder.
c. Fayol cautioned the managers against dividing the employees into competing
groups because it might damage the moral of the workers and interest of the
undertaking in the long run.
d. To inculcate Espirit De Corps following steps should be undertaken

There should be proper co-ordination of work at all levels

Subordinates should be encouraged to develop informal relations among

themselves.

Efforts should be made to create enthusiasm and keenness among

subordinates so that they can work to the maximum ability.

Efficient employees should be rewarded and those who are not up to the
mark should be given a chance to improve their performance.

Subordinates should be made conscious of that whatever they are doing is

of great importance to the business & society.

e. He also cautioned against the more use of Britain communication to the

subordinates i.e. face to face communication should be developed. The managers
should infuse team spirit & belongingness. There should be no place for
misunderstanding. People then enjoy working in the organization & offer their
best towards the organization.
14. Centralization & De-Centralization
a. Centralization means concentration of authority at the top level. In other words,
centralization is a situation in which top management retains most of the decision
making authority.
b. Decentralization means disposal of decision making authority to all the levels of
the organization. In other words, sharing authority downwards is decentralization.
c. According to Fayol, Degree of centralization or decentralization depends on no.
of factors like size of business, experience of superiors, dependability & ability of
subordinates etc.
d. Anything which increases the role of subordinate is decentralization & anything
which decreases it is centralization.
e. Fayol suggested that absolute centralization or decentralization is not feasible. An
organization should strike to achieve a lot between the two.

Features of Principles of Management

1. Principles of Management are Universal
a. Management principles are applicable to all kinds of organizations - business &
non business.
b. They are applicable to all levels of management.
c. Every organization must make best possible use by the use of management
principles.
d. Therefore, they are universal or all pervasive.
2. Principles of Management are Flexible
a. Management principles are dynamic guidelines and not static rules.
b. There is sufficient room for managerial discretion i.e. they can be modified as per
the requirements of the situation.
c. Modification & improvement is a continuous phenomenon in case of principles of
management.
3. Principles of Management have a Cause & Effect Relationship
a. Principles of management indicate cause and effect relationship between related
variables.
b. They indicate what will be the consequence or result of certain actions. Therefore,
if one is known, the other can be traced.
4. Principles of Management - Aims at Influencing Human Behavior
a. Human behavior is complex and unpredictable.
b. Management principles are directed towards regulating human behavior so that
people can give their best to the organization.
c. Management is concerned with integrating efforts and harmonizing them towards
a goal.
d. But in certain situations even these principles fail to understand human behavior.
5. Principles of Management are of Equal Importance
a. All management principles are equally important.

b. No particular principle has greater importance than the other.

c. They are all required together for the achievement of organizational goals.

SCIENTIFIC MANAGEMENT BY TAYLOR

Fredrick Winslow Taylor ( March 20, 1856 - March 21, 1915) commonly known as Father of
Scientific Management started his career as an operator and rose to the position of chief
engineer. He conducted various experiments during this process which forms the basis of
scientific management. It implies application of scientific principles for studying & identifying
management problems.
According to Taylor, Scientific Management is an art of knowing exactly what you want your
men to do and seeing that they do it in the best and cheapest way. In Taylors view, if a work is
analysed scientifically it will be possible to find one best way to do it.
Hence scientific management is a thoughtful, organized, dual approach towards the job of
management against hit or miss or Rule of Thumb.
According to Drucker, The cost of scientific management is the organized study of work, the
analysis of work into simplest element & systematic management of workers performance of
each element.

Principles of Scientific Management

1. Development of Science for each part of mens job (replacement of rule of thumb)
a. This principle suggests that work assigned to any employee should be observed,
analyzed with respect to each and every element and part and time involved in it.
b. This means replacement of odd rule of thumb by the use of method of enquiry,
investigation, data collection, analysis and framing of rules.
c. Under scientific management, decisions are made on the basis of facts and by the
application of scientific decisions.
2. Scientific Selection, Training & Development of Workers

a. There should be scientifically designed procedure for the selection of workers.

