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AMF101 ORGANIZATION THEORY AND MANAGEMENT
Master of Finance & Control Copyright © Amity university – India Page 1
PREFACE
With the rapidly changing socio-economic and political environment and
trend towards globalization of economies, management of human resourcesin modern organisations has become a very challenging job. The people in
organisations differ in terms of their attitudes, beliefs, values, background,
knowledge etc and a thorough understanding of these concepts and
processes can be of great value to the modern managers. The present study
material synthesizes the study of the individual, the group and the
organisation system and elaborates the applied behavioral science concepts,
principles and techniques. It also provides an integrated view of modern
organisations, their environment and organizational designs for healthyorganisation and environment interface.
The subject matter has been presented in a simple and lucid manner, keeping
the unique requirements of students in mind. A critical and balanced
coverage is given to all the important topics in ORGANISATION AND
MANAGEMENT. At the end of each chapter, multiple choice questions are
given to enable the students to have self-appraisal of their understanding of
the concepts in the chapter.
I am grateful to all those who have directly or indirectly helped me in
preparing this course material. I sincerely believe that there is always scope
for improvement. Therefore; I invite suggestions for further enriching the
study material.
GEETA MISHRA
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INDEX
Chapter
No.
Topic Page No.
1 Overview of Management 4
2 Management in the Era of Change 46
3 Interpreting the Organizational Reality 68
4 The Organization 83
5 Human resource Management 123
6 Bibliography 166
7 Key to End Chapter Quizzes 167
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CHAPTER I
OVERVIEW OF MANAGEMENT
CONTENTS
1.1 Classical approach1.2
Neo Classical Approach 1.3 Systems Approach to Management 1.4
Contingency Approach 1.5 Management and Managerial Roles 1.6
Practice and Study of Management
1.7
Challenges of Management in the 21
st
century
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SCHOOLS OF MANAGEMENT
Management has been practiced in some form or the other since the dawn of
civilization. Ever since human beings started living and working together ingroups, techniques of organisation and management were evolved. The
Pyramids of Egypt, the Chinese Wall, the Roman Catholic Church and other
such wonders could not be possible without the application of management
principles and techniques.
Despite ancient origins, very little conceptual and organized body of
knowledge could be developed until the end of 19th century. A scientific and
systematic study and application of management began mainly after the
Industrial Revolution. Since then the development of management thought
has been quite rapid.
The main stages in this development can be classified as follows:
1. Classical approach2. Neo-classical approach3. System’s approach 4.
Contingency approach
1.1 CLASSICAL APPROACH
The classical approach to management is also known as Functional
Approach, Empirical Approach or Management Process Approach. Its
salient features are as follows:
1. Management is viewed as a systematic network (process) of
interrelated functions. The nature and content of these functions, themechanics by which each function is performed and the
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interrelationship between these functions is the core of the classicalapproach.
2. On the basis of experiences of experiences of practicing managers,
principles are developed. These principles are used as guidelines forthe practicing executive and basis of management training.
3. Functions, principles and skills of management are considered
universal. They can be applied in different situations.4.
Formal training and education is emphasized for developingmanagerial skills in would be managers. Case study method is oftenused for this purpose.
5. Emphasis is placed on economic efficiency and the formalorganisation structure.
6. People are motivated by economic gains. Therefore, organisationscontrol economic incentives.
Uses and Limitations
The classical approach offers a convenient framework for the education and
training of managers. First, the observational method of case study is helpful
in drawing common principles out of past experiences with some relevance
for future application.
The second merit of this approach is that it focuses attention on what
managers actually do. Thirdly, this approach highlights the universal nature
of management. Fourthly it provides a scientific basis for management
practice. It also provides a starting point for researchers to verify the validity
and to improve the applicability of management knowledge. Such
knowledge about management is effectively presented. Classical approach
provides a foundation on which the science of management can be built.
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The classical approach however suffers from several
shortcomings also which are as follows:
First, it offers a mechanistic framework that undermines the role of human
factor. Secondly, the environmental dynamics and their effect on
management have been discounted. Thirdly, there is a positive danger in
relying too much on past experiences because a principle or technique found
effective in the past may not fit a situation in the future. Fourthly the totality
of the real situation can seldom be incorporated in a case study. Lastly, the
classical approach is based on over-simplified assumptions. Its principles are
ambiguous and contradictory.
Classical approach is based on three main pillars-bureaucracy, scientific
management and administrative theory which are discussed below:
SCIENTIFIC MANAGEMENT (1856-1915)
Scientific management grew out of the need to increase productivity. At the
beginning of the 20th century skilled labour in the United States was in short
supply and it was necessary to improve the efficiency of workers. FrederickWinslow Taylor (1856-1915) is regarded as the father of scientific
management .He was a brilliant engineer and management scientist in USA.
He was convinced that there was a science of doing things in physical work
at shop door level. In order to develop and scientific and systematic ways of
doing things and to optimize efficiency, Taylor conducted a series of
experiments. His objective was to provide a scientific basis for designing
and performing jobs. He advocated a detailed scientific study of each job to
determine the best way of doing it. He believed that management is a
science resting on well recognized and clearly defined principles. He
exhorted managers to adopt scientific and systematic approach to managerial
problems in place of rule of thumb or trial and error methods.
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Principles of Scientific Management
The basic principles of scientific management are as follows:
1. Develo p a true science for each element of a worker’s job to replacerule of thumb method : Each element of a job and the motionsrequired to perform it should be scientifically analyzed to determineand use the most efficient ways of doing it. Intuition, experience andhit or miss methods are replaced by scientific methods.
2. Job speciali zation or division of labour shoul d be part of each job .Every worker should concentrate on the function so that he can
become a specialist in it. Taylor suggested an almost equal division ofthe work and the responsibility between the management and the
workers. He asserted that management should assume exclusiveresponsibility for planning and workers should assume doing, i.e.
performing work as per instructions of management. In this wayTaylor distinguished the roles and responsibilities of managementfrom those of workers.
3. Scienti fi c Selection, training and development of workers : Properselection of employees best suited for the job would improve
productivity. Scientific training should be arranged to develop eachemployee to his greatest efficiency and prosperity. First, the
qualifications required for each job be clearly specified. These should be used as the basis for selection and training of employees. When aworker works on a job for which he is both physically and mentallyfit, he can earn higher wages and mental satisfaction.
4. Close co-operation between management and workers to ensure thatwork is being done in accordance with the principles of scientificmanagement. Harmonious relationship between management andlabour is necessary for complete harmony of interests. Tayloradvocated a complete mental revolution on the part of both managersand workers. Managers should adopt an enlightened attitude and share
the gains of productivity with workers. Workers on their part shouldwork with discipline and loyalty.
5. Maximum output in place of restri cted output . Conflict betweenmanagement and labour arises mainly on division of surplus. Taylor
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suggested that the best way to resolve the problem is to increase thesize of surplus so that each side can have a larger share.In other words, Taylor believed that management and labour have a
common interest in increasing productivity.To sum up, Taylor’s principles:
Science, not rule of thumb
Harmony, not discord
Maximum output, in place of restricted output.
