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Lecture - 1

Points to be Covered :

• What is Management?
• Concept of management
• Managers and Management
• Management as a process, Discipline, human activity,
• Definition of Management
What do you think about?

What is Management?
A. Managers and Management
• Managers in today’s market must update tools and
principles on a continuous basis.

• Management development is increasingly global in

outlook and places a high value on contributing to
organizational effectiveness and competitive advantage.

• To be successful a manager must use and integrated

approach, using a combination of tools and principles.
B. Management & Development
• High performance leading organizations are increasingly
distinguished by 7 features:
1. Linking management development to business plans and
2. Being boundless, flat, nonhierarchical
3. Using global and cross cultural orientation
4. Individualizing learning that is focused within the context of
organizational learning
5. Applying customized training aligned with corporate
6. Employing a career development focus
7. Focusing on the development of core competencies.
C. Management Affects Everyone
• Our society depends on the goods and
services provided by different types of
organizations that individuals manage.
• All organizations are guided and
directed by the decisions of one or
more individuals who are commonly
known as managers.
Management Affects Everyone
Peter Drucker, a nationally recognized management
consultant describes 3 major tasks of managers as:

1. To decided the purpose and mission of the

2. To make work productive.
3. To manage social impacts and responsibilities.
What is Management?

Management as a Process

What does statements like –

“ That is a well-managed company “ mean?

They seem to imply that management is some

type of work or set of activities and that these
activities are performed quite well and
sometimes not so well.
1. Management as a Discipline
Classifying management as a discipline suggests that
there is a body of knowledge that can be learned.
(1) Management is a subject with principles, concepts,
and theories.
(2) A critical purpose of studying management is to learn
how in the process of managing to apply principles,
concepts, and theories of management and this is
particularly emphasized throughout your academic
(3) You will assume the role of a manager even if this is
not your current position. Why?
To begin to think, analyze, and apply management
theories, concepts and principles within your setting. It is
never to early to start thinking like a manager.
2. Management is also
a Human Activity
• As a human activity management emphasizes
the importance of employees with whom
managers work and whom they manage in
accomplishing an organization’s objectives.
• In organizations, people are the most important
asset. Successful managers understand this and
recognize the need to establish a strong bond
between the organization and the relationships of
the manager and the people they manage.
3. Management As a Career

• We are emphasizing management through our course

experiences because we recognize that in today’s
environment which is fast changing and competitive.
We can contribute to successful organizations by
providing students with a solid foundation of
experience in thinking like a manager while they are
learning about the organization.
• Spend this all IV semester thinking about the
management theories and principles that can
contribute positively to your organization. And also
think about how you would manage each situation for a
more positive outcome.
Definition of Management
To elaborate the general conceptualization of management,
consider the following representative sampling of
• "[Management aims to] accomplish group purposes with
the least expenditure of material or human resources"
(Koontz 1969).
• "[Management aims to ensure] that the organization serves
its mission in an effective way, and also that it serve the
needs of those who control or otherwise have power over
the organization (such as its owners, government agencies,
unions, pressure groups)" (Mintzberg 1983).
• "Management is the art of getting things done through
other people" (Hellriegel and Slocum 1986).

• "Management is the effective and efficient integration and

coordination of resources to achieve desired objectives"
(Hitt, Middlemist and Mathis 1989).

• "Management is the process of working with and through

others to achieve organizational objectives in a changing
environment. Central to this process is the effective and
efficient use of limited resources" (Kreitner 1989).
• The management process is an integrated whole even
thought we may describe the process as a series of
separate activities to understand the parts.

