THEORIES AND PRACTICE OF MANAGEMENT

     THE CONCEPT OF MANAGEMEENT                                          

A precise definition of management is not simple because the term management is used in a variety of ways. Being new disciplines, it has drawn concepts and principles from a number of disciplines such as economics, sociology, anthropology, and statics and so on.

The result s that each group of contributors has treated management differently, e.g. economists have treated management as a factor of production, sociologists have treated it as a class or group of persons, practitioners have treated it has a process comprising different activities. Naturally all those divergent groups view the nature and scope of management from their own point of view.

Thus taking, all these points of view together, it becomes difficult to define management in comprehensive way.

In the present context, the term is used in three alternative ways.

i) Management as discipline

ii) Management as a group of people

iii) Management as a process

iv)Management as a profession

MANAGEMENT AS A DISCIPLINE

Discipline refers to a field of study having well-defined concepts and principles

When mgt refers as discipline, it includes various relevant concepts and principles, the knowledge of which aids in managing.

From this point of view, management can be treated either an art or science.

1. MANAGEMET AS SCIENCE

The essential elements of science are as follows;

1. Science is systematized by body of knowledge pertaining to a particular field of inquiry .It is systematized in the sense that it establishes cause and effect relationship between different variables.

2. It contains underlying principles and theories developed through continuous observation, experimentation and research.

3. The principles have universal applicability.

They can be applied under different situations barring a few expectations which can be logically explained.

The principles are verifiable and lead to predictable results.

4. The organized body of knowledge can be taught and learn in the classroom and outside. Physics, chemistry, mathematics and Economics are some of examples.

Therefore management is science because it contains all the essentials of science as follows.

1. In the management there is a systematized body of knowledge e.g functions of management.

Principles and theories are now available in every area of management e.g there are several principles to serve as guidelines for effective delegation of authority.

2. Principles of management have been evolved through practical experience and theoretical research over several decades.

3. Managerial principles have a wide and repetitive range of application. Application of management theory can be demonstrated through the quasi-laboratory method of case studies

4. Management theory and principles can be taught in classrooms and in industry.

NATURE OF SCIENCE OF MANAGEMENT                                                                            

Management is a social science like economics because it involves the study of human behavior.

Its principles are not hard and fast laws like those of physics or chemistry. Rather, they are flexible, guidelines to be modified in different situations

These cannot predict with certainty future behavior. This is because living and complex human beings in dynamic situations cannot be studied under controlled laboratory conditions. Validity of the principles cannot be tested through experiments. This is true not only of management but of all social sciences.

 Moreover, management is a comparatively young and a growing science which developed in the 20^th centuries. It s not fully mature and management scientists cannot explain clearly. Why and how a human being behaves in a particular way and will behave in the same way in future.

Therefore, management is called an inexact science or soft science.

The human element and environment dynamics in management make it an imperfect science.

Management is an applied science as a manager has to apply the principles just like a medical or legal practitioner. Management also is an interdisciplinary science as it draws freely on the knowledge from several other sciences like economics, mathematics, sociology, psychology and Anthropology

Thus management is neither exclusively an art nor exclusively a science but a combination of both. Essentially managing is the art of doing and management is the body of knowledge which underlies Art.

2. MANAGEMENT AS AN ART                                                                                     

Art is a personalized process and every artist has his own style.

Art is essentially creative and the success of an artist is measured by the results he achieves .Art is practice-based and perfection in it requires continuous practice over a long period of time.

Thus the main elements of an art are.

(a) Personal skills

(b) Practical know how

(c) Result orientation

(d) Creativity and

(e) Constant practice aimed at perfection.

Management is basically an art because of the following reasons

1. Like any other artist a manager applies his knowledge and skills to coordinate the efforts of his people.

2.  Management seeks to achieve concrete practical results e.g. profit, growth, social services  etc in a given situation.

3. Like any other art management is creative. It brings out new situation and converts resources into output.

4. Management is a personalized process. Every manager adopts his own approach towards problems depending upon his perception and the environmental conditions.

5. Effective management leads to realization of organizational goals.

The success of a manager is measured by the results he achieves. It is very much like saying that the proof of the pudding lies in eating. Mastery in management requires a sufficiently and long period of experience in managing. The managerial art can be refined through continuous practice.

MANAGEMENT AS A GROUP OF PEOPLE OR AS A TEAM

Management consists of all personnel having managerial responsibilities i.e. those individuals who guide and direct the efforts of other individuals to achieve specified objectives.

Managers occupy positions at different levels of authority but perform the same basic functions. Top level managers have greater authority than middle level managers who in turn, have greater authority than operating managers. In this way a system of authority is called chain of command is created in every organization

The management group consists of different types of managers.

1. Professional managers- formally trained in management and divorced from ownership.

2. Family managers- owner managers having little formal training and

3. Civil servant managers- persons occupying managerial positions in public sectors undertakings.

Top managers have become elite class or leading group in modern society on account of the enormous power and prestige at their command.

Also management as a team or group of people includes all those personnel who perform managerial functions in organization.

MANAGEMENT AS A PROCESS

In studying management discipline, we generally refer to management as a process. A process can be simply be defined as a systematic method of handling activities. However, the management process can be treated as a complex one which can be referred to as an identifiable flow of information through interrelated stages of analysis directed towards the achievement of an objective or set of objectives.

Management is a concept of dynamic rather than static existence in which events and relationships must be seen as dynamic, continuous and flexible.

Thus, management as a process includes various activities and sub-activities. In simple way management can be defined as what managers do.

However, this definition, through is simple suffers from two limitations.

1. There is a problem in identifying the people in the organization who can be called managers because there is no informality in the titles given to the people. E.g. people may be called as president, chief executive, managing director at the top level. Similarly at the middle level; they can be called as executive or accountant and at lower level as supervisors.

Therefore it becomes difficult to identify who is a manager and who is not, whose activities should be treated as managerial and whose activities as non- managerial. Thus what should be studied is not clear.

2. Even if the problem of identifying people as managers is solved, the problem of identifying managerial activities still exists because people known as managers may perform different kinds of activities, some of which may not really be a managerial.

Therefore, unless some yardsticks are prescribed to distinguish between managerial and non-managerial activities, managerial activities can not be identified.

In order to overcome the limitations, the total activities of an organization, can be divided into two.

(a) Operational

(b) Managerial

Those activities which are of operative nature through which actual work is accomplished such as handling machine by workers, putting the materials into the godown etc are called operational activities.

Some activities are performed to get things done like a supervisor instructing a worker to do a particular job or marketing manager instructing his sales man to contact the customers to sell the product etc. such activities are different from the first group  and are known as managerial activities.

Thus, management can be defined as the process of getting things done by others. Management is invariably defined as the process of getting things done through the efforts of others; getting from where we are to where we want to be with the least expenditure of time, money and efforts or coordinating individual and group efforts towards super ordinate goals,

Though these definitions of management as a process use different terms all of them convey the same set of meaning in their final analysis.

MANAGEMENT AS PROFESSION

Profession is an occupation for which specialized knowledge, skills and training are required and the use of these skills is not meant for self satisfaction but these are used for larger interests of the society and the success of the use of these skills is measured not in terms of money alone.

Thus all professions are occupations in the sense that they provide means of livelihood.

Characteristics of profession                              

1. Existence of an organized and systematized body of knowledge.

2. Formal method of acquisition of knowledge.

3. Existence of an association with professionalization as its goal.

4. Formulation of ethical codes

5. Service motives

Let us discuss the extent to which all these characteristics are found in management to determine whether management is profession or not.

1. Existence of knowledge

A profession emerges from the establishment of fact that there is a body of knowledge which cannot be skirted around but has to be studied for being a successful professional. The development of knowledge in management field has been due to the need for managing complex and large organizations in a better way. This management satisfies the requirement of a profession in the form of existence of knowledge.

However the concept of management is still evolving and continuously new principles are being developed though this does not affect its status as being a profession.

2. Acquisition of knowledge.

An individual can enter a profession only after acquiring knowledge, skills through formal training.

A professional is one who practices a profession and is regarded as an expert since he has mastery of a specific branch of learning upon which his occupation is based so that he may offer services to his clients. However, the emphasis is put on the initial acquisition of knowledge through some formal method. Therefore management graduates can put in better performance in the organization because of their familiarity with the various techniques of management

3. Professional Association

A professional association consists of firms and individuals whose membership is based on common professional, scientific or technical aims. The representative body of professional is needed to regulate and develop the professional activities.

The body may also prescribe the criteria for individuals who want to enter the profession.

4. Ethical Codes.

For every profession, some ethical standards are provided and every individuals of the profession is expected to be maintained conformity with these standards. The need for the ethical codes arises because of the fact that occupations whose practitioners have mastery over an area of knowledge have degree of power by virtue of the expertise and this power can be used for the benefit of the professionals at the cost of the society.

This has resulted in many occupations issuing a code of ethics of professional practice so that clients may know the standard and commitment that they should receive from a professional.

In management also, a code of conduct has been formulated to suggest the behavioral pattern for professional managers. Though there is a lack of universally accepted ethical codes for managers through the world. In most of the countries, managers are supposed to be socially responsible and it is their duty to protect the interest of all parties associated with the organization. These parties may be customers, suppliers, employees, financiers, creditors, government, and the general public

5. Service Motives

While ethical code provides the behavioral motive concept suggest that professionals should keep social interest in their mind while charging fees for their professional services, it is essential because the monetary value of professional service cannot be measured easily in the absence of market mechanism except the competition among the professionals themselves.

Since the professionals are in position to charge higher fees by virtue of their expert knowledge, hence associating high monetary value for their service, the success of any profession is measured not in terms of money it earns but the amount of social service it provides. This is true for management also.

Management is an integrating agency and its contribution in the society by way of integrating various resources into productive units is very important for the stability of the society.

This contribution of management cannot be measured in terms of money alone because without the integrating effort of management, resources worth millions of money are useless.

FEATURES OF MANAGEMENT

Features of management are as follows

1. Organized Activities

Management is a process of organized activities. Without organized activities, two groups of people cannot be involved in the performance of activities. Where a group of people are involved in working towards common objectives, management comes into existence.

The organized activities may take variety of forms ranging from a tightly –structured organization to every loosely-knit organizations. There can be different organizations but all have one thing in common, they want to progress efficiently towards the achievement of their objectives, through the coordinated efforts of people. This is done by management process.

Therefore, a single individual pursues his personal objectives, management has no operational objectives, and management has no operational meaning. However, when an attempt and is made to channel the individuals quest for personal objectives along the lines that contribute to the overall objectives of the group, management becomes the means by which random action is controlled.

2. Existence of objectives.

An objective or set of objectives should exist towards which the organized group activities are directed. Without objectives it becomes difficult to define the direction where organized group activities would lead to. The existence of objective is basic criterions of every human organization because all organizations are deliberate and purposive creation and therefore, they should have some objectives are agreed upon by the members or the organization.

The organizational objectives are the desired state of affairs which an organization attempts to realize. These realizations of objectives are sought through the coordinated efforts of the people constituting an organization.

3. Relationship among resources.

Organized activities meant to achieve common goals are brought about to; establish certain relationships among the available resources.

Resources include money, machine, materials and people.

All these resources are made available to those who managed; they apply knowledge, experience principle for getting the desired results. Thus the essence of management is integration of various organizational resources.

However, since people at operative do the things by the use of various physical and other resources, it is more important for the management to take care of integration of human resources.

Thus management is concerned with the proper utilization of human resources which in turns utilize .other resources.

4. Working with and through people.

Management involves working with people and getting organizational objectives achieved through them. The idea of working through people interpreted in terms of assigning activities to subordinates.

The superior- subordinate relationships are created because of organized activities. Through the process of assignment and reassignment of activities the actual work is performed by people at operative level which is the lowest level in the organization. Thus, a sizeable proportion of management principles relates to how human beings can put for better efforts in the organization.

5. Decision making.

Management process involves decision making at various levels for getting things done by others.

Decision making basically involves selecting the most appropriate alternative out of several, the quality of alternatives which a manager selects determines the organizations performance and the entire future of the organization rests on the degree to which the right decisions are made by managers, therefore, the success of failure of managers can be judged by the quality of the decisions that they make.

IMPORTANCE OF MANAGEMENT

Management has been important to the daily lives of people in groups since long. The importance of management can trace in the context of emergence of large sized organizations. The management of these organizations has become much more complex than what is used to earlier.

Along with the size, another dimension which has added to the complexity of managing is the changing nature of society and its various constituents, therefore, the issue before the present day managers is how to take care of these changes so that organizations achieves their objectives. Thus management has become crucial not only for the organizations but for the society too.

The survival and growth of an organization depends largely on the competence and character of its management. Every organization needs repeated stimulus which only managers can provide, management is the dynamic life growing element in every organization. Without management the resources of production remain the resources and can never become output.

Organizations stand or fall on the quality of their management because sounds management provides the following benefits:

1. Achievements of group goals

Management enables an enterprise to achieve its desired objectives through proper planning and control. It decides what should be done and how. It lays down the long-term and short- term goals keeping n mind the resources of the organizations. Management maintains order and coordination and without that will be utter chaos. Management also creates a sound organization structure that provides specialization.