Development of each man to his greatest efficiency
Maximum prosperity of employer, coupled with maximum prosperity of
each employee.
Co-operation not individualism.
According to F.W Taylor, “Scientific management is the art of knowing
exactly what you want men to do and seeing that they do it in the best and
the cheapest way”.
In order to implement the above principles, Taylor and hisassociates developed the following techniques:
1.
Time Study
a. It is a technique which enables the manager to ascertainstandard time taken for performing a specified job.
b. Every job or every part of it is studied in detail.c. This technique is based on the study of an average worker
having reasonable skill and ability.
d.
Average worker is selected and assigned the job and then withthe help of a stop watch, time is ascertained for performing that particular job.
e. Taylor maintained that Fair day’s work should be determinedthrough observations, experiment and analysis by keeping inview an average worker.
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Standard Time × Working Hours = Fair Day’s Work
2.
Motion Study
a.
In this study, movement of body and limbs required to performa job are closely observed.
b. In other words, it refers to the study of movement of anoperator on machine involved in a particular task.
c. The purpose of motion study is to eliminate useless motionsand determine the bet way of doing the job.
d. By undertaking motion study an attempt is made to knowwhether some elements of a job can be eliminated combined ortheir sequence can be changed to achieve necessary rhythm.
e. Motion study increases the efficiency and productivity ofworkers by cutting down all wasteful motions.
3. Functional Foremanship
a.
Taylor advocated functional foremanship for achieving ultimatespecification. b. This technique was developed to improve the quality of work as
single supervisor may not be an expert in all the aspects of thework.
c. Therefore workers are to be supervised by specialist foreman.
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d. The scheme of functional foremanship is an extension of principle pf specialization at the supervisory level.
e. Taylor advocated appointment of 8 foramen, 4 at the planning
level & other 4 at implementation level.f. The names & function of these specialist foremen are: -
Instruction card clerk concerned with tagging down ofinstructions according to which workers are required to
perform their job Time & cost clerk is concerned with setting a time table
for doing a job & specifying the material and labor costinvolved in it.
Route clerk determines the route through which rawmaterials has to be passed.
Shop Disciplinarians are concerned with making rulesand regulations to ensure discipline in the organization.
Gang boss makes the arrangement of workers, machines,tools, workers etc.
Speed boss concerned with maintaining the speed and toremove delays in the production process.
Repair boss concerned with maintenance of machine,tools and equipments.
Inspector is concerned with maintaining the quality of
product.
4.
Standardization
a. It implies the physical attitude of products should be such that itmeets the requirements & needs of customers.
b. Taylor advocated that tools & equipments as well as workingconditions should be standardized to achieve standard outputfrom workers.
c.
Standardization is a means of achieving economics of production.
d. It seems to ensure – The line of product is restricted to predetermined type,
form, design, size, weight, quality. Etc
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There is manufacture of identical parts and components. Quality & standards have been maintained. Standard of performance are established for workers at
all levels.5.
Differential Piece Wage Plan
a. This tech of wage payment is based on efficiency of worker. b. The efficient workers are paid more wages than inefficient one.c. On the other hand, those workers who produce less than
standard no. of pieces are paid wages at lower rate than prevailing rate i.e. worker is penalized for his inefficiency.
d. This system is a source of incentive to workers who improvingtheir efficiency in order to get more wages.
e. It also encourages inefficient workers to improve their performance and achieve their standards.
f. It leads to mass production which minimizes cost andmaximizes profits.
g. 6. Other Techniques
a. Various other techniques have been developed to create ordealrelationship between management and workers and also tocreate better understanding on part of works.
b. Those includes use of instruction cards, strict rules &
regulations, graphs, slides, charts etc, so as to increaseefficiency of workers.
Critical evaluation
Although it is accepted that the scientific management enables themanagement to put resources to its best possible use and manner, yet it hasnot been spared of severe criticisms.
Workers Viewpoint:
1. Unemployment - Workers feel that management reduces employmentopportunities from them through replacement of men by machines and
by increasing human productivity less workers are needed to do workleading to chucking out from their jobs.
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2. Exploitation - Workers feel they are exploited as they are not givendue share in increasing profits which is due to their increased
productivity. Wages do not rise in proportion as rise in production.
Wage payment creates uncertainty & insecurity (beyond a standardoutput, there is no increase in wage rate).
3. Monotony - Due to excessive specialization the workers are not ableto take initiative on their own. Their status is reduced to being merecogs in wheel. Jobs become dull. Workers loose interest in jobs andderive little pleasure from work.
4. Weakening of Trade Union - To everything is fixed & predetermined by management. So it leaves no room for trade unionsto bargain as everything is standardized, standard output, standardworking conditions, standard time etc. This further weakens tradeunions, creates a rift between efficient & in efficient workersaccording to their wages.
5. Over speeding - the scientific management lays standard output, timeso they have to rush up and finish the work in time. These haveadverse effect on health of workers. The workers speed up to thatstandard output, so scientific management drives the workers to rushtowards output and finish work in standard time.
Employer's Viewpoint:
1. Expensive - Scientific management is a costly system and a hugeinvestment is required in establishment of planning dept.,standardization, work study, training of workers. It may be beyondreach of small firms. Heavy food investment leads to increase inoverhead costs.
2. Time Consuming - Scientific management requires mental revisionand complete reorganizing of organization. A lot of time is requiredfor work, study, standardization & specialization. During thisoverhauling of organization, the work suffers.
Some experts believe that Taylor’s contribution has been somewhat over-
emphasised .The originality of his ideas has been doubted. Business
managers have opposed the idea of replacing judgment with
prefabricated techniques. The term ‘scientific management’ is not
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acceptable to many persons, because it is nothing but a ‘scientific
approach to management’.
In the final analysis, Taylor made a lasting contribution to making jobsand their management more efficient and productive. Scientific
management was developed by engineers and scientists and their concern
for efficiency led to better methods and tools. Many of the Taylor’s
contributions provide the essence of modern management practice.
According to Peter Drucker scientific management is one of the great
liberating and pioneering insights. Without it a real study of human
beings at work would be impossible. Taylor laid the foundation of
modern management as a science. He is therefore, rightly known as thefather of scientific management.
ADMINISTRATIVE THEORY (1841-1925)
One of the first and the foremost contributor’s to administrative management
theory was Henry Fayol, a French industrialist. Fayol started his career as
mining engineer and later became a chief executive. He published his
famous book Administration Industrielle et Generale in 1916.It was
published in English under the title General and Industrial Management in
1949
Fayol's legacy is his generic Principles of Management. Of Fayol's sixgeneric activities for industrial undertakings (technical, commercial,financial, security, accounting, managerial), the most important were the fivefunctions of Management that focused on the key relationships between
personnel and its management.