• The management functions as planning, organizing,

and controlling linked together by leading.
End of Lecture - 1

Lecture - 2
Points to Cover:

• Functions of Management
• Learning How to Manage
What are the important functions of
• Decision Making • Organizing
• Controlling • Coordinating
• Scheduling • Staffing
• Research & Development • Selecting
• Training & Development • Guiding
• Quality Control • Directing
• Planning • Follow up
• These plans may differ in focus from goals for
the short or long term but as a whole these
plans are the primary tools for preparing for
and dealing with changes in the
organization’s environment.
• The organizing, leading, and controlling
functions all come from planning.
• Planning gives Manager some purpose and
• Proper planning helps in the process of motivation
• Planning provides a framework for decision making
• Proper planning results in effective utilization of
organizational resources
• Accurate forecast for future events
• Improves competitive strength of the company
• Formal planning forces Manager to examine all
areas in the organization
• The purpose of the organizing function is to
create a structure of task and authority
relationships to achieve the organization’s
• Organizing can be viewed as turning plans
into action and this allows an organization to
function effectively as a cohesive whole.
 To establish hierarchy of power and responsibility
 Authority should flow from top to bottom (Scalar
Principle, Chain of Command)
 There should be no confusion to whom he reports
and who will report to him.
 Clarify the exact role of supervisors, his limits of
authority and responsibilities
 Line Function and Staff function should be kept
The controlling function of management
requires 3 elements:
1. Established standards of performance.
2. Information that indicates deviations between actual
performance and the established standards.
3. Action to correct performance that does not meet
these standards.

Types of Coordination:

• Internal and External Coordination

• Vertical and Horizontal Coordination
• Procedural and Substantive Coordination

• Leading is the management process that integrates

everything else a manger does.
• Leadership is a difficult concept to define but means
the ability to influence others to pursue a common
• Good leaders are typically driven by an overriding
vision or mission.
Learning How to Manage
• Management course is trying to help you develop
your knowledge, attitudes and skills. And it will
teach you how to apply your formal education so
that once you become a manager you will
understand how to face challenges and make
• The term management refers to the body of
knowledge, concepts and procedures used by
• A great deal of management knowledge comes
from the autobiographies of people who practiced
Learning How to Manage (Cont.)
Many disciplines have contributed to the study of
management, such as –
• Social scientists,
• Psychologists,
• Sociologists and others.

Consider management a social phenomenon and the

manager to be an important social resource to
scientifically understand and study.

Other professions like mathematics, accounting,

philosophy and numerous others have contributed
applications to the practice of management.
End of Lecture - 2

Lecture - 3

Approaches to Management

Points to Cover:
Classical Approach
• Contribution of F.W. Taylor
• Contribution of MaxWebber
• Contribution of HenryFayol
4.5 Classical Management Theory
4.5.1 Scientific Management
4.5.2 Administrative Management
4.5.3 Bureaucratic Organization
4.5.4 Criticisms on Classical Management Theory

4.6 Neo-Classical Theory

4.6.1 Human-Relations School
4.6.2 Behavioural Schools

4.7 Modem Management Theory

4.7.1 Systems Theory
4.1.2 Contingency Theory
4.7.3 Organizational Humanism
4.7.4 Management Science
Management Approaches

Management knowledge is the product of 3

basic approaches:
(1) The Classical Approach
(2) The Behavioral Approach
(3) The management Science Approach
The Classical Approach

• The serious study of management began in the late

19th century with the need to increase the efficiency
and productivity of the workforce.
• The classical approach to management can be
understood by looking at 2 perspectives:
1. Scientific management concentrated on the problems
of lower-level managers
2. Classical organizational theory focused on problems
of top-level managers.
• At the turn of the 20th century, business was
expanding and creating new products and
new markets, but labor was in short supply.

• The solutions were

(1) Substitute capital for labor or
(2) Use labor more efficiently.
1. Scientific management
(Classical approach)

• Frederick W. Taylor made an important contribution

to scientific management. He observed workers
producing far less than capacity in steel firms. He
recognized there were no studies to determine
expected daily-output per worker in the form of
work standards and the relationship between these
standards and wages. Then he tried to find the one
best way to do a job, determining the optimum work
pace, the training of people to do the job properly
and successful rewards for performance but using
an incentive pay system.
Taylor’s work lead to the following 4 principles:

Principle 1. Study the way workers perform their tasks,

gather all the informal knowledge that workers possess,
and experiment with ways to improves the performance
of tasks.
Principle 2. Codify the new methods of performing tasks
into written rules and Standard Operating Procedures
Principle 3. Carefully select workers so that they possess
skills and abilities that match the needs of the task and
train them to perform according to rules and procedures.
Principle 4. Establish a fair or acceptable level of
performance for a task and then develop a pay system
that awards acceptable performance.
2. Classical Organizational Theory
(Classical approach)
While scientific management focused on the
management of work, the Classical organizational
approach focused on the management of
The classical organizational theory focus was on –
(1) Developing principles that could guide the design,
creation, and maintenance of large organizations and
(2) To identify the basic functions of managing
Engineers were the main contributors to scientific
management while practicing executives were the
major contributors to classical organizational theory.
The Contributors to Classical Organizational
Theory: Max Weber

• Max Weber was the primary architect of the theory of

the organization as a bureaucracy.

• His view of a bureaucracy was a smoothly functioning,

highly efficient machine in which each part is tuned to
perform its prescribed function.
Max Weber believed that an efficient organization should be
based on 5 principles

Principle 1. In a bureaucracy, a manager’s formal authority

comes from the position held in the organization.
Principle 2. In this context people should occupy positions
because of their performance, not because of their social
standing or personal contacts.
Principle 3. The extent of each position’s formal authority and
task responsibilities should be clearly understood.
Principle 4. Positions should be arranged hierarchically to
that authority is exercised effectively and employees know
to whom they are to report and who reports to them.
Principle 5. Managers must create a will-defined systems of
rules, standard operating procedures, and norms to control
behavior within an organization.
End of Lecture - 3

Lecture - 4
Points to Cover:

• Contribution of Henry Fayol

• Contribution of classical approach
• Limitations of classical approach
• Behavioural Approach
• Hawthorne studies
Contribution of Henry Fayol
(Father of Modern Operational Management):
Fayol’s activities in Industrial Undertaking:
(About General Management-1916 in French, Work published in
English-1929 Very few copies, 1949 his work is published in US)
Fayol found that the activities in an industrial undertaking could be
divided into Six groups as below -
1. TECHNICAL - production, manufacture, adaptation;
2. COMMERCIAL - buying & selling - exchange (banking, insurance,
warehousing, advertising);
3. FINANCIAL - search for an optimum use of capital;
4. SECURITY - of property & personnel;
5. ACCOUNTING - stocktaking, balance sheets, costs, statistics;
6. MANAGERIAL - planning, organisation, command, co-ordination &
The Contributors to Classical Organizational
Theory: Henry Fayol
Henry Fayol was the other major contributor and devised his
14 principles of effective management:

Principle 1. Division of Labor/work: Advocated specialization

and increasing worker’s responsibilities.

Principle 2. Management Authority and Responsibility:

Managers must have the authority to give orders and be
responsible for effectiveness of their departments.

Principle 3. Unity of Command: Employees should receive

orders from and report to only one supervisor.
Henry Fayol (Cont.)
Principle 4. Scalar Chain (Chain of Supervisors):The
principle suggests that there should be a clear line of
authority from top to bottom linking all managers at all
levels. It is considered a chain of command. It involves a
concept called a "gang plank" using which a subordinate
may contact a superior in case of an emergency, defying the
hierarchy of control.

Principle 5. Centralization: Managers must decide how much

authority to centralize at the top and how much to give to

Principle 6. Unity of Direction: All workers should be

committed to the same plan of action.
Principle 7. Equity: Workers are expected to
perform at high levels and to be treated with
respect and justice.

Principle 8. Order (Sequence): Order is the

methodical arrangement of jobs to provide the
greatest benefits and career opportunities.

Principle 9. Initiative: Managers must encourage

workers to act on their own to benefit the
Henry Fayol (Cont.)
Principle 10. Discipline: Employees would be
expected to be obedient, energetic and
concerned about the organization’s welfare.

Principle 11. Remuneration: Managers should use reward

systems, profit sharing and bonuses to acknowledge
high performance.