Through well organized system of direction and control management keeps a close watch on the activities of the organization. Thus mgt makes an organization successful through sound resources planning and effective control.

2. Optimum utilization of resources

Materials, machinery and money are physical factors of production. The efficient use of these resources depends upon the efficiency and motivation of workers. Management makes the workers efficient and motivated through training, supervision and inspiring leadership.

Managers guide and motivate workers towards best performance. They tell workers what to do and how to do their jobs. Managers develop a spirit of mutual co-operation and sense of responsibility among workers.

Fulfillments of social obligation sound management monitors environment of business and makes necessary changes in business policies and practices so that to keep consumers and workers satisfied. In this way managers help an enterprise to fulfill its obligations towards different sections of society. Management balances and integrates various interests in group efforts.

3. Economic Growth.

Management is the catalyst of economic growth. We no longer talk of capital and labour ‘Development is a matter of human energies than of economic growth, and the generation of human energies is the task of management. Management is the mover and duty is the consequence.

4. Stability

Management ensures the survival of an organization in a fast changing environment. It coordinates the activities of different departments in an organization and maintains team spirit amongst the personnel. Just as mind controls the body, similarity management directs and controls the organization to keep it on the right track. 

5. Human Development

Management is not simply the direction of things but the duty of men. It improves the personality and caliber of people to raise their efficiency and productivity. A good manager serves as a friend and guides his subordinates.

6. Meet the challenge of change.

Management is the catalytic force that enables an organization to face the challenge of change. The environment of business has become very turbulent. Managers maintain a dynamic equilibrium between an enterprise and its environment through innovation and creativity.

Thus good management achieves both economic and social objectives by making best use of human and material resources and by providing satisfaction to people. Therefore management is an art of securing maximum results with a minimum of effort so as to ensure maximum prosperity for the employer and employee and give the public the best possible service.

The recent years the role of management has increased due to the following challenges

i. Growing size and complexity of business

ii. Changing technology

iii. Need of optimum utilization of resources

iv. Cut-throat competition in the market

v. Uncertain business environment

vi. Increasing expectations of social groups

vii. Growth of trade union movement

NATURE OF MANAGEMENT

The nature of management can be described as follows

1. Multidisciplinary

Management is basically multidisciplinary. This implies that, although management has been developed as a separate discipline, it draws knowledge and concepts from various disciplines. It freely draws ideas and concepts from such disciplines as psychology, sociology, anthropology, economics, ecology, statistics, separations, operation research, history etc.

Management integrates the ideas and concepts taken from these disciplines and presents new concepts which can be put into practice for managing the organizations. In fact the integration of knowledge of various disciplines is the major contribution of management and this integrated discipline is known as management. Therefore the contributions in the field can be expected from any discipline which deals with some aspects of human beings.

2. Dynamic nature of principles

Principal is a fundamental truth which establishes cause and effect relationships of a function. Based on integration and supported by practical evidences, management has framed certain principles. However these principles are flexible in nature and change with the changes in the environment in which an organization exists. Because of the continuous development n the field, many older principles are being changed by new principles. Continuous researches are being carried on to establish principles in changing society and no principle can be regarded as a final truth. N fact there is nothing permanent n the land slide of management.

3. Relative and not absolute principles

Management principles are relative, not absolute and they should be applied according to the need of the organization. Each organization may be different from others. The difference may exist because of time, place, social cultural factors etc. However, individuals working within the same organization may also differ. Thus a particular management principles of management should be applied n the light of prevailing conditions.

4. Management: Science or art. There is a controversy whether management is science or art. However, management is both science and art.

5. Management as profession

Management has been regarded as a profession by many while others argue that management has not achieved the status of profession.

6. Universality of management

Management is a universal phenomenon. However management principles are not universal applicable but are to be modified according to the needs of the situation. The nature of management suggests that s a multidisciplinary phenomenon, its principles are flexible relative and not absolute it is both science and art. It can be taken as a profession and finally s universal.

MANAGEMENT V/S ADMNSTRATION

It is desirable to resolve the terminological conflict between management and administration as there is often a terminological conflict between the two. Some authors suggest that there is no fundamental difference between management and administration. Whether difference between the two exists, t exists only n terms of their usage n different walks of life. Other authors suggest that these two terms are different and involve different set of activities.

Therefore, resolution of this conflict is necessary. At the initial level of development of management thought, no distinction was made between management and administration and both of the terms was raised by Olver Sheldon (1923) in his book the philosophy of management when he emphasized administration as a decision making function and management as execution function. After that distinction between the two terms was emphasized by many and terminological conflict proceeded further.

Various views expressed in this regard have led to the emergence of three approaches which are as follows

1. Administration is above management

2. Administration is a part of management

3. Management and administration are same

ADMINISTRATION IS ABOVE MANAGEMENT

According to many classical thinkers, administration is above management so far as different functions n the organization are concerned. They perceive that both administration and management activities are different though both of them may be performed by a single individual in an organization. The general view is that administration is relates to policy formulation and management relates to policy execution and these two activities are not the same.

Eg Spriegal states that “Administration is that phase of business enterprise that concerns itself with the overall determination of institutional objectives and the policies necessary to be followed in achieving those objectives. Management on other hand, s an executive function which is primarily concerned with carrying out broad policies lay down by the administrators”

FUNCTONS IN THE ORGANISATON

The basic approach of these authors is that administration determines the basic framework of the organization within which managerial functions are undertaken. Since these sets of functions are different, different sets of qualities are required.

ADMINISTRATION IS A PART OF MANAGEMENT

European school of thought holds that management s a comprehensive term and administration s a part of t. Brench (1985) argues that management is the generic term for the total process of executive control involving responsibly for effective planning and guidance of the operations of an organization. Administration is that part of management which is concerned with the installation and carrying out of the procedures by which the programme is laid down and communicated and the progress of activities is regulated and checked against plan.

Other authors in their opinion say that management comprises both policy making and execution. Administration is that part of management which involves dong routine things in a known setting. The other and more important part of management is risk taking, dynamic and innovative function.

Thus the European view of point is exactly opposite to the American view of point

3. ADMINISTRATION AND MANAGEMENT ARE THE SAME (ONE)

According to the third approach which is the most popular and practical one, management and administration are same. Both involve the same functions, principles and objectives. Fayol says that “all undertakings require planning, origination, command, coordination and control and in order to function properly all must observe the same general principles. He added by saying that we are no longer confronted with several administrative science but with one which can be applied equally well to public and private affairs. Thus there is no difference between management and administration.

McFarland, who made distinction between management and administration in an earlier addition of his book, revised his stand and viewed that, it is difficult to make distinction between management and administration; both are similar to each other. Thus management and administration are synonymous. The difference between the two terms lies mostly in their usage. N different countries or different fields of human organizations

E.g. Lepawsky has made observation that “The British conception seems to be the general European usage in which management is given a broader meaning than administration. In American usage, administration includes management and organization. The distinction between the two terms may be drawn by analyzing the origin of the word administration. Its origin is found in the bureaucratic structure of government or in regulations of some laws. The government often uses the word administrator instead of a manager to handle and manage its affairs. When handling the government affairs those administrators are to execute the broad policies laid down by the government, though they may also participate in policy formulation.

On the other hand management is normally used in business sphere.. However, whether administration is used in non- business field and management is used in business field does not make fundamental distinction between the two because of similarity of the process involved in these. In practice the two terms are used interchangeably because both involve the same principles and functions.

In order to resolve the terminological conflict between administration and management, management may be classified into

1. Administrative management

2. Operative management

Administrative management involves determination of objectives and policies where as operative management is primarily concerned with the execution of plans for the achievement of objectives. At every level of management an individual manger performs both types of functions. Every manager spends a part of his time on administrative management and the remaining time on operative management

Administrative and management comprises

• Board of directors
• Managing directors
• Production manager
• Plant superintendent
• Supervisor

It is clear from the figure that higher-level managers spend major portion of their time on decision making and policy formulation (administration) while lower level managers spend comparatively greater time on execution of plans and policies (management). But every manager, irrespective of his position or level in the organization, must plan as well as execute the plans.

This approach appears to be more logical because of two reasons

1. Two separate of sets of people are not required to perform administrative and managerial functions

2. Planning and doing are two faces of the same coin and it is not desirable to separate them

DISTINCTION BETWEEN ADMINISTRATION AND MANAGEMENT

The following are the distinction between management and administration.

NOTES ARE MISSING

UNIVERSALITY OF MANAGEMENT

Universality of management is another controversy which exists in management. As the area of management has increasingly commanded worldwide interest and recognition, the question whether it is a science with universal application has concerned scholars and practitioners alike. Settlement of the controversy is necessary to determine the extent to which managerial knowledge developed in one country can be transmitted to other countries. F it is universal, there is no problem of transferability of management knowledge. However in its absence, there is serious question on the universal use of management knowledge developed in a country.

The concept of universality of management suggests that transmission of management knowledge may be undertaken by

1. Managers from one-industrially developed country working in developing countries

2. People from a developing country coming to study and work in an industrial- advanced country and returning back to their countries.

3. through training and development programmes for managers n developing country.

Thus managerial knowledge can be transferred from one person to another person, from one firm to another firm in the same country and from one country to another country.

This transferability of managerial knowledge is meaningful only when it has universal application.

However, opinions about universal applicability of management are uniform. There are two divergent groups of arguments

1. One suggests that management is universal

2. Another suggests that management s not universally applicable

Therefore, it is essential to overcome this problem so that managers can take adequate precaution while applying management concepts developed n other countries most in developed countries.

ARGUMENTS FOR UNIVERSALITY

Experts subscribing to the concepts of universality of management suggest that the basics of management are universal and can be found n all types of originations situated n any country or culture.

Different researches about the universality management come with different conclusions. E.g. Richman (1997) has found that the evolving soviet approach to management utilizes that management functions that is planning, organizing, coordination, control and direction, leadership, motivation and staffing which have been essentially the same as long-held American concepts.

Similarly any other studies also support the view that management fundamentals throughout the world are almost the same, only their applications may differ because of various factors

Thus, management can be treated as universal phenomenon. Following arguments can be advanced to suggest the view of universality of management

1. Management as a process

Management as a process is universal. It s argued that management as a process is found in all organized activities irrespective to country, culture or size. The various elements of management process that is planning, organizing, staffing, directing and controlling are universal for all organizations and as a manager, each one must at one time or another, carry all these duty characteristics of managers. Only the intensity of a particular element may differ depending on the variables affecting management practices. This is the principle of universality of management. It implies that any theory or principle about particular managerial function will apply to all managers irrespective of their level in the organization, culture or a country

2. Distinction between management fundamentals and techniques

In order to ascertain the universality of management, it is proper to make distinction between management fundamentals and management techniques because it is the specific techniques which vary according to the needs of the situation. Management fundamentals are the basic principles and theories while management techniques are the tools for performing managerial functions. Whereas management techniques may differ from country to country management fundamentals will remain the same.

3. Distinction between management fundamentals and practices

Universality of management suggests that management fundamentals are the same only practices differ. This is so because management is both science and art. The most productive art s always based on an understanding of the science and arts are complementary. The art of managing or the practice of managing makes use of organized knowledge that is science. However, its practice is subjected to variations under different conditions. This may be true with science also.

URGUMENTS AGAINST UNIVERSALITY

According to this view, management is entirely situational and there is nothing like universal principles management. Therefore there is no such a way as the right way for a manager to operate or behave. There is only ways that are appropriate for specific tasks of specific enterprise under specific conditions faced by managers of specific temperaments and styles

Thus, what managers do depends on the circumstances with the results. With the results, we have various management principles which can be applied effectively most of the time but they cannot be applied effectively all the time.

This happen because of lack of universality of management principles which are effective n one country may not be effective n another country. Not only may that even two organisatons within the same country apply different management principles.

According to different researches findings in 1960s, 1970s various studies were conducted to test the universality of management and most of these studies have concluded that application of management principles varies in different countries because of differences in characteristics of these countries. Most of these studies have taken limited number of countries for comparison purposes.

During 1980 and 1990s Hofstede a Dutch management scholar, studied the management practices of 40 countries as concluded that not a single management principle has been applied uniformly in all these countries

The argument against the universal application of management principles suggest that there are certain factors which affect the application of principle or a set of principles of management.

These are

1. Cultural characteristics

2. Management philosophy

3. Organization objectives

CULTURAL CHARACTERISTICS

The application of management principles is determined by the culture of the country. Culture is a set of beliefs, attitudes and values that are shared commonly by the members of the society.

Culture affects people’s behavior significantly and any people oriented process. Therefore management is affected by the cultural characteristics of the country concerned. Since cultural characteristics of one country differ from others hence applicability of management principles differ too.