b. Physical, mental & other requirement should be specified for each and every job.
c. Workers should be selected & trained to make them fit for the job.
d. The management has to provide opportunities for development of workers having
better capabilities.
e. According to Taylor efforts should be made to develop each employee to his
greatest level and efficiency & prosperity.
3. Co-operation between Management & workers or Harmony not discord
a. Taylor believed in co-operation and not individualism.
b. It is only through co-operation that the goals of the enterprise can be achieved
efficiently.
c. There should be no conflict between managers & workers.
d. Taylor believed that interest of employer & employees should be fully
harmonized so as to secure mutually understanding relations between them.
4. Division of Responsibility
a. This principle determines the concrete nature of roles to be played by different
level of managers & workers.
b. The management should assume the responsibility of planning the work whereas
workers should be concerned with execution of task.
c. Thus planning is to be separated from execution.
5. Mental Revolution
a. The workers and managers should have a complete change of outlook towards
their mutual relation and work effort.
b. It requires that management should create suitable working condition and solve
all problems scientifically.
c. Similarly workers should attend their jobs with utmost attention, devotion and
carefulness. They should not waste the resources of enterprise.
d. Handsome remuneration should be provided to workers to boost up their moral.
e. It will create a sense of belongingness among worker.
f. They will be disciplined, loyal and sincere in fulfilling the task assigned to them.

g. There will be more production and economical growth at a faster rate.

6. Maximum Prosperity for Employer & Employees
a. The aim of scientific management is to see maximum prosperity for employer and
employees.
b. It is important only when there is opportunity for each worker to attain his highest
efficiency.
c. Maximum output & optimum utilization of resources will bring higher profits for
the employer & better wages for the workers.
d. There should be maximum output in place of restricted output.
e. Both managers & workers should be paid handsomely.
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GEORGE ELTON MAYO (18801949)

was an Australian born psychologist,

industrial researcher and organizational theorist. Towards the end of his life, through his
association with the Harvard Business School and theHawthorne studies, he enjoyed a public
acclaim granted to few social scientists of his day. Mayo has been credited with making
significant contributions to a number of disciplines, including business management, industrial
sociology, philosophy, social psychology. His field research in industry had a significant impact
on industrial and organizational psychology. According to Trahair, Mayo "is known for having
established the scientific study of what today is called organizational behavior when he gave
close attention to the human, social, and political problems of industrial civilization while he was
a professor of industrial research at the Harvard Business School"
Mayo's work helped to lay the foundation for the human relations movement. He emphasized
that alongside the formal organization of an industrial workplace there exists an informal
organizational structure as well. Mayo recognized the "inadequacies of existing scientific
management approaches" to industrial organizations, and underlined the importance of
relationships among people who work for such organizations. His ideas on group relations were
advanced in his 1933 book The Human Problems of an Industrialized Civilization, which was
based partly on his Hawthorne research.

Mayo helped to lay the foundation for Human Relations Movement, and was known for his
industrial research including theHawthorne Studies and his book The Human Problems of an
Industrialized Civilization (1933). The research he conducted under the rubric of the Hawthorne
Studies in the late 1920s and early 1930s, underlining the importance of groups in affecting the
behaviour of individuals at work. Fritz J. Roethlisberger, Mayo's graduate assistant, and William
J. Dickson, head of the Department of Employee Relations at Western Electric, conducted the
bulk of the practical research, with Mayo rarely visiting the Hawthorne plant in Cicero,
Illinois. Mayo's team carried out a number of "experiments" to look at ways of
improving productivity. The research involved manipulating length of rest and lunch periods and
piecework payment plans. Mayo concluded that productivity partly depended on the informal
social patterns of interaction in the work group; Parsons, however, showed that the Hawthorne
studies, which were not really experiments, were too confounded to enable researchers to draw
firm conclusions. The qualitative aspects of the research suggested that norms of co-operation
among workers were related to productivity. Mayo, in communicating to business leaders,
advanced the idea that managers who understand the nature of informal ties among workers can
make decisions for management's benefit.
He concluded that people's work performance is dependent on both social issues and job content.
He suggested a tension between workers' 'logic of sentiment' and managers' 'logic of cost and
efficiency' which could lead to conflict within organisations.
Disagreement regarding his employees' procedure while conducting the studies:

The members of the groups whose behaviour has been studied were allowed to choose
themselves.

Two women have been replaced since they were chatting during their work. They were
later identified as members of a leftist movement.

One Italian member was working above average since she had to care for her family
alone. Thus she affected the group's performance in an above average way.

Summary of Mayo's Beliefs:

Individual workers cannot be treated in isolation, but must be seen as members of a

group.

Monetary incentives and good working conditions are less important to the individual
than the need to belong to a group.

Informal or unofficial groups formed at work have a strong influence on the behaviour of
those workers in a group.

Managers must be aware of these 'social needs' and cater for them to ensure that
employees collaborate with the official organisation rather than work against it.

Mayo's simple instructions to industrial interviewers set a template and remain influential
to this day:

Mayo's rules for conducting a clinical interview.