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The Five Functions are:
PLANNING
Planning is the most basic or primary function of management. It precedes
other functions because a manager plans before he acts. Planning involves
determining the objectives and selecting a course of action to achieve them.
It implies looking ahead and deciding in advance what is to be done, when
and where it is to be done and by whom it is to be done. Planning is a mental
process requiring the use of intellectual faculties, foresight, imagination and
sound judgment. It consists of forecasting, decision-making and problem –
solving. A plan is a predetermined future course of action. Drawing up plans
of actions that combine unity, continuity, flexibility and precision given the
organisation's resources, type and significance of work and future trends.
Creating a plan of action is the most difficult of the five tasks and requires
the active participation of the entire organisation. Planning must be
coordinated on different levels and with different time horizons;
ORGANISING
Once plans are formulated, the next step is that of organizing. Organising isthe process of establishing harmonious authority-responsibility relationships
among the members of the enterprise. It is the function of creating a
structure of duties and responsibilities. The network of authority-
responsibility relationships is known as organization structure. Such a
structure serves as the framework within which people can work together
effectively for the accomplishment of common objectives.
According to Fayol, “To organize a business is to provide it with everything
useful to its functioning-raw materials, tools, capital and personnel”. Asound organisation helps to avoid duplication of work and overlapping of
effort. Providing capital, personnel and raw materials for the day-to-day
running of the business, and building a structure to match the work.
Organisational structure depends entirely on the number of employees. An
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increase in the number of functions expands the organisation horizontally
and promotes additional layers of supervision;
COMMANDING
Optimizing return from all employees in the interest of the entire enterprise.
Successful managers have personal integrity, communicate clearly and base
their judgments on regular audits. Their thorough knowledge of personnel
creates unity, energy, initiative and loyalty and eliminates incompetence;
COORDINATING
Unifying and harmonizing activities and efforts to maintain the balance between the activities of the organisation as in sales to production and procurement to production. Fayol recommended weekly conferences fordepartment heads to solve problems of common interest;
CONTROLLING
Identifying weaknesses and errors by controlling feedback, and conformingactivities with plans, policies and instructions. Fayol's management processwent further than Taylor's basic hierarchical model by allowing command
functions to operate efficiently and effectively through co-ordination andcontrol methods. For Fayol, the managing director overlooked a livingorganism that requires liaison officers and joint committees.
Fayol gave the following general principles of management:
1. Division of Work . Specialization allows the individual to build
up experience, and to continuously improve his skills. Thereby he can
be more productive.
2.
Authority. The right to issue commands, along with which
must go the balanced responsibility for its function.
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3. Discipline. Employees must obey, but this is two-sided:
employees will only obey orders if management play their part by
providing good leadership.
4. Unity of Command. Each worker should have only one boss
with no other conflicting lines of command.
5. Unity of Direction. People engaged in the same kind of
activities must have the same objectives in a single plan. This is
essential to ensure unity and coordination in the enterprise. Unity of
command does not exist without unity of direction but does not
necessarily flows from it.
6.
Subordination of individual interest (to the general interest).Management must see that the goals of the firms are always
paramount.
7. Remuneration. Payment is an important motivator although by
analyzing a number of possibilities, Fayol points out that there is no
such thing as a perfect system.
8. Centralization (or Decentralization). This is a matter of degree
depending on the condition of the business and the quality of its
personnel.
9. Scalar chain (Line of Authority). A hierarchy is necessary for
unity of direction. But lateral communication is also fundamental, as
long as superiors know that such communication is taking place.
Scalar chain refers to the number of levels in the hierarchy from the
ultimate authority to the lowest level in the organization. It should not
be over-stretched and consist of too-many levels.
10.
Order. Both material order and social order are necessary. Theformer minimizes lost time and useless handling of materials. The
latter is achieved through organization and selection.
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11. Equity. In running a business a ‘combination of kindliness and
justice’ is needed. Treating employees well is important to achieve
equity.
12. Stability of Tenure of Personnel. Employees work better if
job security and career progress are assured to them. An insecure
tenure and a high rate of employee turnover will affect the
organization adversely.
13. Initiative. Allowing all personnel to show their initiative in
some way is a source of strength for the organization. Even though it
may well involve a sacrifice of ‘personal vanity’ on the part of many
managers.14. Esprit de Corps. Management must foster the morale of its
employees. He further suggests that: “real talent is needed to
coordinate effort, encourage keenness, use each person’s abilities,
and reward each one’s merit without arousing possible jealousies and
disturbing harmonious relations.
BUREAUCRACY (1864-1920)
Max Weber, a German social scientist, analyzed the formation and
administration of public bureaucracies, which happen to be the oldest form
of organisation. Weber evolved an ideal type of bureaucracy’s a conceptual
model for analytical purposes. His model is characterized by the following
features:
1. Division of work . There is a high degree of specialization or division of
labor in a bureaucratic organisation. A task is divided into very specialized jobs and each member performs his specialized function in a predictable
manner.
2. Rul es and Regulations. Detailed and rigorous rules and regulations are
laid down to specify and govern the work behavior, rights and duties of job
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holders. There is rigid adherence to prescribed rules designed to ensure
consistency and predictability in work performance. Behavior is subject to
discipline and control within the framework of rules. In addition, procedures
are laid down for orderly performance of tasks.
3. Hierarchy of Authority. A clearly-defined hierarchy is created by
downward delegation of authority. There is distribution of formal position
authority to give commands needed for discharging duties at various levels.
Each position in the hierarchy covers an area over which it has complete
jurisdiction in terms of competence and authority.
4. Techni cal competence. Selection and promotion of job-holders are based
on their on their technical competence. Qualifications are prescribed for each
job/ position. Special training is given to provide knowledge of rules and
administrative procedures.
5. Record Keeping. Every decision and action is recorded in a wide array of
written documents and preserved in its original and draft form.
6. Impersonal relations. Relations among the members of a bureaucratic
organisation are impersonal and formal. Superiors adopt an impersonal
attitude in dealing with their subordinates.
Weber visualized bureaucracy as an ideal pattern of organisation because it
embodies the advantage of precision, efficiency, competence, objectivity,
unity, conformity, discipline and order. According to Weber, Bureaucracy
provides an ideal way for harnessing the human and mechanical energy.
Real life organisations, both private and public, exhibit varying degrees of
bureaucracy. Generally the degree of bureaucracy is higher in governmental
and military organisations than in private business and voluntary
organisations. Weber sought to improve the performance of socially
important organisations.His model has contributed to organizational thinking
but it has been criticized due to its inflexibility and its focus in impersonal
efficiency rather than on human values and needs.
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1.2 NEO-CLASSICAL APPROACH
Classical approach led to more efficient forms of organisation and
management. But it failed to recognize the overwhelming role of people inmanagement. Jobs became narrow and workers began to resist the formal
and impersonal treatment over-looking their social and psychological needs.
This resistance and the need to secure willing cooperation of workers led to
the development of neo-classical approach.