Hofstede (1993) has concluded that people vary on five dimensions as follows

1. National culture

2. Individualism and collectivism

3Uncertainty avoidance

4. Masculinity

5. Time orientation

1. Individualism and collectivism

Hofstede (1993) has concluded that people differ in terms of individualism and collectivism

• Individualism is the extent to which people place value on themselves; they define themselves by referring themselves as singular persons rather than as part of group of organization. For them individual tasks are more important than relationships .Countries that value individualism are USA, Great Britain, Australia, Canada, Netherlands and News land
• Collectivism is the extent to which people emphasize the good of the group society. They tend to base their identity on the group or organization to which they belong. At work this means that relationships are more important than individuals or tasks; employer-employee links a more like family relationships. Countries that value collectivism are Japan, Columbia, Pakistan, Singapore, Venezuela and Philippines.

2. Power distance

Power distance shows the degree to which people in a country accept that power. Power in the organizations can be distributed equally or unequally. Power distance is low when there is equal power distribution and it is high when there is unequal power distribution. People of a country with lower power distance prefer management practices that allow them freedom of work and self control. People of a country with high power distance prefer management practices that prescribe the work in a structured from with high degree of supervision and control

3. Uncertainty avoidance

Uncertainty avoidance is the degree to which people in the country prefer certainty which is the result of structure situation or uncertainty which is the result of unstructured situations. In many countries people prefer unambiguity while n many other countries people can tolerate ambiguity easily.

4. Masculinity

Masculinity includes quantity and quality of life. It indicates the degree to which people of a country are assertive and money-minded.

·        In a country which has masculine culture, people put emphasis I quantity of life and prefer assertiveness and competition for acquisition of money and material goods

·        In a country having feminine culture, people put emphasis on quality of life and prefer relationships and shows sensitivity and concern for the welfare of others.

5. Time orientation

Time orientation is the degree to which people of a country put emphasis on future or past and present. Thus, people have either long-term orientation or short term orientation

·        In a country having long-term orientation, people look to the future and prefer thrift and persistence. They prefer to work on projects having a distance  payoff

·        In a country having short-term orientation, people value past and present and have respect for traditions and social obligations

MANAGEMENT PHYLOSOPHY

Differences in philosophies of various originations put a limit on a person being a good manager in all types of organizations. Philosophy can mean attitude toward certain activities in a person’s philosophy of doing business. It may be an evaluation or interpretation of what is important or meaningful of life. Every organization, like an individual has philosophy of doing business. Differences of philosophies of various organizations require different kinds of managerial techniques. Even two organizations having different philosophy may require different types of managerial approaches. It may be pointed out that with a given culture, different organizations may adopt their own cultures and management philosophy.

ORGANISATIONAL OBJECTIVES

The objectives of an enterprise determine the type of management required. The skills, competence and experience of a management cannot as such be transferred and applied to the business organizations and running of other institutions. The basis of this view is that business organizations exist for economic ends and management consists of skills and techniques for attaining these ends.

Since the main objective of the business-profit consistent with security and welfare of the business-differs from that of non-business organization, management can transfer only analytical and administrative types of skills ability and experience

Transferability of management is determined b the extent of difference between the two types of industries

Thus, further way a manager moves n terms of organization and industry characteristics, the longer s the learning period and lower s the extent of transferability. Therefore, it implies that a person cannot demonstrate equal effectiveness n different types of organizations.

CONCLUSION

The argument for and against the universality of management concept should be analyzed in an integrated way so as to arrive at a particular conclusion. This conclusion is important because developing countries can import managerial know-how and principles developed by the advanced countries if they are universal. An integrated analysis suggests that there is certain management principles which are universal though their practices may differ from country to country or from organization to organization even within the same country.

Therefore, the knowledge of management can be transferred from one country to another country. Bulk management knowledge has been developed in the USA from where other countries have borrowed. The process of management transfer has been undertaken n the following ways

1. Through the use of American literature in the curriculum of management education in various countries

2. Through training of managerial personnel of developing countries in the United States

3. Through the consultancy assignment undertaken by management experts from USA n developing countries

4. Through the management practices adopted by multinationals operating n the developing countries

ORGANIZATION

 THE CONCEPT OF ORGANIZATION

 The classicist has used the term organization in the form of organizing which is a part of management process. Presently the term   organization is used in the following ways

1. Organization as entity

2. Organization as group of people

3. Organization as a structure and

4. Organization as a process.

A.     ORGANIZATION AS AN   ENTITY

 Most frequent use of the term organization on is an entity and it is referred to as enterprise as a whole like company, corporation, partnership firm e.g. in this form organization is defined as collectivity of people for achieving common objectives.

 William Scott has defined organizations as a collective of people that have been established for the pursuit of relatively specific objectives on more or less continuous basis.

FEATURES OF ORGANIZATION AS AN ENTITY

1.      Identifiable aggregation of human beings.

The identification is possible because human group is not merely a number of persons collected at random, but it is a group of persons who are interrelated.

The identifiable group of human beings determines   the boundary of the organisation.

 Such boundary separates  the  elements belonging  to the  organization  from  other  elements in  its  environment . However the separation is rarely absolute, that is some of elements in the organization will interact with its environment.

The amount of interaction can be thought of in terms of permeability of the organization’s    boundary. This refers to the flow of both people and information across the boundary.

2.      Deliberate and conscious creation.

Organization is a deliberately and consciously created human group. It implies that relationship   between organization and its members is contractual. The enter in the organization through and can be replaced also. The organisation can also recombine it’s personnel through promotion demotion and transfer. Such deliberate and conscious creation of human groups differentiates between casual or focused gathering having transitory relationships like a mob and social units.

Other social units like family community have some conscious planning e.g. family budget, power center (community chief) and replaceable membership (through divorce) but the extent to which these social units  are consciously planned and deliberately structured with  replaceable membership are much  less as compared to organisation.

Thus, companies, armies, hospitals e.t.c are included in the category of organization while tribes’ families’ friendship groups e.t.c are excluded.

3. Purposive creation.

The organization is a purposive creation i.e. all organizations have some objectives or set of objectives. The objectives are mutual agreed upon by members of the group.

An organizational objective is desired states of affairs which the organization attempts to realize. Organizations are contrived social instruments through which society or portion of it, obtained things that either could not be had as easily or cheaply. Organizations are thus, intervening elements between needs and their satisfaction. The success or failure of an organization is measured in terms of achievement of its objectives.

4. Coordination of activities.

In the organization there is a coordination of closely relevant activities of the members. The coordination is necessary because all the members contribute to commonly agreed goals.

From this point of view the organization must spell out the activities or roles which must be fulfilled in order to achieve the goals.

1.      Structure

The coordination of human activities requires a structure where in various individuals are fitted. The structure provides power centers which coordinate and control concerted efforts of the organization and direct them towards its goals.

Coordination among many diverse individuals is not possible without some means of controlling, guiding and timing the various individuals or groups. The very  idea of  coordination implies  that  each individual or units submits to  some  kind  of authority for  the sake  of achievement of common objective since the  individuals are structured in the hierarchy there is also  hierarchy of   authority and  depending upon the size and  nature of particular of  organization, there  may be  many  centre  of authority in the  organization. This does not mean that authority is always external coordination can be   achieved by self disciplining activities but some kind of authority is essential for coordination in organization. This may vary between complete self- discipline and complete autocracy.

6. Rationality

There is rationality in coordination of activities or behavior. Every org. has some specified norms and standards of behavior, such norms of behavior are set up collectively by the individual and every member of the organization is expected to behave according to these norms or standards.

The behaviors are governed by reward and penalty system of the organization which acts as a binding force on its members. The desirable behavior is rewarded and undesirable one is penalized. To enforce rationality in behaviors, organization also provides way for substitution of its members.

The characteristics differentiate an organization from other social units such as community, family and friendship group e.t.c. Such characteristics are the important from the point of view of their management.

In large organization, the members are arranged in a number of hierarchies which present some specific problems besides the usual ones associated with every organization large or small. Such problems may be in form of increased distance between decision centres and actual operative levels. This feature makes the coordination more difficult.

B.     ORGANIZATION AS A GROUP OF PEOPLE.

An organization comprise with a group of people who enable the organisation to achieve its goals. When organization is referred to as a group of people, it is mostly referred to as different groups created either formally or informally .In this form, an organization has the following features.

1. An organization always refers to people

2. The organization is composed of people who interact among themselves.

3. The interactions are specified by sort of structure i.e. who will interact with whom.

4. The interactions are meant to achieve some sort of objectives.

D. ORGANISATION AS A PROCESS

The term organization as a process is in the form of process of organizing through which organization structure is created. In the present context, the term organization is mostly referred to as an entity. Whenever it is used as a process it is termed as organizing rather as organization. In this context organizing is through which organization structure is designed.

CHARACTERISTICS OF ORGANIZATION

The main characteristic of an organization are as follows.

1. Common purpose

Every organization exists to accomplish some common goals e.g. a school, a hospital an army e.t.c

2. Division of labour

The total work of an organization is divided into function and sub- functions.

This is necessary to avoid the waste of time, energy and resources which arises when people have to constantly change from one work to another. It also provides benefits of specialization.

3. Authority structure

There is an arrangement of positions into a graded series. The authority of every position s defined. It is superior the position  above and subordinate to the below. This chain to the superior- subordinate of relationship is known as chain of command.

4. People:

 An organization is a group of persons. Therefore activity groupings and authority provisions must take into account the limitations and customs of people.

5. Communication

       Every org has its own channels of communication. Such channels are necessary for mutual understanding and cooperation among the member of an organization.

6. Coordination

There is a mechanism for coordinating different activities and parts of an organization so that it

functions as an integrated whole. Cooperative efforts are a basic feature of organization.

7. Environment

An organization functions in an environment comprising economic, social, political and

legal factors. Therefore, the structure must be designed to work efficiently in a changing

environment. It cannot be static or mechanistic.

8. Rules and regulations. Every organization has some rules and regulations for orderly functioning of people. These rules and regulations may be in writing or implied from customary behavior.

TYPES OF ORGANIZATIONS

There are two major types of organization

1. Formal organizations

2. Informal organization.

FORMAL ORGANIZATIONS

Formal organisaton refers to the organization structure deliberately created by management for achieving its objective(s).

Also Formal organisaton refers to the structure of well defined jobs, each bearing a definite authority, responsibility and accountability.

According to classical theorists the formal organization is built on four pillars as follows

(i) Division of labor

2. Scalar and functional processes

3. Structure and

4. Span of control

These also referred as principle of organisations.

From this point of view characteristic of formal organizations are as follows.

1. Organization structure is designed by the top management to fulfill certain requirements performance of necessary activities there by achieving organizational goals.

2. Organization structure is based on the principles of division of labor and efficiency in operations

3. Organization concentrates more on the performance of jobs and not on the individual performing the jobs.

4. The authority and responsibility assigned to each job have to be adhered to by the job

holders. Based on the concept of authority and responsibility people are placed in

hierarchy and their status is determined  accordingly.

5. Coordination among members and their control are well specified through processes

procedures and rules.

INFORMAL ORGANIZATION

Informal organization refers to the pattern of activities interaction and human relationships which emerged spontaneously due to social and psychological forces operating at the work place. Informal oganisation arises naturally on the basis of friends or some common interests which may or not be related with work. Informal oganisation is an unintended and non planned network of unofficial and social patters of human relationships.

Formal organization represents the pattern of interpersonal and intergroup relations that develop within the formal organization e.g. friendship groups, religion, home mates (people from the same area or region e.g.

CHARACTERISTICS OF INFORMAL ORGANIZATION

1. An Informal organization is a natural outcome at the work place. It is not designed and planned.

2. An Informal organization is created on the basis of some similarity among its members. The basis of similarity may be age, sex, place of origin, social group, religion, personal characteristics, linking’s e.t.c

3. Membership in an informal organization is voluntary. A person may become member of several informal organizations at the same time.

4. Behaviors of members of the informal organization is coordinated and controlled by group norms and not by the norms of the formal organization.

DIFFERENCES BETWEEN FORMAL AND INFORMAL ORGANIZATIONS

Formal and informal organization may be distinguished in the following ways.

1.      Origin

Formal organization is created deliberately and consciously by management while informal organization emerges spontaneously on account of socio- psychological forces operating at the workplace. People working together develop certain linking and disliking each other.

2.      Purpose.

Formal organisation is created for achieving the legitimate objectives of the organization while informal organization created by the members of the organization for their social and psychological satisfaction.

3. Size

Formal organisation may be quite large in size particular when these groups are constituted to give representation to various interest groups. But informal groups tend to be small in size so as to maintain group cohesiveness.

4. Nature of groups

Formal groups are stable and may continue for a very long period of time while informal groups are quite unstable in nature. They tend to disappear or cease to be attractive for members when changes take place in personal linking and delinking. Members may form alternative groups.

5. Number of informal groups

The number of informal groups is larger than the number of formal groups.

Moreover, there may be overlapping because an individual may become members of several information groups.

6. Authority

Formal organization is bound together by a hierarchical structure in which authority flows from higher to lower levels. Members of a formal group derive their authority from the process of delegation. In informal groups all members are equal although some may command more authority by virtue of their personal qualities.

7. Behavior of members

Behaviors of the members in the formal Organization are governed by formal rules and regulations. The rules are normally directed towards efficiency and rationality. In the informal groups or the behavior of the member is governed by norms,  belief and value of the group.

8. Communication

In formal organization communication normally flows through the prescribed chain of command in informal groups communication, pass through the informal channels which do not have one single form.