"Give your full attention to the person interviewed, and make it evident that you are
doing so.

Listen don't talk.

Never argue; never give advice.

Listen to: what he wants to say; what he does not want to say; what he can not say
without help.

As you listen, plot out tentatively and for subsequent correction the pattern that is being
set before you. To test, summarise what has been said and present for comment. Always do
this with caution that is, clarify but don't add or twist.

Remember that everything said must be considered a personal confidence.",

KARL EMIL MAXIMILIAN WEBER

Max Webers Bureaucratic theory or model is sometimes also known as the Legal-Rational
model. The model tries to explain bureaucracy from a rational point of view via nine (9) main
characteristics or principles, these are as follow:
Max Webers Bureaucratic Model (Legal-Rational Model):
Main Principles (Characteristics): 1. Specialized roles. 2. Recruitment based on merit (e.g.
tested through open competition). 3. Uniform principles of placement, promotion, and transfer in
an administrative system. 4. Careerism with systematic salary structure. 5. Hierarchy,
responsibility and accountability. 6. Subjection of official conduct to strict rules of discipline and
control. 7. Supremacy of abstract rules. 8. Impersonal authority. (e.g. Office bearer does not
bring the office with him). 9. Political neutrality.
Merits: Max Weber himself noted, real bureaucracy will be less optimal and effective than his
ideal type model. Each of Weber's principles can degenerate, more so, when it is utilized to
analyze the individual level in the organization. But when implemented in a group setting in
organizational, some form of efficiency and effectiveness can be achieved, especially with
regards to better output. This is especially true when the Bureaucratic model emphasis on
qualification (merits), specialization of job-scope (labour), hierarchy of power, rules and
discipline.
Demerits: However, sometimes competences, efficiency and effectiveness can be unclear and
contradictory especially when it contributes to oversimplified (of matters), dehumanized
bureaucracy due to its inflexibility in distributing the job-scope (as every workers have to
specialize from day one, and not rotate tasks, as fear of decrease output), tasks are often routine
and can contribute to boredom. Thus, employees can sometimes feel that they are not part of the

organizations work vision and missions. Consequently, they do not have any sense of
belongingness in the long term. Furthermore, this type of organization tends to invite
exploitation and under estimate the potential of the employees, as creativity of the workers are
brushed aside, in favour of strict adherence to rules, regulations and procedures
Key theories
Power and authority
Weber describes power as the probability of carrying out one's own will despite resistance or, at
its extreme, as the ability to force people to obey. It is not necessarily the same as leadership or
authority, but is invariably linked to them. Organisational power he links to structure and
authority and considers inherent in any hierarchy or bureaucracy. Invariably the effects of power
depend upon who has it, how that person is perceived, and the particular situation in which
power is invoked.
Weber identified three types of legitimate authority:
1. Charismatic authority: the leader is obeyed because of followers' faith in his or her special,
'supernatural',

qualities. Weber

proposed

in

his Theory

of

Social

and

Economic

Organisation (translated by A. M. Henderson and T. Parsons, New York, Free Press, 1947) that
the term 'charisma' was associated with someone who possesses exceptional, supernatural
qualities and who is thus set apart from ordinary people. These qualities constitute the basis on
which that individual is considered to be, and is treated as, a leader.
Commentators at the beginning of the 21st century might conclude that very few business leaders
could be said to have supernatural qualities. We must remember, however, that Weber was
arguing from a philosophical standpoint, not a current, pragmatic management one; we may
therefore understand 'supernatural' as being 'supernormal' and at the opposite end of a scale
balanced by 'rational'. While not considered supernatural, many business leaders have been
deemed special in some way, and have had attributed to them qualities which set them apart from
'ordinary people'. Indeed, research in the 1970s and 1980s by Warren Bennis suggested that
leaders do have qualities which set them apart, although he did not use the word 'supernatural'
and went on to suggest that leadership qualities can be developed.