Neo-classical approach may be analysed in three parts namely, Hawthorne
Experiments, Human Relations Movement and Behavioral Approach.
Hawthorne Experiments
The Hawthorne Studies (also knows as the Hawthorne Experiments) were
conducted from 1927 to 1932 at the Western Electric Hawthorne Works in
Cicero, Illinois (a suburb of Chicago). This is where Professor Elton Mayo
examined the impact of work conditions in employee productivity. Elton
Mayo started these experiments by examining the physical and
environmental influences of the workplace (e.g. brightness of lights,
humidity) and later, moved into the psychological aspects (e.g. breaks, group
pressure, working hours, managerial leadership) and their impact on
employee motivation as it applies to productivity.
The Hawthorne Effect
In essence, the Hawthorne Effect, as it applies to the workplace, can besummarized as "Employees are more productive because theemployees know they are being studied." Elton Mayo's experiments showedan increase in worker productivity was produced by the psychological
stimulus of being singled out, involved, and made to feel important.Additionally, the act of measurement, itself, impacts the results of themeasurement. Just as dipping a thermometer into a vial of liquid can affectthe temperature of the liquid being measured, the act of collecting data,where none was collected before creates a situation that didn't exist before,thereby affecting the results.
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The Hawthorne Experiments and Employee Motivation
Elton Mayo's studies grew out of preliminary experiments at the Hawthorne
plant from 1924 to 1927 on the effect of light on productivity. Thoseexperiments showed no clear connection between productivity and theamount of illumination but researchers began to wonder what kind ofchanges would influence output.
Variables Affecting Productivity
Specifically, Elton Mayo wanted to find out what effect fatigue andmonotony had on job productivity and how to control them through suchvariables as rest breaks, work hours, temperature and humidity. In the
process, he stumbled upon a principle of human motivation that would helpto revolutionize the theory and practice of management.
Elton Mayo selected two women, and had those two select an additional fourfrom the assembly line, segregated them from the rest of the factory and putthem under the eye of a supervisor who was more a friendly observer thandisciplinarian. Mayo made frequent changes in their working conditions,always discussing and explaining the changes in advance.
Relay Assembly
The group was employed in assembling telephone relays - a relay being asmall but intricate mechanism composed of about forty separate parts whichhad to be assembled by the girls seated at a lone bench and dropped into achute when completed.
The relays were mechanically counted as they slipped down the chute. Theintent was to measure the basic rate of production before making anyenvironmental changes. Then, as changes were introduced, the impact to
effectiveness would be measured by increased or decreased production ofthe relays.
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Feedback mechanism
Throughout the series of experiments, an observer sat with the girls in the
workshop noting all that went on, keeping the girls informed about theexperiment, asking for advice or information, and listening to theircomplaints.
The experiment began by introducing various changes, each of which wascontinued for a test period of four to twelve weeks. The results of thesechanges are as follows:
Work Conditions and Productivity Results
Under normal conditions with a forty-eight hour week, including Saturdays,and no rest pauses. The girls produced 2,400 relays a week each.
1. They were then put on piecework for eight weeks.o Output increased
2. They were given two five-minute breaks, one in the morning, and onein the afternoon, for a period of five weeks.
o Output increased, yet again3. The breaks were each lengthened to ten minutes.
o Output rose sharply4.
Six five-minute breaks were introduced.o The girls complained that their work rhythm was broken by the
frequent pauseso Output fell only slightly
5. The original two breaks were reinstated, this time, with acomplimentary hot meal provided during the morning break.
o Output increased further still6. The workday was shortened to end at 4.30 p.m. instead of 5.00 p.m.
o Output increased
7.
The workday was shortened to end at 4.00 p.m.o Output leveled off
8. Finally, all the improvements were taken away, and the originalconditions before the experiment were reinstated. They weremonitored in this state for 12 more weeks.
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o Output was the highest ever recorded - averaging 3000 relays aweek
Elton Mayo's Conclusions on Job Performance
Elton Mayo came to the following conclusions as a result of the study:
The aptitudes of individuals are imperfect predictors of jobperformance. Although they give some indication of the physical andmental potential of the individual, the amount produced is stronglyinfluenced by social factors.
Informal organization affects productivity. The researchers
discovered a group life among the workers. The studies also
showed that the relations that supervisors develop with workers tendto influence the manner in which the workers carry out directives.
Work-group norms affect productivity. The Hawthorne researcherswere not the first to recognize that work groups tend to arrive atnorms of what is "a fair day's work." However, they provided the bestsystematic description and interpretation of this phenomenon.
The workplace is a social system. The researchers came to view theworkplace as a social system made up of interdependent parts. Theworker is a person whose attitudes and effectiveness are conditioned
by social demands from both inside and outside the work plant.Informal group within the work plant exercise strong social controlsover the work habits and attitudes of the individual worker.
The need for recognition, security and sense of belonging is moreimportant in determining workers' morale and productivity than the
physical conditions under which he works.
The major finding of the study was that almost regardless of theexperimental manipulation, worker production seemed to continuallyimprove. One reasonable conclusion is that the workers were happy to
receive attention from the researchers who expressed an interest in them.Originally, the study was expected to last one year, but since the findingswere inexplicable when the researchers tried to relate the worker's efficiencyto manipulated physical conditions, the project was incrementally extendedto five years.
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HUMAN RELATIONS MOVEMENT
Hawthorne Experiments laid the foundation for human relations movement
in management. Subsequent research contributed several concepts andtechniques of human relations. Human relations school is a socio
psychological approach to management. It suggests that a businessenterprise is asocial system in which group norms exercise significantinfluence on the behavior and performance of individuals. Workers cannot
be motivated by economic rewards alone. They require social satisfaction atthe workplace. Therefore, managers should create such a climate in theorganisation that worker can feel happy. Employee counseling, participativedecision making, cordial super vision, job enrichment and other techniqueshave been suggested for keeping workers happy and satisfied. According toKeith Davis, human relations is an area of management precise which isconcerned with the integration of people into a work situation in a way thatmotivates them to work together productively, cooperatively and withsatisfaction and achieve organizational goals.
The human relations school is based on the following ideas:
1. The Individual. According to the human relations school, each person isunique. He brings certain attitudes, beliefs, values, skills etc. to the job
situation. Therefore an individual is motivated by not only economic factors but by several social and psychological factors.
2. The Work Group. Work is a social experience and most workers findsatisfaction in social or informal groups. The norms of such groupsdetermine to a great extent the attitude and performance of workers.Therefore, managers should maintain good interpersonal and inter grouprelations to maximize productivity.
3. The leader. As the leader of a work group, a supervisor/manager should
provide a pleasant work climate wherein employees are allowed to have asay in the decision making process. He can gain respect and obedience byadjusting to various personalities and situations.
4. The work environment. A positive work environment enables employeesto satisfy their needs as well as to achieve organizational goals. Positive
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work environment consists of clearly defined goals, performance linkedrewards, feedback on performance, participative decision making,interesting and growth oriented work, open communications, etc.