Principle 12. Stability of Tenure of Personnel: Long term

employment helps employees develop the skills to
make significant contributions.
Principle 13. Subordination of Individual to
general Interest : Employees subordinate their
individual interest to those of the firm.

Principle 14. Espirit de Corps: “ In union there is

a strength”. Importance of a shared
commitment and enthusiasm in an effective
Contributions of the Classical Approach
• The greatest contribution of the classical approach
was the identification of management as an
important element of organized society.
• The identification of management functions:
planning, organizing and controlling provided the
basis for training new managers and was a
valuable practice.
• Many management techniques used today: time
and motion analysis, work simplification, incentive
wage systems, production scheduling,
personnel testing, and budgeting are
techniques from the classical approach.
Limitations of the Classical Approach

• One major criticism is that the majority of insights are

to simplistic for today’s complex organization.
• The classical approach and the scientific management
approach worked in organizations that were very
stable and predictable and today little of that
End of Lecture - 4

Lecture - 5
Points to Cover:
• Behavioral Science Approach
• Management Science Approach
• Contribution of MS Approach
• Limitations of MS Approach
Second Approach
Behavioral Approach

The behavioral approach to management has 2 branches:

1. The Human relations approach from the 1950’s and

2. The behavioral science approach.

What is Human Relations Approach?
The roots of this approach are found in Elton Mayo’s
Hawthorne Studies.
• In the human relations approach managers must know
why their subordinate behave as they do and what
psychological and social factors influence them.

• Advocates of this approach try to show how the process

and functions of management are affected by differences
in individual behavior and the influence of groups in the

• This approach requires managers to recognize employees’

need for recognition and social acceptance and this results
in training in human relation skills for managers.
The Behavioral Science Approach
The main contributors of this approach are-
Burrhus F. Skinner, Abraham H. Maslow , Douglas McGregor
and Mary Parker Follett .
Other contributors in this field include –
F. Fiedler, V. Vroom, F. Hertzberg, and K. Thomas.

• The individuals in the behavioral science branch of the

behavioral approach believe that the human is more
complex than the “economic man” .
• The behavioral science approach concentrates more
on the nature of work itself and the degree to which it
can fulfill the human need to use skills and abilities.
• Mary Parker Follett provided much of the management
theories helping organizations recognize that they could
be viewed form the perspective of individual or group
behavior. She was a social philosopher whose writings
provided a more people-centered view of the organization
than the predominant scientific management writing.

• According to Follett, the manager’s job was to harmonize

and coordinate group efforts and managers and workers
should view themselves as partners in a common project.
Managers would act more from their knowledge of human
behavior than from their formal authority.
The Behavioral Science Approach
• The Hawthorne Studies: A series of research studies
conducted at the Hawthorne Works of General Electric
helped lend support to the behavioral approach to
management theory.
• The research used varying lighting levels in the plant’s
secretarial pool to determine the effects of different levels
on productivity expecting productivity levels to drop when
lighting levels dropped. The Result was surprising:
productivity only dropped when workers could no longer
see well enough to do their work.
• The results showed that the presence of the researchers
was affecting the results because the workers enjoyed the
attention and produced the results they believed the
researchers wanted.
• Summary: The Hawthorne effect was used to describe this
effect of increased productivity due to increased attention.
Contributions of
Behavioral Approach
• Contributions of the Behavioral Approach
include increased use of teams to
accomplish organizational goals, focus
on training and development of employees,
and the use of innovative reward and incentive
• In addition the focus on modern management
theory resulted in empowering employees through
shared information.
Limitations of the Behavioral Approach

• The limitations included the difficulty for

managers in problem situations and the fact
that human behavior is complex. This
complicated the problem for managers trying
to use insights from the behavioral sciences
which often changed when different
behavioral scientists provided different
Third Approach
The Management Science Approach

• The Management Science approach is a modern

version of the early emphasis on the “management
of work” in scientific management. It features the
use of mathematics and statistics to aid in resolving
production and operations problems, thus focusing
on solving technical rather than human behavior
• The management science approach was used in
World War II when the English formed teams of
scientists, mathematicians, and physicist into units
called operations research teams, and today
businesses use these teams to deal with operating
Contributions of the Management
Science Approach

• Most important contributions are in production

management focusing on manufacturing
production and the flow of material in a plant and
in operations management solving production
scheduling problems, budgeting problems and
maintenance of optimal inventory levels.
Limitations of the Management Science
• The shortfall of this approach is that
management science does not deal
with the people aspect of an
End of Lecture - 5

Lecture - 6
See the discussion on Compaq:

No one Approach is self sufficient

in itself.