Of Weber's three models of legitimate authority he thought charisma the least stable because its
inspirational and motivational qualities disappear when the leader relinquishes the post. For
Weber, charisma was not a sustainable option as the basis for authority. He advocated locating
legitimacy in something more lasting and systematic.
2. Traditional authority: leaders have authority by virtue of the status they have inherited - the
extent of their authority is determined by birth, custom, precedent and usage. Although Weber
derives his theory from a study of history, we can still sometimes witness today how many
positions of authority are handed from one generation to another, as firms establish dynasties,
and appointments have more to do with family ties than competence. Another characteristic of
organisations based on traditional authority is that things tend to be done in a particular way just
because 'they have always been done like that'.
In the competitive world of today, the dangers of this approach are only too apparent: larger
organisations get caught up in their own systems and either fail to spot when competitors are
catching them up or markets are slipping away, or else simply become trapped by their own
inertia. Precedent, rather than rational analysis, becomes the reason in itself for doing things.
Weber's search for a sustainable form of organisational authority based on rational analysis led
him to distinguish a third authority system.
3. Rational-legal authority: a bureaucracy, within which authority is both legal and rational
because it is exercised through a system of rules and procedures attached to the 'office' - the job
role - which an individual occupies.
Weber described how bureaucracy-based, rational-legal authority worked:

the organisation is structured around official functions which are bound by rules, and
each area has its own specified competence

the functions are structured into offices organised into a hierarchy that follows technical
rules and norms for which training is provided

the administration is separated from the ownership of the means of production

the rules, decisions and actions of the administration are recorded in writing.

Weber stated that the bureaucracy was technically the most efficient form of organisation
because, within it, work is conducted with precision, knowledge of files, continuity, discretion,
unity, strict subordination and reduction of friction.
Bureaucracies
Within bureaucracies organised along rational lines, the abuse of power by leaders is minimised
because:

offices are ranked in hierarchical order

operations are characterised by impersonal rules

officials are allocated specific duties and areas of responsibility

appointments are made on the basis of qualifications and suitability for the post.

Bureaucracies can represent an extreme of depersonalisation, because the roles of officials are
circumscribed by written definitions of their authority, and there is a set of rules and procedures
to cater for every contingency.
Weber was aware of the shortcomings of bureaucracies:

their characteristic information processing and filtering to the top also made them
cumbersome and slow to react

their machinery made it difficult to handle individual cases, because rules and procedures
required all individuals to be the same

bureaucratisation leads to depersonalisation.

Weber recognised that the more efficient a bureaucracy becomes, the more it succeeds in
excluding the personal, the irrational and the incalculable in favour of emotional detachment and
'professionalism'. Perhaps this goes a long way towards explaining why Weber is held in low
esteem in today's business climate of change and uncertainty

CHESTER BARNARD

was one of the Harvard Circle of American management

theorists, of which Elton Mayo was another prominent member. At a time when communism
seemed a real threat, Barnard came to believe that social science could be the key to establishing
a stable society. His work centred on a description of the organisation as a co-operative system,
and described an optimal organisation structure, focusing on the role of executives in creating the
conditions for effectiveness and efficiency.

Although he was not an academic but a practising business leader, Barnard wrote a book
called The functions of the executive in 1938, which Andrea Gabor has described as the
century's seminal book on corporate leadership (in Capitalist philosophers, Wiley, 2000).
Barnard also authored several papers, a selection of which were published in Organization and
management: selected papers (1948).
Barnard died in 1961, just two months after he had given an interview to management professor,
William Wolf. The resulting book, Conversations with Chester I. Barnard, covered many
aspects of Barnard's thinking.
Key theories
Organisation and communication
Chester Barnard's key ideas centre on the importance of individuals and communication to
organisation structure. His writing, while conveying the practical experience upon which it is
based, is often quite theoretical, and the difficult terminology can make it hard to follow. The
ideas presented are part of a holistic managerialist philosophy proposing that managers in large
organisations should be as dedicated to social reform and modernisation as their governmental
counterparts, with the moral authority to harness technology and markets for the public good.
In The functions of the executive he defines an organisation as a system of consciously coordinated activities or forces of two or more persons. Two key words used in this definition are

system and co-ordinated. Barnard saw a successful organisation as a co-operative system in

which effective communication enables individuals to achieve much more collectively than they
could in isolation. With this view, Barnard was the first to utilise the systems approach to
management. He believed that organisational survival and success depended on the creation of
co-operation by managers, and their navigation of the tension between individuals' personal
motives (which he called efficiency) in order to satisfy the objectives of the organisation (which
he called effectiveness) to achieve a balance between the two.
The functions of the executive
In simple terms, Barnard saw the three main functions of an executive to be:

Implementation and development of an effective system of communication

Appointment and retention of effective workers

Motivation of workers.

Viewing the communication system in an organisation as the key to organisational achievement,

Barnard set out three principles for effective communication:

Everyone in the organisation must know what the channels of communication are

Everyone must have access to a formal communication channel

Lines of communication should be kept short and direct.