BEHAVIORAL APPROACH
Human relations movement focused on interpersonal relations andoverlooked the wider subject of organizational behavior. Organisational
behavior involves the study of attitudes, behavior and performance ofindividuals and groups in organizational setting. Behavioral approachincludes the issue of organizational behavior. It is also known as humanresource approach because it stresses development of human beings for the
benefit of both the individual and the organisation.
The main propositions of behavioral science approach are as follows:
1. An organisation is a sociotechnical system
2. Individuals differ in terms of their attitudes, perceptions and valuesystems. Therefore they react differently to the same situation.
3. People working in an organisation have their needs and goals which maydiffer from the organisation’s needs and goals. Management should achievefusion between organizational goals and human needs.
4. A wide range of factors influence relations among people.
5. People’s behavior as individuals may be different from their behavior as
members of a group.
6. Person’s working together in an organisation form their own informalgroups. Such groups have their own norms, culture and communicationsystems.
7. Informal groups exercise a significant influence on the attitudes, behaviorand performance of employees.
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Thus behavioral approach is an extension and improvement of humanrelations movement. It has made significant contribution towards thedevelopment of management thought.
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1.3Systems approach to management
Just as human body is formed of different interdependent systems so is also
an organization. A change in any one of these systems may affect all orsome other systems to varying degrees. This ‘ripple effect’ influences the
effectiveness of the organization. To understand the interactions and theconsequences between the various systems of the organization the managersshould posses the ability to get a perspective view. Treating an organizationas formed of different systems is known as systems approach.Systems theory was first applied in the fields of science and engineering. It
also has found wide acceptance in the practice of management. A system can
be defined as essentially a set or assemblage of things interconnected or
interdependent, so as to form a complex unity. Cars, computers, televisionand radio sets are some examples of systems.
There are two major types of systems: closed and open. A closed system has
definite boundaries; it operates relatively independently and is not affected
by the environment outside the system. Stand by generator is an example of
a closed system. With its different systems working together in perfect
harmony the generator continues to supply power as long as it has sufficient
fuel supply without much regard to the external environment.
An open system as the name implies, is characterised by its interaction with
the external environment. Clearly, any business or other organization must
be described by an open-system model that includes interactions between the
enterprise and its external environment.
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Fig: Organization on an open system model
The above shown figure is self explanatory. One important mechanismwhich makes the system to adapt and adjust to the changing conditions of itsenvironment and to exercise control over its operations is ‘feedback’. As
explained thus far, systems approach of management provides an integralapproach to management. It views management in its totality. It helps inseeing the problems of the organization in wider perspective. This approachis more useful in managerial decision-making.Based on the systems approach, Talcot Parsons has suggested threemeaningful levels in the hierarchy of complex organisations: Technical,Organisational and Institutional.
The Technical Level is concerned with the actual production and distributionof products and services. It also includes activities like research anddevelopment, operation research and accounting.The Organisational Level coordinates and integrates work performance atthe technical level. It is concerned with obtaining the continued flow ofinputs into the system and maintaining the markets for the outputs from thesystem.
The Institutional Level is concerned with relating activities of theorganization to environmental system. It involves relating the organizationto the needs of the environment.
Feedback
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1.4 CONTINGENCY APPROACH
The contingency approach to management is based on the idea that there is
no one best way to manage and that to be effective, planning, organizing,leading, and controlling must be tailored to the particular circumstancesfaced by an organization. Managers have always asked questions such as"What is the right thing to do? Should we have a mechanistic or an organicstructure? A functional or divisional structure? Wide or narrow spans ofmanagement? Tall or flat organizational structures? Simple or complexcontrol and coordination mechanisms? Should we be centralized ordecentralized? Should we use task or people oriented leadership styles?What motivational approaches and incentive programs should we use?" Thecontingency approach to management (also called the situational approach)assumes that there is no universal answer to such questions becauseorganizations, people, and situations vary and change over time. Thus, theright thing to do depends on a complex variety of critical environmental andinternal contingencies.
Classical management theorists such as Henri Fayol and Frederick Tayloridentified and emphasized management principles that they believed wouldmake companies more successful. However, the classicists came under firein the 1950s and 1960s from management thinkers who believed that their
approach was inflexible and did not consider environmental contingencies.Although the criticisms were largely invalid (both Fayol and Taylor, forexample, recognized that situational factors were relevant), they spawnedwhat has come to be called the contingency school of management.Research conducted in the 1960s and 1970s focused on situational factorsthat affected the appropriate structure of organizations and the appropriateleadership styles for different situations. Although the contingency
perspective purports to apply to all aspects of management, and not justorganizing and leading, there has been little development of contingencyapproaches outside organization theory and leadership theory. The followingsections provide brief overviews of the contingency perspective as relevantto organization theory and leadership.
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CONTINGENCY PERSPECTIVE AND ORGANIZATION
THEORY
Environmental change and uncertainty, work technology, and the size of acompany are all identified as environmental factors impacting theeffectiveness of different organizational forms. According to thecontingency perspective, stable environments suggest mechanistic structuresthat emphasize centralization, formalization, standardization, andspecialization to achieve efficiency and consistency. Certainty and
predictability permit the use of policies, rules, and procedures to guidedecision making for routine tasks and problems. Unstable environmentssuggest organic structures which emphasize decentralization to achieve
flexibility and adaptability. Uncertainty and unpredictability require general problem solving methods for no routine tasks and problems. Paul Lawrenceand Jay Lorsch suggest that organizational units operating in differingenvironments develop different internal unit characteristics, and that thegreater the internal differences, the greater the need for coordination
between units.
Joan Woodward found that financially successful manufacturingorganizations with different types of work technologies (such as unit orsmall batch; large-batch or mass-production; or continuous-process) differed
in the number of management levels, span of management, and the degree ofworker specialization. She linked differences in organization to firm
performance and suggested that certain organizational forms wereappropriate for certain types of work technologies.
Organizational size is another contingency variable thought to impact theeffectiveness of different organizational forms. Small organizations can
behave informally while larger organizations tend to become moreformalized. The owner of a small organization may directly control mostthings, but large organizations require more complex and indirect controlmechanisms. Large organizations can have more specialized staff, units, and
jobs. Hence, a divisional structure is not appropriate for a small organization but may be for a large organization.
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In addition to the contingencies identified above, customer diversity and theglobalization of business may require product or service diversity, employeediversity, and even the creation of special units or divisions. Organizations
operating within the United States may have to adapt to variations in local,state, and federal laws and regulations. Organizations operatinginternationally may have to adapt their organizational structures, managerial
practices, and products or services to differing cultural values, expectations,and preferences. The availability of support institutions and the availabilityand cost of financial resources may influence an organization's decision to
produce or purchase new products. Economic conditions can affect anorganization's hiring and layoff practices as well as wage, salary, andincentive structures. Technological change can significantly affect anorganization. The use of robotics affects the level and types of skills neededin employees. Modern information technology both permits and requireschanges in communication and interaction patterns within and betweenorganizations.