9. Abolition.

Management can abolish the formal groups at any time. But management has no control over informal groups which are the creation of natural desire of human beings to interact.

10. Leadership

In Formal Organsation, leadership is vested in managers but in informal organizations leadership is not associated with managership

11. Status.

There are sharp status differentials among the members of Formal Organisaton, Such differentials inhibit free interaction and socialization. In informal organization, there may be social rankings among people but these do not prevent free interaction among people.

WHY INFORMAL GROUPS ARE FORMED

Basic reason for the emergence of the inform groups is that the formal organistion does not satisfy all the needs of employee.

Informal, groups emerged due to the following reasons

1. Desire to socialize with others.

The need for relationship with others is a basic human need. Man is a social being and he wants to associate with others. He does not like to work in isolated loneliness. This quest for social satisfaction prompts people to form informal groups. Informal groups provide social satisfaction and a sense of belonging to the members.

It provides an opportunity for people behave in a natural and uninhibited manner free from rigidity and oppressiveness. It provides them a sense of identity and self –respect and helps in solving their personal problems and difficulties.

2. Job satisfaction

Informal organization adds a human touch to the cold and in human qualities of the formal structures. It provides a means for developing friendships and fellow feelings.  Informal fills the psychological vacuum or avoid created by dull boring and monotonous jobs. It allows people to satisfy their psychological needs.

It creates a pleasant and satisfying work environment. People resort to informal interactions to release their tension and frustrations.

Informal relationships provide them a sympathetic ear to their problems and provide an outlet to ventilate their grievances. In this way, informal organizations serve as a safety value to release daily tensions and frustration. Thus, informal organization exercises significant influence on job satisfaction and productivity.

3. Source of protection

Informal organization offers a powerful protection against such threatening and oppressive forces. It provides a sense of security by protecting the individual against arbitrary treatment by management .It provides stability to work groups and psychological support to the members.

Informal croups also protect their members from outside pressure and work pressure.

4. Support to formal structure.

Informal organizations provide support to the informal structure. It blends with the formal organization to make a workable system for getting the work done. Formal structure tends to be inflexible and cannot meet every problem in a dynamic environment. Informal organization leads flexibility and dynamist to the formal structure. It also brings cohesive to formal organization. Informal organization can overcome the deficiency in the formal structure through suitable innovations.

5. Communication Device.

Formal organization lays down the lines of communication which tend to be slow. Informal organizations provide the management with an addition channel of communication in the form of grapevine supplements official communication. It provides valuable feedback to managers on their style of functioning.

6. Overcoming managerial limitations.

Authority may not always be effective and managers may have to relay on voluntary compliance of people out of people out o sheer good working of the organization several ticklish situations arise for which the prescribed procedures provided no guidance in such situations informal organization has its own ways of coping with problems 10 can fill in the mgt gaps by educating people how to really per formal the task.

7. Training and Development

1nformal organiston is a form for socialization of new managers and for helping them to learn the work practices and rules. Moreover, informal organization provides training ground for the development of informal leaders.

8. Coordination and control.

An informal organization helps to develop team spirit and group pride. As a result need for close supervision is reduced. Members of the cohesive groups feel less nervous and express less anxiety

• Groups develop performance standards and group cohesiveness reduces turnover and absenteeism
• Informal leaders can help managers in solving problem like absenteeism late- coming e.t.c.
• A properly motivated informal group can achieve much better results than a formal group.

According to Chester Barnard “informal organization brings cohesiveness to a formal organization, a feeling of belonging of status of self respect and of gregarious satisfaction”.

HOW TO MANAGE INFORMAL GROUPS

A manager must recognize that informal groups are a fact life and cannot be done away with.  

A manager can modify behavior of informal groups to make it more useful to the organization.

Manager should adopt a flexible and accommodating approach towards informal organization rather than repressive approach. Repressive attitude of a manager hardens the attitude of informal group members leading to destructive conflicts. Therefore the best approach is to recognize the existence of informal organizations and to integrate it with the formal organization.

Management should understand the goals, structure processes and norms of informal organization. A manager should find ways and means of taking advantage of the informal processes and behavior of the one hand to neutralized their adverse effects on the other.

A manager should take the following measures to handle informal groups successfully

1 Let employees know that management accepts and understands informal organization.

2. Consider possible influence upon informal groups when taking any decision or action.

3. Integrate interests or goals of informal groups with those of the formal organisation.

4. Involve group in Decision Making process

5. Make use of group method of supervision.

6.Resolve inter- group conflicts by locating  a common  enemy, bringing sub- groups into interaction  with each other and locating a super ordinate goal.

7. Keep formal activities from unnecessarily threatening informal organization in general

8. Maintain an objective atmosphere where correct information is easily available.

Seminar question

Clearly discuss the advantages and disadvantages of organization within the formal organization

TOPIC 2:  EVOLUTION OF MANAGEMENT THOUGHTS

A management practice is as old as human civilization when people started living together in groups.  Every human group requires management and the history of human beings is full of organizational activities. However, the study of how managers achieve results is predominantly a 20^th c phenomenon. In the earlier years, management could not get the attention of researchers because the field of business in which the management concepts were applied was held low, unworthy of study; different approach of other social scientists like economists, sociologists, psychologists etc towards management and business organization; as sciences and commonly-held beliefs that managers are born and not made. These factors created the situation where the need for a systematic study of management was not felt. This situation continued till the beginning of the 20^th C

The situation started changing with the beginning of 20^th c especially the WWI created the situation where people started thinking of solution to the problem of how limited resources could be applied in better way. The WWI added further problem to this end. Growing competition and complexity of managing large business organizations further provided impetus to developing systematic management concepts and principles.

In recent years, there has been worldwide competition for markets, power and progress. The increasingly severe competition has come from such factors

i. Technological innovations and their dissemination in business

ii. Growing technological obsolescence

iii. Increasing in capital investments

iv. Freedom at national and international markets

v. Increasing buyers sovereignty in the markets

Besides the growing competition in business, the complexity of managing business also has increased due to

i. increasing size of business organizations

ii. High degree of division of labor and specialization

iii. Increase of government regulations and controls to business more special oriented

iv. Organized union activities to put pressure on management

v. Pressure of various conflicting interests groups to meet their demands from the organization

Both these factors .e growing competition and complexity in managing business have demanded the efficiency in management process which can come not merely by trial and error methods but by developing and applying sound management concepts and principles.

These factors emerged gradually which attracted the attention of a wide variety of intellectuals- economists, sociologists, anthropologists, mathematicians and management practitioners to study the organizations and processes through which these originations could be made more effective.

Each of these groups of intellectuals viewed the organizations and the processes there in a particular way and made recommendations accordingly. This led to the emergence of a variety of orientations and approaches in management; some making clear demarcation from others, some overlapping others. Similarity, a particular approach did not really start with the end of the previous one so far as time period is concerned. There was considerable overlapping of time too.

Early contributions Scientific management Administrative/operational management Human relations approach Social systems approach Decision theory approach Management science approach Human Behavior Systems approach Contingency  approach

Up to the 19th c 1900-1930 1916-1940 1930-1950 1940-1950 1945-1955 1950-1960 1950-1970 1960s onwards 1970

EVOLUTION OF MANAGEMENT THOUGHT

Also management thoughts and approaches are in the form of;

1. Classical

2. Neo classical

3.  Modern

1. Classical approach includes

i. Scientific management

ii. Administrative/ operational management

2 Neo- classical approaches includes

i. Human relations approach

ii. Social systems approach

iii. Decision theory approach

iv. Management science approach

v. Human behavior approach

3 Modern approaches includes

i. Systems approach

ii. Contingency approach

iii. Some relevant portion of the above approaches but not in classical approach.

However, this classification is time specific because what is modern n today’s context, may not remain the same in future.

PRE-SCIENTIFIC MANAGEMENT

CLASSICAL APPROACH

Classical approach also s known as traditional approach or empirical approach

I. SCIENTIFIC MANAGEMENT

The concept of scientific management was introduced by Frederick Winslow Taylor n USA n the beginning of the 20^th C. This concept was further carried on by frank and Lillian Gilbert, Henry Grant, George Berth, Edward Felen e.t.c. Scientific  management was concerned essentially with improving the operational efficiency of the shop-flour level. Taylor has defined scientific management as follows;

                    ‘’ Scientific management is concerned with knowing exactly what you want men to do and then see in that they do it in the best and cheapest way. Since Taylor has put the emphasis on solving managerial problems in a scientific way, often he is called as ‘’ father of scientific management ‘’ and his contributions as the principles of scientific management. Though his contributions have become traditional in present day context, still the label of scientific management is used for his contributions.

Taylor joined Midvale steel company in USA as a worker and later on became a supervisor. During his period he continued his studies and eventually completed his Master of Engineering. Subsequently, he joined Bethlehem steel company.

At both all these places, he carried experiments about how to increase efficiency of people. Even after his retirement, he continued to develop scientific management. On the basic of his experiments, he published many papers and books and all his contributions were complied in his book ‘’ scientific of management’’.

Taylor’s contributions can be described in two parts; elements and tools of scientific management and principles of scientific management.

ELEMENT AND TOOLS OF SCIENTIFIC MANAGEMENT

Taylor conducted various experiments at his work-places to find out how human beings could be made more efficiency by standardizing the work and better method of doing the work. These experiments have provided the following features of scientific management.

1. Separation of planning and doing.

Taylor emphasized the separation of planning aspect from actual doing of the work. Before Taylor’s scientific of management, a worker used to plan about how he had to work and what instruments were necessary for that.

The worker was put under the supervision of a supervisor commonly known as gang boss. Thus, supervisor’s Job was merely to see how the workers were performing. This was creating a lot of problems and Taylor emphasized that planning should be left to supervisor and the worker and the worker should emphasize only operational worker.

2. Functional foremanship.

Separation of planning from doing resulted in development supervision system which could take planning, work adequately besides keeping supervision on workers. For this purpose, Taylor evolved the concept of functional foremanship based on specialization of functions.

3. Job analysis

Job analysis is undertaken to find out the one best way of doing the things. The best way of doing a job is one which requires them least movements, consequently less time and cost. The best way of doing the things can be determined by taking up time-motion fatigue studies. Job analysis as given by Taylor, suggests the fair amount of day’s work requiring certain movements and rest period to complete it.

4. Standards

As far as possible standardization should be maintained in respect of instruments and tools, period of work, amount of work, work conditions, cost of production e.t.c. These things should be fixed in advance on the basis of job analysis and various elements of costs that in performing a work.

5. Scientific selection and training of workers.

Taylor has suggested that workers should be selected on scientific basis taking into account their education work experience, aptitude physical strength e.t.c. A worker should be given work for which he is physically and technically most suitable.

Apart from selection, proper emphasis should be given on the training of workers which makes them more efficient and effective.

6. Financial incentives

Financial incentives can motivate to put in their maximum efforts. If provisions exist to earn higher wages by putting extra efforts, workers will be motivated to earn more. Taylor has suggested wages should base on individual performance and not on the position which he occupies.  Further the wages rate should be fixed on accurate knowledge and not on estimates.

7. Economy

While applying scientific management not only scientific and technical aspects should be considered but adequate consideration should be given to economy and profit. For this purpose, technique of cost estimates and control should be adopted. The economy and profit can be achieved by making the resources more productive as well as eliminating the wastages. Taylor has clarified by giving examples of how resources are wasted by not following scientific management.

8. Mental Revolution

Scientific management depends on then mutual co-operation between management and workers. For this co-operation, there should be mental change both parties from conflict to cooperation. Taylor feels that this is the most important feature of scientific management because on its absence no principle of scientific management can be applied. 

PRINCIPLES OF SCIENTIFIC MANAGEMENT

The following are basic principles of scientific management that Taylor saw underline the scientific management.

1 Replacing Rule of Thumb with Science

Taylor has emphasized that in scientific management, organizational knowledge should be applied which will replace rule of thumb. While the use of scientific methods denotes precision in determining any aspect of work, rule of thumb emphasizes estimation since exactness of various aspects of work like-

·        day’s fair work

·        standardization in work

·        Differential piece rate for payment is the basic core of scientific management. It is essential that all these are measured precisely and should not be based on mere estimates. This approach can be adopted in all aspects of managing.

2. Harmony in group action

Taylor has emphasized that attempts should be made to obtain harmony n group action rather than dispute. Group harmony suggests that there should be mutual give and take situation and proper understanding so that the group as a whole contributes to the maximum.

3.  Cooperation

Scientific management involves achieving cooperation rather than chaotic good will. Cooperation between management and workers can be developed through mutual understanding and a change in thinking.

Taylor has suggested ‘’ substitution of war for peace, hearty and brotherly cooperation for contentment and strife, replacement of suspicious watchfulness with mutual confidence, of becoming friends instead of enemies.

4. Maximum output

Scientific management involves continuous increase in production and productivity unsteady of restricted production either by management or by workers. Taylor hated inefficiency and deliberate curtailment of production. His concern was with large size of the cake. In his opinion “There is hardly any worse crime to my mind than that of deliberately restricting output”.