Need of Integrating all these

three approaches
Attempts to Integrate the
Three Approaches to Management
• One attempt to integrating the three approaches to
management is the Systems Approach. The Systems
Approach stresses that organizations must be viewed
as systems in which each part is linked to each other.

• The system’s approach views the elements of an

organization as interconnected and as being linked to
its environment.
• It is important to understand that most organizations
must operate as open systems to survive and use a
systems perspective to management. And the
objectives of the individual parts of the organization
must be compromised for the objectives of the entire
System Approach
Systems approach is looking at a manager's job. The
systems approach takes managers' thinking beyond a
concentration on the individual or the group. It gives
managers a wider view and makes them consider not only
other groups and departments within the organization but
also other organizations outside of their own.

A society is a system of organizations. Taken to the extreme,

the world is a system of organizations, each interacting with
others, but not necessarily with all the others.
System Approach
Systems approach is looking at a manager's job. The
systems approach takes managers' thinking beyond a
concentration on the individual or the group. It gives
managers a wider view and makes them consider not only
other groups and departments within the organization but
also other organizations outside of their own.

A society is a system of organizations. Taken to the extreme,

the world is a system of organizations, each interacting with
others, but not necessarily with all the others.
• The contingency theorists believe that. Paul Hersey has
developed a most workplace situations are too complex to
analyze and control as the scientific management
approach suggests situationalist theory of leadership. He
believes managers should not ascribe to one best
approach. Instead managers should identify the
appropriate principles, along with relevant contingency
variables and then evaluate these factors.
• In summary, the contingency approach involves identifying
the important variables in different situations, evaluating
the variables, and then applying appropriate management
knowledge and principles in selecting an effective
approach to the situation.
Systems thinking reminds us to look beyond ourselves and our
immediate work group and product. We are required to
consider how our activities affect others and how their
activities affect us.

Closed System
Open System
• The other approach is the Contingency
Approach. The Contingency Approach
stresses that the correctness of a
managerial practice is contingent on how it
fits the particular situation.
Contingency approach
Another approach to describing what managers do
is the contingency approach. It emphasizes the
need for organizations to identify the variables
which are significant for them in any particular
situation. This approach is known as the
contingency approach.
The contingency approach specifically identifies the internal
and external factors which influence the organization at any
one time. It makes managers realize that because of
differences in size, goals, working methods and people, it is
difficult to find principles of management that can be
universally applied. The contingency approach also helps
managers to identify which managerial practice is most
appropriate in a given set of circumstances.
For the practicing managers, the contingency approach is
very useful in that it constantly reminds them of the
complexity of the world in which they are operating. It
reminds them that they need to take an active role in
assessing which possible solution to a problem will work
best in the specific situation. They need to take into
consideration the effects of their decisions on other
departments as well as interested parties outside the
• Although both the systems approach and the
contingency approach have developed value
to insights on management. It is early in their
stage of development and the report card is
not complete on how these approaches will
contribute compared to other methods.
End of Lecture - 6

Lecture - 7
Points to cover-

• What is administration?
• Difference between Administration and
What is Administration?
Definitions of administration:
• A method of tending to or managing the affairs of a some group
of people (especially the group's business affairs)
• The persons (or committees or departments etc.) who make up
a body for the purpose of administering something; "he claims
that the present administration is corrupt"; "the governance of
an association is responsible to its members"; "he quickly
became recognized as a member of the establishment"
• The act of administering medication
• Government: the act of governing; exercising authority;
"regulations for the governing of state prisons"; "he had
considerable experience of government"
• The act of meting out justice according to the law.
Administration in the nutshell