1.5 MANAGEMENT AND MANAGERIAL ROLES
DEFINITIONS OF MANAGEMENT
Production or Efficiency-oriented Definitions:
Those who have put forward the concept of management as a source of
efficiency in organization have viewed that management is concerned with
generating efficiency in organizational settings.
Taylor has defined management as follows:
“Management is the art of knowing what you want to do and then
seeing that it is done in the best and cheapest way”
In a similar way, John Mee has defined management in terms of securingmaximum results when he views that:
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“ Management is the art of securing maximum results with minimum
effort so as to secure maximum prosperity and happiness for both
employer and employee and give the public the best possible service”.
Decision – oriented Definitions:
Decision-oriented definitions of management have been provided by
decision theorists who have seen management process in terms of decision
making. A decision – oriented definition of management has been provided
by Stanley Vance as follows:
“Management is simply the process of decision making and control
over the action of human beings for the expressed purpose ofattaining pre-determined goals”
The decision-oriented definition of management indicates that the basic
activity of a manager is to make decisions and enforce these decisions.
People-oriented Definitions:
Lawrence Appley has called management as personnel management and has
defined it as follows:
“ Management is the accomplishment of results through the efforts of
other people”.
Koontz has defined management in similar way when he says that:
“ Management is the art of getting things done through and with people in
formally organized groups”
Function-oriented Definitions:
These definitions put emphasis on the various functions performed by
managers in organizations. McFarland states that
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“ Management is defined for conceptual, theoretical, and analytical
purposes as that process by which managers create, direct, maintain and
operate purposive organizations through systematic, coordinated,
cooperative human efforts”.
Henry Fayol, an early management thinker, has elaborated these functions
more precisely when he defined management as follows:
“To manage is to forecast and to plan, to organize, to coordinate and to
control.”
MANAGERIAL ROLES
Henry Mintzberg has studied the work roles of the chief executive and has
categorized these roles into three areas. These areas are interpersonal
relationships, information processing and disseminating and decision
making. Each of these areas are further sub divided into various roles. These
roles are:
(A) Interpersonal Relationships
1. Manager’s role as a figurehead:
Manager’s act as symbolic figurehead performing social or legal obligations.
These duties include greeting visitors, signing legal documents, taking
important customer’s to lunch etc.
2. Manager’s leadership role:
Since a manager is responsible for the activities of his subordinates he must
motivate them to perform better. He must be an exemplary leader so that his
subordinates follow his directions and guidelines with respect anddedication.
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3. Manager’s role as a liaison officer :
In addition to their constant contact with their own subordinates and peers
,the manager’s must maintain a network of outside contacts in order toassess the external environment of competition, social changes or changes in
government rules and regulations.. An auto assembly plant supervisor may
telephone a tire supplier to determine the amount of inventory available for
next week; a prosecuting attorney may meet with the presiding judge and
defense attorney to discuss the use of motions and evidence in a libel trial; or
a college professor may meet with professors in a separate department on
campus to obtain information on a prospective doctoral student. Ultimately,
the liaison role enables a manager to develop a network for obtainingexternal information which can be useful for completing current and future
work activities
(B)
Information Processing
1. Manager’s role as a monitor :
A manager assumes the monitor role by continually scanning the
environment for information or activities and events that may identify
opportunities or threats to the functioning of the work unit. Much of the
manager's gathering of information is achieved through the network of
contacts that has been established through the interpersonal roles. Hearing
small talk at a banquet about a competitor's planned marketing program,
learning through casual conversation at a ball game about the negative
medical evaluation of an unsigned ball player, or daily reading of a business
periodical are all examples of the kinds of information gathering involved in
the monitor role.
2. Manager’s role as a disseminator of information:
The information a manager gathers as a monitor must be evaluated and
transmitted as appropriate to members of the organization. The transmittal of
information by a manager activates the disseminator role. Privileged
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information may be disseminated to subordinates, peers, or superiors in the
organization. The manager may inform the marketing vice-president about
the specific marketing strategy a competitor is planning to implement. A
baseball manager may inform the team owner that an impending trade
should be cancelled because of the unfavorable medical report on one of the
players. Or reading The Wall Street Journal may inform the manager that a
shipping strike is looming and thus enable her to inform subordinates that
temporary layoffs may occur next month.
3. Manager’s role as a spokesman:
Occasionally, a manager assumes the role of a spokesperson by speaking on
behalf of the work unit to people inside or outside the organization. This
might involve lobbying for critical resources or appealing to individuals who
have influence on activities that affect the work unit. A top manager asking
the board of directors to keep the work unit together during a reorganization
period or a corporate president speaking to a college audience on the role the
company plays in education would both constitute engaging in the
spokesperson role.
(C)
Decision Making
1. Manager’s role as an entrepreneur:
The entrepreneur role comes into action when the manager seeks to improve
the work unit. This can be accomplished by adapting new techniques to fit a
particular situation or modifying old techniques to improve individual or
group activity. Managers usually learn of new or innovative methods
through information gathered in the monitor role. As a result, a supervisor
purchases a new kiln which will shorten the drying process for ceramic tiles;
a director of a youth club trains staff in the use of personal computers to
increase file access; or a president establishes a new pension plan to improve
employee morale.
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2. Manager’s role as a conflict handler :
Whereas the entrepreneur role establishes the manager as the initiator of
change, the disturbance handler role establishes the manager as a responderto change. Organizations, unfortunately, do not run so smoothly that
managers are never called upon to respond to unwelcome pressures. In these
cases, the manager is required to act quickly to bring stability back to the
organization. A law partner must settle a disagreement among associates in
the firm on who will present a case before a judge; a personnel director must
negotiate with striking employees dissatisfied with the procedures for laying
off employees; or a cannery first-line manager must respond to a sudden
shortage of cans used to package perishable fruit because the supplier hasreneged on a contract.
3 . Manager’s role as resource all ocator :
When a manager is placed in the position of having to decide to whom and
in what quantity resources will be dispensed, the resource allocator role is
assumed. Resources may include money, time, power, equipment, or people.
During periods of resource abundance, this role can be easily performed by a
manager. In most cases, however, organizations operate under conditions of
resource scarcity; thus, decisions on the allocation of resources can be
critical for the success of the work unit, division, or organization. As a
decision maker, the manager must strive not only to appropriately match
resources with subordinates but also to ensure that the distribution of
resources is coordinated to effectively complete the task to be performed. An
office manager must provide secretaries with appropriate equipment to
generate and duplicate documents. A manager of a fast-food restaurant must
coordinate work shifts to have the maximum number of employees working
during the lunch hour. Corporate presidents may provide their administrative
assistants with decision-making responsibility for day-to-day matters.