Therefore, he advised the management and workers to turn their attention towards increasing the size of the surplus until the size of the surplus becomes so large that is necessary to quarrel over how it shall be divided.

5. Development of workers.

In scientific management, all workers should be developed to fullest extent possible for their own and for the company’s highest prosperity. Development of workers requires their scientific selection and providing them training at the work place.

Training should be provided to workers to keep them fully fit according to the requirement of new methods of working which may be different from non- scientific methods.

CRITICAL ANALYSIS OF SCIENTIFIC MANAGEMENT

Scientific management created awareness about increasing operational efficiency at the shop-floor level by adapting systematic methods as against the rule of thumb which was prevalent at that time.

However  from  the point  of view of the development theoretical framework, the principle  of scientific management were  concerned with problems  at the operating  levels and didn’t emphasize management  of an organization from the manager’s point of view.

Therefore, it was more relevant from engineering point of view rather than management point of view. One author has later suggested that Taylor can be regarded as “father of industrial engineering rather than the father of scientific management”

Similarly persons advocating scientific management have emphasized physiological variables affecting human behavior at workplace, both in terms of work efficiency and methods of motivating the workers.

As such, the scientific management is more relevant to the mechanization and automation-technical aspect of efficiency than the broader aspects of management of an organization.

Apart from the theoretical considerations, Taylor’s scientific management was opposed by trade unions industrialists and general public.

The induction of scientific management led to agitation by trade unions in different productions units. The major reasons for the opposition of scientific management were as follows; 

1. There were many of the followers of Taylor who took aggressive mechanical view of production and sidelined human aspects at the work place. This created aggressive attitudes among workers

2. The work used to be performed under close and strict supervision based on authoritarian approach. Workers were not allowed to raise their voice even for genuine grievances   

3. There was lack of scientific standardization of work and whatever standards used to be set by management. The workers had to follow strictly. Such standards often used to raise production norm without taking into consideration the factors affecting such norm.

4. The most crucial element which was under contention was the differential peace rate system. The workers even the efficient ones, and their unions opposed this system on the claim that it was a new method of exploiting workers by the industrialists. It may be mentioned that trade unions were quite popular at that time

ADMNISTRATIVE MANAGEMENT

 The real father of modern operation management theory is the French industrialist Henry Fayol. His contributions are generally termed as operational management or administrative management

Fayol looked at the problems of managing an organization from top management point of view. He has used the term administration instead of ‘management’ emphasizing that there is unit of science of administration. For him administration was a common activity and administrative doctrine was universally applicable.

From administrative point of view he placed commerce, industry, religion, philosophy and the state on equal footing. Therefore management is a universal phenomenon. However he has emphasized that principles of management are flexible and not absolute and are usable regardless of changing and special conditions. Fayol found that activities of an industry organization could be divided into six groups

1.  Technical: relating to production

2. Commercial: buying, selling and exchange

3. Financial such for capital and its optimum use

4. Security protection of property and person

5. Accounting including statistics

6. Managerial planning, organization, command, coordination and control.

Fayol pointing out that these activities exists in business of every size.

Fayol has divided has approach of studying management into three parts

i. Managerial qualities and training

ii. General principles of management

iii. Elements of management

MANAGERIAL QUALITIES AND TRAINNING

Fayol was the first person to identify the qualities required by a management. According to him there are six types of qualities that a manager requires. These are as follows.

1. Physical healthy, vigour and address

2. Mental ability to understand and learn judgments, mental vigour and capability

3. Moral (energy, firmness, initiative, loyalty, tact and dignity

4. Education (general acquaintance with matters, not belonging exclusively to the function performed)

5. Technical (peculiar to the function being performed)

6. Experience (arising from the work)

Fayol has observed that the most important ability for the worker is technical, the relative importance of managerial ability increases as one goes up the scalar of chain,  with insight becoming the most important ability for top level executives.

On the bass of this conclusion, Fayol recognized a widespread need for principles of management and for management teaching. He held that managerial ability should be acquired first in school and later n the workshop. In order to acquire managerial knowledge he developed principles of management to be taught in academic institutions.

GENERAL PRINCIPLES OF MANAGEMENT

Fayol has given 14 principles of management. He has made distinction between management principles and elements. While management principle is a fundamental truth and establishes cause-effect relationship, management elements denotes the function performed by a manager.

While giving the management principles, Fayol has emphasized two things

i. The list of management principles is not exhaustive but suggestive and has discussed only those principles which he followed in most occasions.

ii. Principles of management are not rigid but flexible

Various principles according to Fayol are as follows

1. Davison of work

Fayol has advocated division of work to take the advantage of specialization. According to him specialization belongs to natural order. The workers always work on the same part, the managers concerned always with the same matters, acquires ability, sureness and accuracy which increases their output. Each change of workers brings n it training and adaptation which reduces output “Yet division of work has its limits which experience and a sense of proportion teach us may not be exceeded (Fayol, 1949). This division of work can be applied at all levels of the organization.

2. Authority and responsibility.

Fayol find authority as a continuation of official and personal factors. Official authority is drived from the manager’s position and personal authority is derived from person qualities such as intelligence, experience, moral worth past services etc. Responsibility arises out of assignment of activity in order to discharge the responsibility; there should be parity of authority and responsibility.

3. Discipline

All the personnel serving in an organization should be disciplined. Discipline is obedience, application, energy, behavior and outward mark of respect shown by employees.

Discipline may be of two types

i. Self imposed discipline which springs from within the individual and is in the nature of spontaneous response to a skilful leader

ii. Command discipline which stem from a recognized authority and utilizes deterrents to secure compliance with a desired action which is expressed by established customs, rules and regulations. The ultimate strength of command and discipline can be obtained by sanctions in the forms of remuneration, warnings, suspension, demotion, dismissal etc. However, when applying such sanctions, people and attendant circumstances must be taken into account. This can be learned by experience and tact of the managers

4. Unity of command

Unity of command means that a person should get orders and instructions from only on superior. The more completely an individual has a reporting relationship to a single superior, the less is the problem of conflict in the instructions and the greater is the feeling of personal responsibility for results. Fayol has considered unity of command as an important aspect of managing an organization. He says    “unit of command should be violated, authority is undermined, discipline is in risk order disturbed and stability threatened. This rule seems fundamental to me and so I have put it to the rank of principle”

5. Unity of direction

Each group of activities with the same objectives must have one head and one plan. Unity of direction is different from unity of command n the sense that the former s concerned with the functioning of the organization I respect of its grouping of activities or planning while the latter is concerned with personnel at all levels n the organization  terms of reporting relationship.

Unity of direction provides better coordination among various activities to be undertaken by an organization.

6. Subordination of individual interest to general interest.

Common interest is above the individual’s interest. Individual interest must be subordinated to general interest when there is conflict between the two. However factors like ambition, laziness, weakness etc tend to reduce the importance of general interest. Therefore superiors should set an example in fairness and goodness. The agreement between the employers and the employees should be fair and constant vigilance and supervision

7. Remuneration of personnel

Remuneration of employees should be fair and provide maximum possible satisfaction to employees and employers. Fayol does not favour sharing plan for workers but advocated it for managers. He was also in favour of non-financial benefits in the case of larger-scale organization.

8. Centralisation

Fayol refers the extent to which authority is centralized or decentralized. Centralization and decentralization are the question of proportional. In small firms, centralization is a natural order, but in large firms a series of intermediaries is required share of authority and initiative left to intermediaries depends on the personal character of the manager, his moral worth, the reliability of his subordinates and also on the conditions or the business.

Since both absolute and relative values of managers and employees are constantly changing. It is desirable that the degree of centralization or decentralization may itself vary constantly.

9. Scalar chain

There should be scalar chain of authority and communication ranging from the highest to the lowest. It suggest that each communication gong up or coming down must flow through each position in the line of authority. It can be short-circuited only in short circumstances when its rigid following will be detrimental to the organization.

10. Order

This is the principle relating to the arrangement of things and people. In material order there should be a place for everything and everything should be in its place. Similar in social order, there should be the right man in the right place. This kind of order demands precise knowledge of the human requirements and resources of the organization and a constant balance between these requirements and resources. Normally bigger the size of the organization, more difficult this balance is.

11. Equity

Equity is a combination of justice and kindness. Equity in treatment and behavior is liked by everyone and it brings loyalty in the organization. The application of equity requires good sense, experience and good nature of soliciting loyalty and devotion from subordinates

12. Stability of tenure

No employee should be removed within short time. There should be reasonable security of jobs. Stability of tenure is essential to get an employee comfortable to new work and succeeding in doing it well. Unnecessary turnover is both cause and effect of bad management

13. Initiative

Within the limits of authority and discipline, managers should encourage their employees for taking initiative. Initiative is concerned with thinking out and execution of a plan. Initiative increases enthusiasm and energy on the part of human beings.

14. Esprit de corps

This is the principle of “Union is strength” and extension of unity of command for establishing team work. The managers should encourage esprit de corps among his employees. The erring employees should be set right by all directions and not by demanding written explanations. Written explanations complicate the matters.

ELEMENTS OF EMPLOYEES

Fayol holds that management should be viewed as a process consisting of five elements. He is regarding these elements as functions of management. These functions of management are

1. Planning

Fayol regarded planning as the most important managerial functioning and failure to plan properly leads to hesitation, false steps and untimely changes in directions which cause weakness in the organization process.

2. Organization commanding

Creation of origination structure and commanding function s necessary to execute plans

3. Coronation

Coordination is necessary to make sure that everyone is working together

4. Control

Control looks whether everything s proceeding according to plan

5. Organization

In short functions of management are: planning, organization, commanding, coordination and controlling

The contributions of Fayol have made the real beginning of development of management as a separate field of study. His principles of management hold good even today, though pronounced long back. N fact many of the things were developed in management on the lines of Fayol much after his contributions.

RELEVANCE OF FAYOL’S PRINCIPLES

According to the classification of era of management development, Fayol’s principles are treated as classical while present day management adopts systems of contingency approach. This approach suggests that while managing an organization t should be treated as a system and management action should take into account the contingent factors both within and outside an organization.

However this does not mean that Fayol’s principles are being applied today. However it can be said that not all principles can be applied in all originations. Fayol also recognized this fact and suggested that management principles are not rigid but flexible and their use requires intelligence, experience and proportion.

CONTRIBUTIONS OF TAYLOR AND FAYOL: A COMPARISON

Taylor and Fayol have made attempts to the development of management principles in somewhat more systematic way. Both were contemporary though from different countries. Both are complementary to each other and have some what is similarity and dissimilarity

SIMILARITY

Both Taylor and Fayol have seen and analyzed the problems of managing from practitioners’ point of view. The similarity exists on the following lines

1. Both have attempted to overcome managerial problems n a systematic way.

2. Both have developed some principles which can be applied n solving managerial problems

3. Both have emphasized that management actions can be effective f these are based on sound principles

4. Both of them have emphasized that managerial qualities are acquirable and can be acquired through training. Therefore organizations should make attempts to develop these

5. Both have emphasized harmonious relationship between management and workers for achievement of organizational objectives.

DISSIMILARITY

Taylor has concentrated on the shop floor while Fayol has concentrated o high managerial levels Prasad page 56

OTHER ADMINSTRATIVE THEORIESTS

Besides Fayol contributors have come from other administrative theorists, notably among them being Max Weber, Sheldon, Mooney, Reiley, Urwick, Luther Gullick Sloan, Merriam Stene and Dale, Oliver Sheldon has added the concept of ethics and social responsibility to the scientific study of management. His normative approach was able to develop for the first time to view management both a science and a philosophy.

Mooney and Reiley emphasized basic principles of origination. These principles are

·        Coordination principle

·        Scalar principle

·        Functional principle

·        Staff phase of functionalism

They have also emphasized that all organizations irrespective of the field of their operation have common features requiring these principles. They all require coordination and have system of hierarchy and clearly define duties and responsibilities for each job.

BUREAUCRACY

The term bureaucracy has been used widely with invidious connotations directed at government and business. Max Weber who analysed the functioning of the church, government, military and business organizations believed that bureaucratic structure is the most efficient form of structure for all types of organizations. Weber insists that bureaucracy is the most rational means of carrying out imperative control over human beings.

Therefore bureaucracy s administrative system designed to accomplish large-scale administrative tasks by systematically coordinating work of many individuals

Weber has observed three types of power in an organization i.e

1. Traditional power

2. Charismatic power

3. Rational legal authority or Bureaucracy

FEATURES OF BUREAUCRACY

Max Weber (1864-1920) had given a number of features of bureaucracy as follows.

1. Administrative class

Bureaucratic organizations generally have administrative class responsible for maintaining coordinative activities of the members. Main features of this class are as follows

i. People are pad and are whole time employees

ii. They receive salary and other perquisites normally based on their positions

iii. Their tenure in the organization is determined by the rules and regulations

iv. They do not have any proprietary interest in the organizations

v. They are selected for the purpose of employment based on their competence

2. Hierarchy

The basic feature of bureaucratic organization is that there is hierarchy of positions n the organizations. Hierarchy is a system ranking various positions in descending scale from top to bottom of the organization.