The key to understanding of what

administration means lies in the following
It represents functioning of an organization
as “People running processes based on
rules using tools”
A process (aka business process) is a set of activities (operations, tasks)
aimed at creating a desirable outcome. Typical examples of processes
are sales (convincing a potential customer to buy one of our
product/services), service delivery (e.g., fixing a customer problem),
purchasing (choosing, buying and paying for things we need), product
development, etc.
Figure shows The different processes are connected through people.
• Some activities completed in the frame of a process belong to the
category of doing something in the real world, like –
– going to a customer site and fixing some technical problem
during service delivery.
– getting instructions on where to go, and
– reporting back
on amount of time spent for fixing the problem, belong to
They are needed to ensure the processes producing desirable
For example, back reporting is needed for the finance department
being able to send an invoice and ultimately get paid.

• The goal of administration (more exactly administrative activities) is to

ensure smooth running of the organization’s processes by
coordinating people participating in the processes, and providing
them with information needed for completing their assignments.
• Administration deals with gathering, processing, and
communicating information. Practically, everybody working
for an organization participates in the administrative
activities. Even those who do not hold any managerial
position participate when receiving written or oral
instructions and reporting back on the outcome of their
work. Those who have managerial positions complete much
more administrative activities, for example, they are
engaged in planning of various processes, and assigning
resources to various do it in the real world activities.
• The administration is regulated by rules (operational
instructions, or procedures) that prescribe or recommend
who should be doing what and in what order in each type
of the processes. Rules can exist in a written form or as a
tradition. They can even be incorporated in computerized
tools. To carry out administrative activities people employ
tools. Typical tools here are communication channels, e.g.
mail, email, telephone, chats, and information storage
means, e.g., paper folders, shelves, boxes, computer
servers, information systems etc.
Administrative quality can be evaluated based on three parameters:
• Quality and efficiency of communication. Quality ensures that all
information needed by recipient is transferred to him/her correctly.
Efficiency ensures that time required for communication is kept to
minimum. This time, besides the time for technical information
transfer, encompasses time required for finding all information that
needs to be transferred and time required to comprehend the
information received.
• Quality and efficiency of information storage and retrieval. Quality
ensures that all relevant information related to a process is stored
and can be retrieved. Efficiency ensures reasonable time required for
storing, and retrieving the information.
• Quality and efficiency of control over processes. Quality ensures that
any process that needs attention gets it. For example, if there is an
urgent task assigned to a person who cannot complete it, it should be
reassigned to somebody else. Efficiency ensures that the needs for
attention are discovered and dealt with promptly.
The parameters above are not independent; on the
contrary, they are intrinsically interconnected
Difference (Comparison) Between
Management and Administration

Basis of difference Administration Management

It is concerned about
It puts into action the
the determination of
policies and plans laid
Nature of work objectives and major
down by the
policies of an

It is a determinative It is an executive
Type of function
function. function.

It takes decisions
It takes major decisions
within the framework
Scope of an enterprise as a
set by the
Basis of difference Administration Management

It is a middle level
Level of authority It is a top-level activity.
It is a group of
It consists of owners managerial personnel
who invest capital in and who use their
Nature of status
receive profits from an specialized knowledge
enterprise. to fulfill the objectives of
an enterprise.

It is popular with
government, military, It is used in business
Nature of usage
educational, and enterprises.
religious organizations.
Basis of difference Administration Management

Its decisions are

Its decisions are
influenced by public
influenced by the
Decision making values, opinions,
and beliefs of the
policies, social, and
religious factors.
Planning and Motivating and
organizing controlling
Main functions
functions are functions are
involved in it. involved in it.
It needs
administrative It requires technical
rather than activities.
technical abilities.
End of Lecture -7