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4. Manager’s role as negotiator:
In addition to decisions concerning organizational changes, disturbances,
and resources, the manager also enacts as a negotiator .The process ofnegotiation is possible only when an individual has the authority to commit
organizational resources. Hence, as managers move up the managerial
hierarchy and obtain control over more resources, they become more
involved in the negotiator role. For example, the president of a record
company may be called in to discuss terms of a possible contract with a
major rock group; a production manager must negotiate with the personnel
department to obtain employees with specialized skills; or a college dean
must negotiate with department heads over course offerings and the numberof faculty to be hired.
The relative emphasis a manager places on these ten roles is highly
dependent on the manager's authority and status in the organization. Length
of time on the job, position in the management hierarchy, goals of the
subunit to be achieved, and skills the manager possesses all play a part in
determining which roles are more prominent than others at any given time.
For instance, a marketing manager is more likely to emphasize the
interpersonal roles because of the importance of personal contact in themarketing process. A financial manager, charged with responsibility for the
economic efficiency of the organization, will probably focus on the
decisional roles. A staff manager, or a manager who performs in an advisory
capacity, is likely to be more heavily involved in the informational roles.
Regardless of the differences that may occur, however, all managers enact
interpersonal, informational, and decisional roles while performing their
tasks. Effectively managing an organization is a demanding task. Managers
not only must develop skills related to the functional areas of management but also must learn how to integrate these activities.
What makes this process demanding is that events and activities external and
internal to an organization can radically change the techniques and methods
managers must use in order to arrive at successful outcomes.
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Managers cannot afford to be limited in their view of management, nor can
they simply rely on how things were done in the past. Even the most
seasoned and successful managers are prone to mistakes. However, a more
complete knowledge of the managerial process can reduce the chances of
mistakes that will have dire consequences for an organization. Such
knowledge may help managers to better plan, organize and staff, direct, and
control organization activities within the context of their organization.
1.6 PRACTICE AND STUDY OF MANAGEMENT
Management is needed in all types and sizes of organisations, at all
organizational levels and in all organizational work areas, and in all
organizations, no matter what country they are located in. This is known as
the universality of management. Managers in all these settings will plan,
organize, lead and control. However, this is not to say that management is
done the same way. The differences in what a supervisor in a software
applications testing facility at Microsoft does versus what the CEO of
Microsoft does are a matter of degree and emphasis, not of function.
Because both are managers, both will plan, organize, lead and control but
how they do so will differ.
Since management is universally needed in all organisations, we have a
vested interest in improving the way organisations are managed. We interact
with organisations every single day of our lives.
Organizations that are well managed develop a loyal customer base, grow
and prosper. Those that are poorly managed find themselves with a declining
customer base and reduced revenues. By studying management one will be
able to recognize poor management and work to get it corrected. In additionone will be able to recognize good management and encourage it, whether
it’s in an organisation with which one is simply interacting or whether it’s in
an organisation in which one is employed.
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The Reality of Work:
Another reason for studying management is the reality that for most of us,
once we graduate from college and begin our career, we will either manageor be managed. For those who plan on management careers, an
understanding of the management process forms the foundation upon which
to build our management skills. For those of us who don’t see ourselves in a
management position, we are still likely to have to work with managers.
Also, assuming that we will have to work for a living and recognizing that
we are likely to work in an organisation, we’ll probably have some
managerial responsibilities even if one is not a manager. Our experience tells
us that one can gain a great deal of insight into the way one boss behavesand the internal workings of organisations by studying management. Our
point is that we don’t have to aspire to be a manager to gain something
valuable from a course in management.
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Rewards and Challenges of Being a Manager
The rewards and challenges of being a manager are as follows:
Rewards Challenges
Create a work environment inwhich organizationalmembers can work to the bestof their ability
Have opportunities to thinkcreatively and useimagination.
Have opportunities to thinkcreatively and useimagination.
Help others find meaning andfulfillmentIn work.
Support, coach, and nurtureothers.
Work with a variety of people.
Receive recognition and statusin organisation andcommunity.
Play a role in influencingorganizational outcomes
Receive appropriatecompensation in form of salaries,
bonuses and stock options.
Good managers are needed byorganisations.
Do hard work
Have to deal with a variety of personalities.
Often have to make do withlimited resources.
Motivate workers in chaoticand uncertain situations.
Successfully blend knowledge,skills, ambitions andexperiences of a diverse workgroup.
Success depends on other’s
work performance.
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Being a manager in today’s dynamic workplace provides many challenges. It
can be a tough and often thankless job. One may have to deal with a variety
of personalities and many times have to make do with limited resources. It
can be a challenge to motivate workers in the face of uncertainty and chaos.
And managers may find it difficult to effectively blend the
knowledge, skills, ambitions and experiences of a diverse group of
employees. Finally, as a manager, your success typically is dependent
upon other’s work performance.
Despite these challenges, being a manager can be very rewarding. One
is responsible for creating a work environment in which
organizational members can do their work to the best of their ability
and help the organisation achieve its goals. In addition as a manager
one often have the opportunity to think creatively and use one’s
imagination. A manager helps others find meaning and fulfillment in
their work. As a manager one gets to support, coach and nurture
others and help them make good decisions. One gets to meet and work
with a variety of people-both inside and outside the organisation.
Other rewards of being a manger may include receiving recognition
and status in the organisation and community, playing a role in
influencing organizational outcomes, and receiving attractive
compensation in the form of salaries, bonuses, and stock options.
Finally, organisations need good managers. Nothing great ever
happens by itself. It’s through the combined efforts of motivated and
passionate people that organisations accomplish their goals. As a
manager, one can get satisfaction from knowing that one’s efforts,
skills and abilities are needed.
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1.7Challenges of Management in the 21st century
Management has been around since the dawn of civilization. In primitive
societies almost everyone had to do physical labor. To escape this burden,about the only choices were going into politics (kings) or religion (priests).
Civilized urban societies led to more specialization, created new vocational
alternatives to manual labor, and saw a tendency of those who did not work
with their hands to look down on those who did. This particular attitude was
fostered by scribes, who used their knowledge of writing to produce
literature that mocked the illiterate laboring classes.
When we read that the Pharaoh build the PYRAMIDS, we know that in fact
that actual work was done by other people. As these laborers cut, moved,
and placed the stones, the first managers were there to tell them what to do,
to see that they did it, and to chastise those whose performance was
unsatisfactory.
Basically, these were the functions of managers until the twentieth century.
The apogee of this form of management was perhaps reached in late
nineteenth in the factory system. One can still visit the Boott Cotton MillsMuseum of in Lowell, Massachusetts to see how work and management
were organized then.
The Lowell mills were famous because instead of relying on immigrants,
they also recruited, hired, and provided dormitories for middle class young
women, selling the idea that employment and the money it brought were
socially acceptable and increased their marital prospects. Today one can
still read the work rules that these women had to follow. One stated that only
short sleeve dresses were permitted. This was because when the mill
managers saw employees talking instead of working, they would strike them
in the arm with a rattan. Long-sleeved dresses impeded the effectiveness of
this form of disciplinary action.