In bureaucratic organization, offices also follow the principle of hierarchy. i.e. each lower office is subjected to control and supervision by higher office. Thus, no office is left uncontrolled in the organization. This hierarchy serves as lines of communication and delegation of authority. It implies that communication coming or going up must pass through each position. Similarly, a subordinate will get authority from his immediate supervisor.

However this hierarchy is not unitary but sub-pyramids of officials within the large organizations corresponding to functional divisions exists. Thus there are offices with some amount of authority but with different kinds of functions operating n different areas of competence.

3. Division of work

Work of the organization is divided on the basis of specialization to take the advantages of division labour. Each office in the bureaucratic organization has specific sphere of competence. This involves

i). a sphere of obligations to perform functions which have been marked as a part of a systematic division of labour

ii). The provision of incumbent with necessary authority to carry out these functions

iii. The necessary means of compulsion are clearly defined and their use is subject to define conditions. Thus, division of labour tries to ensure that each office has a clear defined area of competence within the organization and each official knows the area n which he operates and the area in which he must obtain from action so that he does not over step the boundary between his role and those of others. Further, division of labour also tries to ensure that no work is left uncovered.

4. Official rules

A most and most emphasized feature of bureaucratic organizations s that administrative process s a continuous and governed by official rules. Bureaucratic organization is antithesis of ad hoc, temporary and unstable relations. A rational approach to organization calls for systematic of maintaining rules to ensure twin requirements of uniformity and coordination of efforts by individual members in the organization.

These rules are more or less stable and exhaustive. When there is no rule on any aspect or organizational operational, the matter is referred upward for decision which subsequently becomes precedent for future decision on the similar matter.

5. Impersonal relationship

A notable feature of bureaucracy is that relationships among individuals are governed through the system of official authority and rules. Official positions are free from personal involvement, emotions and sentiments. Thus, decisions are governed by rational factors rather than personal factors. This impersonality concept is used in dealing with organizational relations as well as relations between the organization and outsiders

6. Official records

A bureaucratic organization is characterized by maintenance of proper official records. The decision and activities of the organization are formally recorded and preserved for future references. This is made possible by extensive use of filling system in the organization. An official records is almost regarded as encyclopedia of various activities performed by the people in the organization

PROBLEMS OF BUREAUCRACY

Bureaucratic organization has been considered once superior than ad hoc or temporary structure. It has been termed as rational and ideal leading to efficiency.

The efficiency in bureaucratic organization comes through rationality and predictability of behaviours because everyone knows the consequences of his action before actually the action is undertaken.

However bureaucracy has been criticized because of its inefficiency. There are many dysfunctional aspect of bureaucracy which is referred to as bureapathology. Looking into the needs of modern organizations bureaucracy has many shortcomings and is therefore not suitable. The major problems of bureaucracy are because of the following factors

1. Invalidity of bureaucratic assumptions

2. Goal displacement

3. Unintended consequences

4. close- system perspective

INVALIDITY BUREAUCRATIC ASSUMPTIONS

The source of bureaupathology lie the invalidity of various assumptions of ideal bureaucracy. In most of the cases, either the conditions are not found n practice or even if found may not result into efficiency.

Specifically the following aspects of bureaucracy work against efficiency of the organization, though they are supposed to contribute efficiency

1. Rules are normally provided for guidelines but often they become source of inefficiency because of too much emphasis on rules, their misuse and peoples apathy from rules.

2. Rigid organization hierarchy works against efficiency. Its overemphasis of superior-subordinate relationships is unnecessary which lead to detrimental to congenial organizational climate.

2. In dealing with people impersonal approach cannot be adopted because people have feelings, emotions and sentiments which affects decision making. Thus, people cannot work totally according to rules and prescriptions.

3. Goal displacement

Goal displacement occurs when resources are used for a purpose other than for which the organization exists. Thus purpose that has replaced the original goals and value may be followed too excessively that this itself becomes end for the organization.

Over the period, people are provided incentives on such behavior. E rules are means for achieving organizational goals but following of rules may become the objectives of the organization and organizational objectives may become secondary. People may be judged on the basis of observance of rules and not results. E.g. In government organizations, the performance may be judged on the basis of whether expenditure has been incurred on the lines of rules and regulations. Thus, expenditure becomes the criterion of performance measurement and not the results achieved through expenditure.

3. Unintended consequences

 In bureaucratic organization there may be many consequences which have no been visualized but which emerge because of the system. Such unintended consequences may be of following nature.

i. There may be trained incapacity in the organization. Trained incapacity relates to a phenomenon where a person is trained at the matter from a single point of view. Thus, he does not see beyond his training and tries to correlate the matter with total situation on the basis of his training. This happens of excessive specialization.

ii. There is conflict between professionals and bureaucrats. Professionals try to work according to their discipline for efficiency when bureaucrats try to emphasize rules and regulations. Often there is conflict between organization and individuals. There are many characteristics of bureaucratic organization put more restrictions through rules and regulations. Thus people try to avoid these rules and regulations

4. Inhuman organizations

The most important criticism of bureaucracy has come from behavioural scientists who have emphasized on human behavior n the organization. According to them, bureaucratic organization is inhuman and works like machine in which there is no importance of human beings e.g a mature personality requires less control, innovation in behavior and flexibility in working. In design of bureaucratic organization is against these features. Thus bureaucracy works against the basic nature of human behavour.

Warren Bennis (1969) see the model as overly mechanical and no longer useful. According to him the flows and dysfunctions of the bureaucratic organization are extensive but the main are as follows

i. It is inhuman and denies man’s needs

ii. It is incompatible with the development of a mature personality

iii. it promotes conformity

iv. It does not consider the informal organization and interpersonal difficulties

v. The hierarchy interferes with communication

vi. Innovation and new knowledge are stifled

vii. It is ineffective n turbulent environment

These criticisms are representative of lack of human aspect of bureaucracy. The thrust of these criticisms s bureaucratic organization makes inadequate assumptions about the real nature of human beings and does not address itself to the interaction of people within the organization

5. Closed system perspective

A bureaucratic organization has closed system perspective. Though a social organization cannot be a totally closed system but it may learn towards closed system its working

·        A closed system is self contained and self maintaining

·        It is general rigid and static

·        It ignores external conditions and makes no allowances for adapting to changes in the environment

·        It is viewed as operating within a vacuum

Specific characteristics of closed system social organization include predictability, rationality, optimization, internal efficiency and certainty

Since behaviours are assumed to be functional and all outcomes predictable, those activities that take place in the environment that is changes in social, political economic and other factors can be ignored.

Bureaucratic can work well when environment is highly static and predictable. However, the nature of environment for large organizations today is highly dynamic and heterogeneous. In dynamic environment, more interaction between organization and environment is required. There is high need for information monitoring and processing. Thus an open system perspective is more suitable for the management of modern-day organizations while bureaucratic organization has closed system perspectives

NEW CLASSCAL APPROACH

1. HUMAN RELATIONS

Many of the findings of the earlier writers, particularly of scientific management, which focused attention on the mechanical and physiological variables of organizational functioning were tested n the field to increase the efficiency of the organizations

Surprisingly positive aspects of these variables could not evoke positive response I work behavior and researcher tried to investigate the reason for human behavior at work. They discovered that the real cause of human behavior was something more than the mere physiological variables. Such findings generated a new phenomenon about the human behavior and focused attention on the human beings in the organization.

As such, this new approach has been called ‘human relations approach of management’. The human relations approach was born out of a reaction to classical approach and during the last seven decades, a lot of literature on human relations has been developed. The essence of the human relations contributions is contained in two points

i. The social process of group behaviour can be understood in terms of clinical method analogous to the doctor’s diagnosis of the human organism

2. Organizational situation should be viewed in

·        social terms

·         in economic terms

·          Technical terms

Among human relations approach, there are many contributions and many more researches are being carried out. For the first time, an intensive and systematic analysis of human factor in organizations was made in the form of Hawthorne experiment.

The Hawthorne plant of the general electric company, Chicago, was manufacturing telephone system bell. It employed about 30,000 employees at the time of experiments. In respect of material benefits to the workers, this was the most progressive company with pension and sickness benefits and other recreational facilities. There was great deal of dissatisfaction among the workers and productivity was not up to the mark. In1924 the company asked for the assistance from the national Academy of sciences to investigate the problems of low productivity.

In order to investigate the real causes behind this phenomenon, a team was constituted led by Elton Mayo (Psychologists) Whitehead and Rothisberg (sociologists) and company representative William Dickson. The researchers originally set out to study the relationship between productivity and physical working conditions. They conducted different researches in four phases with each phase attempting to answer the question raised at the previous phase

The four phases were as follows

1. Experiments to determine the effects of changes in illumination on productivity, illumination experiments 1924-1927

2. Experiments to determine the effects of changes in hours and other working conditions on productivity relay assembly test room experiments 1927-1928

3. Conducting plant-wide interviews to determine workers attitudes and sentiments, mass interviewing programme 1928-1930

4. Determination and analysis of social organization at work, bank wiring observation, room experiments 1931-1932

ILLUMINATION EXPERIMENTS

Illumination experiments were undertaken to find out how varying levels of illumination (amount of light at the work place, a physical factor) affect the productivity. The hypothesis was that with higher illumination, productivity would increase

·        In the first series of experiments a group of workers was chosen and placed in two separate groups

·        One group was exposed to varying intensities of illumination. Since this group was subjected to experimental group

·        Another group, called as control group continued to work under constant intensities of illumination

The researchers found that as they increased the illumination in the experimental group, both groups increased production. When the intensity of illumination was decreased, the production continued to increase in both the groups

The production in the experimental grouped decreased only when the illumination was decreased to the level of moonlight. The decrease was due to light falling much below the normal level.

Thus it was concluded that illumination did not have any effect on productivity but something else was interfering with the productivity

At the time, it was concluded that human factor was important in determining productivity but which aspect was affecting, it was not sure. Therefore another phase of experiments was undertaken.

BANKING WIRING OBSERVATION ROOM EXPERMENTS

These experiments were carried out between November 1931 and may 1932 with view to analyse the functioning of small group and its impact on individual behavior.

·        A group of 14 male workers were employed in the bank wiring room nine wiremen, three soldier men and two inspectors.

·        The work involved attaching wire to switchers of certain equipment used to telephone exchange

·        Hourly wage rate for the personnel was based on average group output of each worker while bonus was to be determined on the basis of average group output.

·        The hypothesis was that n order to earn more workers would produce more and in order to take the advantages of group bonus, they would help each other to produce more. However this hypothesis did not hold valid. Workers decided the target for themselves which was lower than the company’s target. Eg group’s target for a day was connecting 6,600 terminals against 7,300 terminals set by the company

The workers gave following reasons for the restricted output

1. Fear of employment

The basic reasoning of workers was that if there would be more production per head, some of the workers would be put out of the employment

2. Fear of raising the standards

Most workers were convinced that once they had reached the standard rate of production, management would rise the standard of production reasoning that it must be easy attain

3. Protection of slower workers

The workers were friendly on the job as well as off the job. They appreciated the fact that, they had family responsibility that required them to remain in the job. Since lower workers were likely to be retrenched, the faster workers protected them by not overproducing.

4. Satisfaction on the part of management

According to the workers management seemed to accept the lower production rate as no one was being fired or even reprimanded to restricted output.

·        The workers in the group set certain norms of behavior including personal conduct

·        The workers whose behaviours were in conformity with both out-put norm and social norm were most preferred. Thus study suggested that information relationship are important factor in determining the human behavior

·        During the course experiments, workers were counseled for good human relations in the company’s plant

·        The counseling was in regard to

o   Person adjustment

o   Employee relations

o   Management-employee relations

·        The supervisor tended to understand and accept the problems of workers and management tried to sense their feelings which were helpful in formulating the action for resolving management-employees conflict

IMPLICATONS OF HAWATHORNE EXPERIMENTS

Hawthorne experiments have opened a new chapter in management bu suggesting management through good human relations in the company. Human relations involve motivating people in the organisation in order to develop teamwork which effectively fulfills their needs and achieves organizational goals.

Hawthorne experiments have tried to unearth those factors which are important for motivating people at work place

The major findings of the experiments can be presented below

1. Social factors in output

An organization is basically influenced by social factors. Elton Mayo one of the researchers engaged in Hawthorne experiments has described an organization as ‘a social system, a system cliques, informal status system ritual and mixture of logical and non logical behavior.

·        Thus an organization is not merely a formal structure of functions in which production is determined by the official prescription but the production norm is set by social norms.

·         Since people are social beings, their social characteristics determine the output and efficiency in the organization.

·         Economic rewards and productivity do not necessarily go together

·        Many non –economic rewards and sanctions affect the behavior of workers and modify the impact of economic rewards

·        While motivating workers these factors should be taken into account

2. Group influence

Workers being social beings, they create groups which may be different from their official groups. Groups are formed to overcome the shortcomings of formal relationships. The group determines the norm of behavior of members. Thus, management cannot deal with workers as individuals but as members of work group subject to the influence of the group.

3. Conflict

The informal relations of workers create groups and there may be conflict between organization6 and groups so created. The conflict may be so because of incompatible objectives of the two.