Lecture - 8

• Theory X and Theory Y

• Schools of Management Thoughts
Abraham Maslow’s
Hierarchy of Needs


Based on needs satisfaction
Douglas McGregor
Theory X & Y 1906-1964

Theory X Assumptions
• Dislike work –will avoid it Theory Y Assumptions
• Must be coerced, controlled, • Do not dislike work
directed, or threatened with • Self direction and self control
punishment • Seek responsibility
• Prefer direction, avoid
• Imagination, creativity
responsibility, little ambition, want
widely distributed
• Intellectual potential only
partially utilized
Douglas McGregor Theory X & Y

• Few companies today still use

Theory X

• Many are trying Theory Y


Experiential Exercise: Theory X and Theory Y Scale

• Description of Theory X

In this theory management assumes employees are

inherently lazy and will avoid work if they can. Because of
this, workers need to be closely supervised and
comprehensive systems of control put in place. A
hierarchical structure is needed, with narrow span of
control at each level, for effective management.
According to this theory employees will show little
ambition without an enticing incentive program and will
avoid responsibility whenever they can.
Description of Theory Y

Management influenced by this theory assumes

that employees are ambitious, self-motivated,
anxious to accept greater responsibility and exercise
self-control, self-direction, autonomy and
empowerment. Management believes that
employees enjoy their work. They also believe that,
given a chance, employees have the desire to be
creative at their work place and become forward
looking. There is a chance for greater productivity
by giving employees the freedom to perform to the
best of their abilities, without being bogged down
by rules.
Management Schools
1. Human relations school has already been
discussed explicitly.
2. The traditional schools of management is the same
as administrative management of classical theory.
3. The Empirical schools of management shares a
number of basic premises of traditional style and
emphasizes the case study approach. The essence
of this style is that the practitioners do enunciate
general guidelines for other or later managers.
4. The decision theory is a branch of the applied probability
theory, which evaluates consequences of decisions. The
decision theory is often used as economical instrument.
Two well-known methods in addition are e.g. the simple
efficiency analysis (NWA) or the more precise Analytic
Hierarchy Process (AHP), where criteria and alternatives
are represented, compared and evaluated, in order to find
the optimal solution to a decision or a problem definition.
The Decision-theory school concentrates on logic and the
rational process involved in decision- making and believes
that the more rational the decision is, the more efficient
and effective the organization will be. This is in effect the
same as the quantitative methods discussed under
management science of modern management theory.
5. The mathematical approach does not differ much from the
decision-theory school and it is part of or even same as
the management science school.
6. The social systems school is sociologically oriented and
emphasizes group and individual behaviour in terms of
cultural relationships and then looks at the ways in which
these behavioural patterns interlock in a miniature social
system. These aspects are covered under the behavioural
schools of neoclassical theory.
7. The school of formalism is the same as the bureaucratic
management of classical theory. It believes that the
bureaucracy with clearly defined jobs and highly
formalized structure of organization maintains the system
and provides the services.
8. The school of spontaneity, which draws heavily from social
psychology, group dynamics and psychological disciplines,
opposes the bureaucracy and emphasizes the creative
ability of individuals. This is a part of the behavioural
school of neoclassical theory.
9. The participative school is also a part of the behavioural
school and emphasizes the need for opportunity to
participate in the decision making process.
10. The school of challenge-response is yet another extension of
behavioural school which takes the participative approach
further to allow freedom to individuals to face challenges
and come out with responses. Consequently, this approach
provides enormous opportunity for individuals to grow.
11. The directive school is an extension of scientific
management of classical theory. It believes that people need
to be told what to do. Hence it is opposite of the challenge-
response school.
12. The school of checks and balances takes the administrative
management school of classical theory one step further by
prescribing that there must be adequate checks and
balances in the system so that no individual or segment of
the organization is able to become dominant enough to take
over control.
Management Perspectives Over Time
Exhibit 2.1, p.44

The Technology-Driven Workplace
1990 2010
The Learning Organization
1980 2010
Total Quality Management
Contingency Views
Systems Theory
1940 2000
Management Science Perspective
Humanistic Perspective
1890 1990
1940 2010
End of Lecture - 8

Lecture - 9

Review of Management
Case Study
End of Lecture - 9