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The "hit them with a whip" school of management suffered a decline and fall
in the 20th century, though remnants still exist in various places in the world
and the wish for such methods still is expressed now and then even by
contemporary managers. Other methods of managing workers received
classical expression in Frederick Taylor’s Scientific Management in 1911.
Taylorism led to new management tools involving such techniques as
measurement and statistics.
What might be called the "efficiency expert" school of management was for
the most part supplanted around the 1960s by a more "humanistic" approach,
whose classical exponent was the psychologist Abraham Maslow. The
changes in management thinking in this decade reflected the more educatedworkforce and greater respect for democracy that grew out of World War II.
In the 1970s Robert Greenleaf invented Servant Leadership, and in the
1990s Peter Block carried this concept forward to Stewardship. These ideas
revolutionized the mental model for managers by suggesting that they
replace thinking about how to get people to do things with thinking about to
help people do things.
Best practice management concepts in the late 20th century also includedexcellence and total quality management, reengineering, systems thinking,
cross functional teams, empowerment and flat organization charts, learning
organization, dialogue, reinventing work, and diversity. As knowledge in
general increased with "Internet speed," management thought, already
heavily influenced by psychological sciences, and received infusions from
numerous disciplines. Moreover, cross-fertilization between academia and
the business community created a vast increase in management related
research activity.
Some of these trends – such as TQM and reengineering - seemed by 2000 to
have run their course. The permanent value of the new thinking underlying
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them, however, should not be denied; and 21st century versions of these
movements should actually be welcomed.
Others trends – such as learning and diversity – progressed to the pointwhere "second generation" (learning organization) or "new" (diversity)
versions appeared. In the early 21st century, it was even easy to see the
development of a "third wave" in these well-established concepts.
Just as the 21st century has seen new types of organizations and new ways
of doing business arise, so, too, will there be new management trends, ideas,
and techniques. While running after every trendy idea is hardly a
recommendable strategy, the wise manager will learn, study, and apply the best current thinking.
At the start of the 21st century, the following rate to be the most important
ideas regarding management:
Management is for everyone. As educational levels rise and information
technology accelerates, the distinction between "managers" and "workers"
will fade away and management knowledge will be everyone's
responsibility.
Management is for learners. As information becomes the chief product of
every business and as knowledge continues to explode, everyone will be a
learner and the manager's foremost task will to promote learning.
Management is based on communicating. As techniques for planning,
strategizing, decision-making, and problem solving become the common
province of everyone in the organization, the need for improving
communication will be paramount and managers will be increasingly usingdialogue and other communication tools.
Management is about change. As technology and information reshape all
our lives, change management will be "business as usual" and managers will
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be change agents who guide everyone to find and embrace the best new
practices.
Management is broad based. As boundaries disappear withinorganizations and in the world at large, the scope of management will grow
and managers will be organizational development experts, diversity experts,
facilitation experts, consultation experts – and much else.
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END CHAPTER QUIZZES
CHAPTER I QUIZZES
Q1.Which one of the following theories ignored the concept of leadership,
motivation, power and informal relations?
(a) Classical
(b) Behavioral
(c) Modern
Q2.Which theory states that there is no best way to manage all situations?
(a)System’s Theory
(b)Contingency theory
(c)Administrative Theory
Q3. The general conclusion of the Relay Assembly Test Room Experiments
was that employees would work better if the management was concerned
about their welfare and superiors paid special attention to them. This
phenomenon was subsequently labeled as the………..
(a)Relay effect
(b)Hawthorne effect
(c)Human effect
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Q4. Unlike Classical theorists who viewed organizations from a production
point of view, behavior theorists viewed it from the ………point of view.
(a)Human (b)Technical (c)Administrative
Q5. Weber coined the term …….to identify large organisations that operated
on a rational basis.
(a)Autocracy
(b)Diplomacy
(c)Bureaucracy
Q6. Management is:
(a) An Art(b) A Science(c) Both
Q7.Which of the following Fayol’s princi ples of management aims at
avoiding the possibility of conflicting orders?
(a)Well-defined hierarchy of authority
(b)Unity of Command
(c)Unity of Direction
Q8. Espirit de corps means
(a) Unity is strength(b) Buyer Beware
(c)
Service is our motto
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Q9. Time Study is a technique which enables the manager to ascertain
standard……
taken for performing a specified job.
(a)Time
(b)Units (c)Quantity
Q10.Who identified the three types of managerial roles, namely
interpersonal, informational and decision roles?
(a)Peter Drucker
(b)Henry Mintzberg
(c)Max Weber
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CHAPTER II
MANAGEMENT IN THE ERA OF CHANGE
CONTENTS
2.1 Multiple stakeholder Relationship
2.2 Ethics
2.3 Social Responsibility: - The modern challenges
2.4 Values
2.5 Values & Corporate Culture
2.1 Multiple Stakeholder Relationship
Organisation exist because of their ability to create value and acceptable
outcome for various groups of stakeholders, people who have an interest,claim, or stake in organisation, in what is does, and in how well performs. In
general, stakeholders are motivated to participate in an organisation if they
receive inducements exceed the value of the contributions they are required
to make. Inducements rewards such as money, power, and organisational
status. Contributions are the knowledge, and expertise that organisations
require of their members during the performance.
There are two main groups of organisational stakeholders: inside
stakeholders and outside stakeholders. The inducements and contributions ofeach group are summarized in table given below.
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Inside Stakeholders
Inside stakeholders are people who are closest to an organisation and have
the strongest or most direct claim on organisational resources: shareholders,managers, and the work force.
SHAREHOLDERS. Shareholders are the owners of the organisation, and,
as such, their claim on organisational resources is often considered superior
to the claims of other inside stakeholders. The shareholders’ contribution to
the organisation is to invest money in it by buying the organisation’s stock.
The shareholders’ inducement to invest is the prospective money they can
earn on their investment in the form of dividends and increase the price of
stock. Investments in stock are risky, however, because there is no guarantee
of a return. Shareholders who do not believe that the inducement (the
possible return on their investment) is enough to warrant their contribution
(the money they have invested) sell their shares and withdraw support from
the organisation.
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TABLE
INDUCEMENTS AND CONTRIBUTIONS OF ORGANISATIONAL
STALEHOLDERS
Stakeholder Contribution to the
Organisation
Inducement to
Contribute
INSIDE
Shareholders Money and capital Dividends and
appreciation
Managers Skills and expertise Salaries, bonuses, statusand power
Workforce Skills and expertise Wages, bonuses, stable
employment, and
promotion
OUTSIDE
Customers Revenue from purchase
of goods and services
Quality and price of
goods and services
Suppliers High- quality inputs Revenue from purchaseof inputs
Government Rules governing good
business practice
Fair and free
competition
Unions Free and fair collective
bargaining
Equitable share of
inducements
Community Social and economic
infrastructure
Revenue, taxes, and
employment
General public Customer loyalty andreputation
National pride
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MANAGERS. Managers are the employees who are responsible f