However, groups may help to achieve organizational objectives by overcoming the restraining aspect of the formal relations which produce hindrance in productivity

Conflict may also arise because of maladjustment of workers and organisation. As the individual moves trough the time and space within the organization, there constantly arises the end for adjustment of individual to the total structure

In the absence of such adjustment either individual progress upward at rapid pace or the organization structure itself may change over the time while the individual with the respect to organization structure, hence adjustment is required.

3. Leadership

Leadership is important for directing group behavior and this is one of the most important aspects of managerial functions. However, leadership cannot come only from a formally appointed superior as held by earlier thinkers.

There may be informal leaders as shown by bank wiring experiment. In some areas, informal leaders are more important in directing behavior because of his identity with group objectives. However a superior is more acceptable as a leader if his style is in accordance with human relations approach that is the superior should identify himself with the workers

5. Supervision

Supervisory climate is an important aspect in determining efficiency and output. Friendly to the workers, attentive genuinely concerned supervision affects the productivity favorably e.g. in banking wiring room experiments, an entirely different supervisory climate more friendly to the workers and less use of authority n issuing orders existed which helped n productivity, while n regular departments supervisors were concerned with maintaining order and control which produced inhibiting atmosphere and resulted in lower productivity

6. Communication

The experiments show that communication is an important aspect of organization. Through communication, workers can be explained the rationality of a particular action, participation of workers can be sought in decision making concerning the matter of their importance, problems faced them can be identified and attempts can be made to remove these. A better understanding between management and workers can be developed by identifying their attitudes, opinions and methods of working and taking suitable actions on these.

CRITICISM OF HAWTHORNE EXPERIMENTS

The experiments have been widely criticized by some behavioral scientific objectivity used in arriving at various conclusions. Some critics feel that there was bias and preconception

The following are the criticism that have been made against the Hawthorne experiments

1. The Hawthorne researchers did not give sufficient attention to the attitudes that people bring with them to the workplace. They did not recognize such forces as

·        Class consciousness

·        The role of unions

·        Extra plant forces o attitudes of workers

The Hawthorne plant was not a typical plant because it was a thorough unpleasant place to work. Therefore the results could not be valid for others.

3. The Hawthorne studies look upon the workers as a means to an end and not an end himself. They assume acceptance of management goals and look on the worker as someone to be manipulated by management

SOCIIAL SYSTEMS APPROACH

Social systems approach management has extended the implications of human relations approach further. This approach has introduced by Vilfredo Pareto a sociologist. His ideas were later developed by Chester Bernard who synthesized the concept of social system approach

According to this approach an organization is essentially a cultural system composed of people who work in cooperation. As such for achieving organizational goals, cooperative system can be developed by understanding the behavior of people in groups.

FEATURES OF SOCIAL SYSTEM APPROACH

1. Organization is a social system, a system of cultural relationships.

2. Relationships exist among the external as well as internal environment of the organization.

3. Cooperation among group members is necessary for the achievement of organizational objective.

4. For effective management, efforts should be made for establishing harmony between the goals of the organization and the various groups there in.

CONTRIBUTONS OF CHESTER BERNARD

The contributions of Chester Bernard to management, particularly social systems approach, are overwhelming. Hs book “the function of the executive s regarded as the most influential book on the management during the pre-modern management era.

Hs analysis of management s truly a social systems approach since in order to comprehend and analyze the functions of executives, he has looked for their major tasks in the system in which they operate.

N determining the tasks of executives, he has analysed the nature of cooperatives social system, as he found no-logical factors also influencing human behavour n the organization. This s a marked departure from the earlier approach

The major contributions of Bernard can be presented as follows

1. Concept of organization

 Bernard suggests that classical concept of organization does not fully explain the features of an organization. He has defined formal organization as a system of consciously coordinated activities of two or more persons. On his opinion an organization exists when the following three conditions are fulfilled.

·        There are persons able to communicate with each other

·        There are willing to contribute to the action

·        They attempt to accomplish a common purpose

2. Formal and informal organizations

An organization can be divided into two or i.e. formal and informal

·        The formal organization has  a conscious coordinated interactions which have deliberate and common purpose

·        The informal organization refers to those social interactions which do not have consciously coordinated joint purpose. The informal organization exists to overcome the problems of formal organizations.

Bernard has suggested that executives should encourage the development of informal organization to serve as means of communication, to bring cohesion in the organization and to protect the individuals from dominance and on slaughter of the organization. Both formal and informal depend on each other and there s continuous interaction between the two. Therefore in managing the organization the manager should take into account both types of organizations.

3. Elements of organization

According to Bernard, there are four elements of formal organization. These are

·        System of fictionalization so that the people can specialize .e departimentation.

·        System of effective and efficient incentives so as to induce people to contribute group action

·        System of power which will lead group members to accept the decision of executives

·        A system of logical decision making.

4. Authority

Bernard does not agree with the classical view that authority transcends from the top to down. He has given a new concept of authority which is termed “acceptance theory of authority” or bottom up authority.

In his opinion, a person does not obey an order because it has been given by a superior but he will accept a communication as being authoritative only when four conditions met simultaneously.

i. He can understand the communication

ii. He believes that it is not consistent with the organization purpose

iii. He believes it to compatible with his personal interest as a whole

iv. He is mentally and physically able to comply with it.

5. Function of the executive

Bernard has identified three types of functions which an executive performs in a formal organization. These are

i. Maintenance of organizational communication through system of organization i.e. through formal interactions

ii. The security of essentials services from individuals’ n the organization so as to achieve origination goals

iii. The formulation and definition organization purpose

6. Motivation

Apart from financial incentives which have their own limitations in motivating the people, Bernard has suggested a number of non-financial techniques for motivating the people. Prominent among these are

·        opportunity of power and distribution

·        pride of workmanship

·        pleasant organisation

·        participation

·        mutual supporting person attitudes

·        feeling of belongingness

7. Executive effectiveness

To make the executive effectiveness requires a high order of responsible leadership. While cooperation is the creative process, leadership is the indispensable fulminator of its forces.

·        Leadership is the most strategic factor n securing cooperation from the people

·        Executive leadership demand high caliber, technological competence, technical and social skills

The executive leadership should not have preconceived notions and false ideologies. It should be above person predictions and prejudices notions and false ideologies. The leadership is likely to commit the following four types of errors

i. The oversimplifications of the economy of organizational life

ii. Disregarding the reality of informal organisaton and its necessity

iii. An inversion of emphasis upon the objectives and subjective aspects of authority

iv. A confusion of morality with responsibility

Therefore executive should take adequate care to overcome these problems

8. Organization equilibrium

Organization equilibrium refers to the matching of individual efforts and organizational efforts to satisfy individuals. The cooperation of individuals with the organization brings forth new activities. These organizations must afford satisfaction to individuals comprising it.

·        This is required to maintain equilibrium in the organization. This equilibrium is not static but dynamic

·        Demands and aspiration of individuals change and the organization has to cope with the dynamic situation

·        The equilibrium of the organization depends on the individuals working on it, other organizations and the society as a whole. Thus the origination has to take into account the changes n the society

·        The organization equilibrium can be perceived not only through logical appraisal but through analysis and intuition. Thus, many logical factors also enter into organizational analysis.

Therefore the reasons for action should not only be logical but must also appeal to those attitudes, predilections, prejudices, emotions and mental background that cover action

The above contributions of Bernard show how he was concerned for the development of organization through social systems. His contributions are regarded quite high in management.

DECISION THEORY

Decision theory approach looks at the basics problem of management around decision making. That is the selection of suitable courses of action out of the given alternatives. Major contributions in this approach have come from Simon and other contributors are March, Cyert forrester et.c.

The major emphasis of this approach is that decision making is the task of every manager. The manager is the decision maker and organization is a decision making unit. Therefore, the basic problem in managing is to make rational decision.

From this point of view decision theory approach has the following features.

1. Management is essentially decision making

2. The members of the organization are decision makers and problem solvers.

3. Origination can be treated as a combination of various decision centers. The level and importance of organizational members are determined on the basis of the importance

4. Quality of decision affects the organizational effectiveness

5. All factors affecting decision making are the subject-matter of study of management. Besides process and the techniques involved in decision making, other factors affecting the decisions are information systems and social psychological aspects of decision makers

Thus, it covers the entire range of human activities on organization as well as the macro conditions within which the organization works.

CONTRIBUTIONS OF HERBERT SIMON

Herbert Simon has made significant contributions in the field of management particularly administrative behavior and decision making. His contributions cover both social systems and decision theory approaches.

Simon examined the principles of management given by Urwick and Gullick and found them contradictory and ambiguous. He described these principles as ‘myth’ “slogans” and home ‘proverbs’.

Simon looked at organizational problems in totality of socio-psychological context and viewed that decision making takes place in this context

His contributions in management are summarized below

1. Concept of organization

Simon described an origination as a complex network of decision processes all appointed towards their influence upon the behavior of the operatives. He has viewed the organization containing distribution and allocation of decision making functions. According to him, physiology of the organization is to be found n the process whereby organization influences the decisions of its members, supplying these decisions with their devices.

2. Decision making.

Perhaps the greatest contribution, Simon is in the field of decision making. This is why he has been referred to as decision theorists. According to him the decision process can be broken into a series of three sequential steps. These are

i. intelligent activity: the initial phase of searching the environment for conditions calling for discussion

ii. Design activity: the phase of inventing, developing and analyzing possible course of action to take place

ii. Choice activity: The final phase of actual choice selecting a particular course of action from those available

3. Bounded rationality

Simon is of the view that man is not completing rational. He has criticized the theories which are based on the assumptions of complete rationality

·        He has  advocated the principle of bounded rationality

·        Managers cannot maximize an account of various limitations and constraints

·        A decision is rational if for achieving the desired ends, appropriate means are adopted. However it is not easy to separate the ends from the means because of end-means chain

·        The relationship between organizational activities and ultimate objectives is also not clear. Moreover, a simple ends-means chain analysis may not help in reaching accurate conclusion because what is an end at one point of time or at one level of organization might be a means at the other time or at other level of the organization

·        4. Administrative man

·        Simon has given the concept of administrative man as the model of decision making. The model is based on the following assumptions

i. Administrative man adopts satisfying approach in decision making rather than the maximizing approach of economic man.

ii. He perceives the world as a simplified model of real world. Thus, he remains content with simplification.

iii. He can make his choice without first determining all possible alternatives and without ascertaining that these are in facts all the alternatives

iv. He is able to make decision with relatively simple rule of the thumb or tricks of trade or force of habit. The administrative man model describes the decision making process of managers truly than alternatives theory of economic man.

5. Organization communication.

Simon he emphasized the role of communication in organization. According to him, there are three stages in the communication process

i. Initiation

ii. Transmittal

ii. Receipt of information

There may be blockade of communication at any of these three stages. In order to overcome the problem of communication, he has emphasized the role of informal communication and has attached less importance to the formal network of authority.

MANAGEMENT SCIENCE APPROACH

Management science approach also known as mathematical or quantitative measurement approach visualizes management as a logical entity, the action of which can be expressed in terms of

·        Mathematical symbols

·        Relationships

·        Measurement data

The primary focus of this approach is the mathematical model. Through this device managerial and other problems can be expressed in basic relationships and where a given goal is sought, the model can be expressed in terms which optimize that goal. This approach draws many things from the decision theory approach and provides many techniques for rational decision making.

1. Management is regarded as the problem solving mechanism with the help of mathematical tools and techniques.

2. Management problems can be described n terms of mathematical symbols and date. Thus every managerial activity can be quantified.

3. This approach covers decision making systems analysis and some aspects of human behavior

4. Operations research, mathematical tools, simulation models etc are the basic methodologies to solve managerial problems.

IMPLICATIONS OF MANAGEMENT SCIENCE

 Management science approach is a fast developing one in analyzing and understanding management.

·        This has contributed significantly in developing orderly thinking in management which has provided exactness management discipline

·        Various mathematical tools like sampling, linear programming, game theory, time series analysis and simulation, waiting line theory etc have provided more

·        However is very difficult to call it a separate school of management because it does not provide the answer for the total managerial problems

·        Moreover, many managerial activities are not real capable of being quantified because of involvement of human beings who are governed by many traditional factors also.

HUMAN BEHAVOUR APPROACH

Human behavior approach is the outcome of the thoughts developed by behavoural scientists who have looked at the organization as collectivity of people for certain specific objectives.

Since management involves getting things done by people, the study of management must revolve around human behavior. The approach also known as ‘leadership behavioural science’ or human resources’ approach brings to bear the existing and newly –developed theories and methods of the relevant behavioural sciences upon the study of human behavior.

Human behaviour approach has been goal and efficiency-oriented and considers the understanding of human behavior to be the major means of that end

The human behaviour approach emphasizes human resources in an organization more as compared to physical and financial resources

Since this approach studies human behaviours ranging from personality dynamics of individuals at one extreme, to the relations of culture at the other.