As part of his communications theory, Barnard's acceptance theory of authority proposes that a
manager exerts authority from above, and success depends on its acceptance by the employees
managed. In this way, employees determine how authoritative their manager is and, for this
reason, the main focus of an executive needs to be on creating the right conditions to increase
acceptance levels. Barnard suggested that this could be done if:

Managers are clear in what they ask employees to do,

employees understand what their manager wants them to do, and

employees are capable of complying.

Employees must also understand how their work helps to achieve organisational objectives.

Barnard also saw a need for executives to focus on strategy, and inThe functions of the
executive he outlined the process of strategic planning, which he saw as vital to putting the
organisation on the road to achieving its overall objectives.
Authority and the informal organisation
One of the most important ways in which Barnard proposed that executives can increase
employees' acceptance of their authority and orders is through their recognition and use of three
zones, setting boundaries within which people evaluate orders, defined as zones of indifference,
neutrality and unacceptability. The Zone of Indifference for orders is the highest acceptable range
within which orders will be obeyed, and Barnard believed that managerial work involved
widening this zone through the use of inducements and incentives. With seemingly modern
insight, he suggested that material incentives were insufficient, and that personal incentives, such
as increased power or prestige, would be more effective.
Gabor claims that Barnard was the first theorist to elaborate on the importance of the informal
organisation, and recognise the influence of what is now understood as corporate culture and its
associated values and rituals. Barnard emphasised the executive's important role in maintaining
the informal organisation through using intangible influence to shape values and promote
conformity and self-discipline. He believed that values should be in-built and coherent with all
the other aspects of the organisation to promote organisational success. This is closely related to
his acceptance theory of authority, since acceptance will be greater where employees believe that
actions will contribute to the common organisational goal.

MANAGEMENT STYLE - MEANING AND DIFFERENT TYPES OF

STYLES
The art of getting employees together on a common platform and extracting the best out of them
refers to effective organization management.
Management plays an important role in strengthening the bond amongst the employees and
making them work together as a single unit. It is the managements responsibility to ensure that
employees are satisfied with their job responsibilities and eventually deliver their level best.
The management must understand its employees well and strive hard to fulfill their expectations
for a stress free ambience at the workplace.
What is Management Style ?
Every leader has a unique style of handling the employees (Juniors/Team). The various
ways of dealing with the subordinates at the workplace is called as management style.
The superiors must decide on the future course of action as per the existing culture and
conditions at the workplace. The nature of employees and their mindsets also affect the
management style of working
Different Management Styles
1. Autocratic Style of Working

In such a style of working, the superiors do not take into consideration the ideas
and suggestions of the subordinates.

The managers, leaders and superiors have the sole responsibility of taking
decisions without bothering much about the subordinates.

The employees are totally dependent on their bosses and do not have the liberty to
take decisions on their own.

The subordinates in such a style of working simply adhere to the guidelines and
policies formulated by their bosses.They do not have a say in managements
decisions.

Whatever the superiors feel is right for the organization eventually becomes the
companys policies.

Employees lack motivation in autocratic style of working.

2. Paternalistic Style of Working

In paternalistic style of working, the leaders decide what is best for the employees
as well as the organization.

Policies are devised to benefit the employees and the organization.

The suggestions and feedback of the subordinates are taken into consideration
before deciding something.

In such a style of working, employees feel attached and loyal towards their
organization.

Employees stay motivated and enjoy their work rather than treating it as a burden.

3. Democratic Style of Working

In such a style of working, superiors welcome the feedback of the subordinates.

Employees are invited on an open forum to discuss the pros and cons of plans and
ideas.

Democratic style of working ensures effective and healthy communication

between the management and the employees.

The superiors listen to what the employees have to say before finalizing on
something.

4. Laissez-Faire Style of Working

In such a style of working, managers are employed just for the sake of it and do
not contribute much to the organization.

The employees take decisions and manage work on their own.

Individuals who have the dream of making it big in the organization and desire to
do something innovative every time outshine others who attend office for fun.

Employees are not dependent on the managers and know what is right or wrong
for them.

5. Management by Walking Around Style of Working

In the above style of working, managers treat themselves as an essential part of

the team and are efficient listeners.

The superiors interact with the employees more often to find out their concerns
and suggestions.

In such a style of working, the leader is more of a mentor to its employees and
guides them whenever needed.

The managers dont lock themselves in cabins; instead walk around to find out
what is happening around them.

DIFFERENCE IN AMERICAN AND JAPANESE MANAGEMENT STYLE.

It is widely recognized that Japanese and American styles of businessmanagement practice differ
broadly across the range of supervisory style, decision-making, communications, management
controls, and interdepartmental relations