This can be divided into two groups

i. Interpersonal behavior approach

ii. Group behavior approach

Writers in interpersonal behavior approach are heavily oriented towards individual psychology while writers in group behavior approach rely on social psychology and emphasize on organizational behaviour

 MODERN APPROACH

1.     SYSTEM APPROACH

Perhaps systems approach has attracted the maximum attention of thinkers in management particularly in present era. Though this approach is of comparatively recent origin, starting late 1960s, it has assumed considerable management in its totality based on empirical data.

The basic idea of systems approach is that any object must rely on a method of analysis involving simultaneous variations of mutually dependent variables.  This happens when system approach is applied in management.

FEATURES OF A SYSTEM

A system is an assemblage of things connected or interrelated so as to form a complex unity; a whole composed of parts and subparts in orderly arrangement according to some scheme or plans.

Richard (1973) has been defined a system as “organized of complex whole, an assemblage or combination of things or parts forming a complex unitary whole”

On the basis of this definition, various features of a system can be identified: -

1.     A system is basically a combination of parts subsystems

·        Each part may have various subparts

·        When a sub system is considered as a system without reference to the system of which it is a part, it has the same features of a system.

Thus, a hierarchy of systems and subsystems can be arranged. An organization is a system of mutually dependent parts each of which may include many subsystems.

2.     Parts and subparts of a system are mutually related to each other, some more, some less, some directly, some indirectly.

·        The relationship is not natural given or unalterable in a social system.

·        The relationship is in the context of the whole.  Each change in one part may affect other parts also.

Therefore, how various parts are given relationship is important for the functioning the system.

3.     A system is not merely the totality of parts and subparts but their arrangement is more important.  The whole becomes greater than the total of individual parts because of the type of arrangement made in these parts and subparts.

Thus, a system is an interdependent framework in which various parts are arranged.

4.     A system can be identified because it has boundary.  In the case of social system, the boundary is not visible because it is not like a line or wall that functions to preserve or to define what is inside.

·        Instead the boundary maintains proper relationship between the system and its environment objects laying outside the system.

·        Identification of this boundary in the case of human organization facilitates the management of a system by differentiating those which can be controlled because they are outside the system.

5.     The boundary of a system classified it into two parts i.e close system and open system. All living organisms are open system while all non-living organism are closed systems.

6.     System transforms inputs into outputs.  This transformation process is essential for the survival of the system.

There are three aspects involves in this transformation process.  These are:

(i)                Inputs

(ii)              Mediator

(iii)            Outputs

Inputs are taken from the environment transformed into outputs and given back to the environment.

·        Various inputs may be in the form of information, money, material, human resources etc.

·        Outputs may be in the form of goods and services.

·        The total relationship may be called as input-output process and system works as mediator in this process.

However, in this process, the system restores some of the inputs taken from the environment. Restoring the inputs taken from the environment helps the system maintain its structure and avoid decay and death.

Thus the system can grow over the period of time e.g. business organization survives and grows over the period of time by earning profit in the process of transformation inputs into outputs.   Profit is essential for the organizations to survive.

OPEN AND CLOSED SYSTEMS

The boundary of a system classified it into two parts.

(i)                Closed system

(ii)              Open system

All living organisms are open system while all non-living systems are closed system.  The major differences between the two are as follows: -

1.     Closed systems are those that have no interactions with environment i.e. no outside system impinges on them or for which no outside systems are  to be considered.  Open system are those that interact with their environment, i.e. they have systems with which they relate, exchange and communicate.

2.     Closed systems are self contained and self maintaining as they do not interact with environment.  Open systems interact with their environment and in this interaction; they import energy and export output. Because of this interaction, closed systems are rigid and static but open systems are dynamic and flexible as they are subject to change by environmental forces.

3.     Closed systems are generally mechanical e.g an automatic watch. Therefore, once they are set, they work.  However, open systems are affected by environmental factors, and they have to be adjusted according to the environment.  Thus, they require restructuring because of change in environment.

4.     Closed system are like close loop while open systems are characterized by negative entropy. They import more energy than is expanded or consumed. Thus they can grow over the period of time. When this relationship is reversed, the open systems decline.

5.     Open systems have feedback mechanism that help them to maintain homoeostatis of kind of equilibrium.

Homoeostatis is a process through which a system regulates itself around a stable state. E.g human body works on the principle of homoeostatis. It maintains its temperature relatively at a constant level despite variations in the environment temperature.  However, organizational equilibrium is not static.  It being a dynamic system gets feedback to maintain dynamic equilibrium. In closed systems, there is no such feedback mechanism.

The distinction between closed and open systems is there but really no system is a closed one but has some properties of open systems.  The classification of various systems into closed and open is not very proper. Therefore, it is more appropriate to think systems in terms of the degree to which they are open or closed rather than using a dichotomy of open-close.

FEATURES OF MANAGEMENT AS A SYSTEM

Under a system approach, management is regarded as a system: -

·        It draws heavily from system concepts

·        When systems concepts are applied to management it is taken in the following ways:

1.     Management as a social system

-         Management can be considered as a system. management is a social system and unlike biological or mechanical systems.

-         Management as a system consists of many subsystems which are integrated to constitute an entity.

2.     Management as open system

Management, like any other social system, is an open system.  It interacts with its environment out of this interaction, it takes various resources allocates and combines these resources to produce desirable outputs which are exported to the environment.  Consideration is required at the levels of taking inputs-transforming them into outputs and exporting the outputs to the environment.

3.     Adaptive

Organization being an open system, its survival and growth in a dynamic environment demands on adaptive system which can continuously adjust to changing environment.

·        Management tends to achieve environmental constancy by bringing the external world under control or bringing internal modification of organizational functioning to meet the needs of changing the world.

·        Since there is a provision of feedback mechanism, management can evaluate its performance and take corrective actions.

·        The basic role of management is considered in terms of its adaptability to environment.

4.     Dynamic

Management as a system is dynamic it suggests that management attempts at achieving equilibrium in the organization.

·        However, this equilibrium is not static as happens in mechanical system.

·        Management moves towards growth and expansion by preserving some of the energy.

·        Managerial effectiveness depends on this energy exchange.  Therefore , it is not only the internal processing process that determines the effectiveness of management but also how it interacts with the changing environment in terms of talking inputs and giving outputs also determines the effectiveness.

5.     Probabilistic

Management is probabilistic and deterministic. A deterministic model always specifies the use of model in condition with pre-determined results.  Therefore the outcome of an action can be predicted accurately.

·        Probabilistic model, the outcome can be assigned only probability and not certainty.  Management being probabilistic points out only the probability and never the certainty of the performance and consequent of the results.

·        Management has to function in the face of many dynamic variables and there cannot be absolute predictability of these variables.

6. Multilevel and multidimensional

Systems approach of management points out the multilevel and multidimensional features of management.

It has both macro and micro approach.

·        At macro level, it can be applied to suprasystem, say a business system as a whole.

·        At micro level, it can be applied to an organization. However it has the same characteristics at all these levels. Suprasystem level, system level, subsystem level.

Thus, both parts and whole are equally important in managing.

7. Multivariable

Management is multivariable and involves taking into account many variables simultaneously.  This feature of management suggests that there is no simply cause effect phenomenon rather an event may be the result of so many variables which themselves are interrelated and interdependent. This interrelatedness and interdependence makes managing quite a complex process.  Thus it realizes the complexity of management.

6.     An integrated approach

System approach of management takes an integrated view of managing. It indentifies the reason for a phenomenon in its wider contest taking into account the total factors affecting phenomenon.

In other approaches, a particular phenomenon has been explained in terms of a single factor or cluster of factors.

·        Management tries to integrate the various factors to find out the reasons behind a phenomenon.

·        It emphasizes how the management of one system of the organization should be taken in relation with others because other subsystems become environment for the given system.

·        Thus, the problem in one subsystem should not be traced into the subsystem only that but in a much wide context.

LIMITATION OF SYSTEMS APPROACH

Though systems approach possess conceptual framework of much higher order as compared to other approaches, it may be emphasized that this is the unified theory of management. System approach   came in a big way in managerial analysis and raised the hope of becoming general and unified theory of management.

A general and unified theory can be applied to all types of organizations, presenting their comprehensive analysis so that those who go to organizations from different angles can drive knowledge. System approach suffers from two limitations: -

1.     Abstract approach

It is often suggested that system approach is too abstract to be of much use of practicing managers. It merely indicates that various parts of the organization are interrelated

Similarly, an organization is a social system and therefore, is a related with other organization in the society.  This is true and significant for managing.

But it fails to spell out precisely relationship among these.  Therefore its contribution to managing is limited e.g. it is one thing to say that economic forces trigger social, technical and physiological changes in the organization.  But this is not enough for managing an organization.

What is required is a statement of what economic forces initiate what social technological and psychological changes.

2.     Lack of universality

System approach of management lack universality and its precepts cannot be applied to all organizations.

e.g. system approach provides modern structural forms, cybernetic system  for control and communication. These systems are suitable for large and complex organizations but are not suitable for small organizations.

 Since most modern organizations are large and complex, it is argued that systems approach is applicable in general.  This may be true but the role of a theory is not to prescribe actions for a particular category of organization, rather the theory should specify the relationships among different variables which can be applied to all organizations.

If systems approach is seen in this perspective, some people believe that the approach is as incomplete as any other. Infarct they argue that this approach does not offer anything new.

The managers have been doing their jobs seeing the problems as a network of interrelated elements with the interaction between environments inside and outside of their organizations.

Looking into these short comings of systems approach, researchers have tried to modify the systems approach. This attempt has led to the emergency of a separate though related approach, contingency or situational approach.

CONTINGENCY OR SITUATIONAL APPROACH

Contingency or situational approach is an extension of systems approach.  The basic idea of contingency approach is that there cannot be a particular management action which will be suitable for all situations rather than appropriate action is one which is designed on the basis of external environment and internal states and needs.

Contingency theorists suggest that systems approach does not adequately spell out the precise relationship between organization and its environment.

Contingency approach tries to fill this gape by suggesting what should be done in response to an event in the environment.

Some researchers distinguish between contingency and situational approach by suggesting that situational management implies that what a manager does depends on a given situation.

Contingency approach, on the other hand suggests an active interrelationship between the variables in a situation and the managerial actions devised.  Thus, contingency approach takes into account in a given situations and the influence of given solutions on behaviour patterns of an organization.

Despite these differences and emphasis on varying factors, themes of both the approaches are common

In fact, some authors believe the term contingency is misleading and they should have used the term situational. Nevertheless both terms are used interchangeably Jay (1970).

Jay A, Lorsch and Paul R. Lawrence, studies in organization design, Homewood III 1970

FEATURES OF CONTINGENCY APPROACHES

1.     Management action is contingency on certain action outside the system of subsystem as the case may be.

2.     Organizational action should be based on the behavior of action outside the system so that organization should be integrated with the environment.

3.     Because of the specific organization environment relationship, no action can be universal, it varies from situation to situation

IMPLICATION OF CONTINGENCY APPROACH

Contingency approach is an important addition to the paradigm of modern theory of management.

It is the sophisticated approach to understand the increasing complexity  of organization it emphasizes the multivariate nature of organization and attempts to understand how organization operate under varying conditions.

The major implications of contingency approach are as follows: -

1.     Management is entirely situational and there is nothing like universal principles of management or one best way of doing a particular thing. What managers do depends on the circumstances and environment

2.     The approach suggest suitable alternative for those managerial actions which are generally contingent upon external and internal environment such external and internal environment such as organizational design, strategy formulation decision systems, influence system leadership and organizational improvements.

In all these cases, actions alternatives cannot be arranged in advance but have to be identified and adjust according the situations in which decisions in respect of these have to be made.

3.     Contingency approach suggests that since organization interacts with its environment, neither the organization nor any of its subsystems is free to take absolute action.  Rather, it has to modify and adjust the actions subject to various forces like social, political, technical and economic.

Besides, the actions should be according to the needs of internal state of the organization or its subsystem. Thus, the basic problem of managing is to alike the internal state with the external state.

LIMITATIONS OF CONTINGENCY APPROACH

Inspite of the various contributions, contingency has not been acknowledged as a unified theory management because it suffers from some limitations.  These limitations are as follows: -

1. Inadequate literature

Contingency approach suffers from inadequately literature.  Therefore it has not adequately spelled out various types of actions which can be taken under different situations.

It is not sufficient to say that “managerial action depends on the situations.  The approach should provide “if this is the situation, this action can be taken” unless this is done, the approach cannot offer much assistance to the practice of management.

2. Complex

The suggestion of the approach is very simple; i.e. managers should so according to the needs of the situation.  However, when put into practice, this becomes very complex.

Determination of situational in which managerial action is to be taken involves analysis of a large numbers of variables within multifarious dimensions, therefore, there is a possibility that managers, who are always short time may ignore the thorough analysis of all these variables and may resort to short-cut and easier way.

5. Difficult Empirical Testing

Contingency approach, being complex presents problems in testing the precepts of the theory.  For empirical testing of a theory, it is necessity that some methodology is available, no doubt, methodology is available but because of the involvement of too many factors, testing becomes difficult. E.g. contingency theory suggests that greater the degree of congruence between various parts of organizational component, the more effective will be organizational behavior at various levels.  This lacks the empirical validity and hence cannot be adapted to managerial actions.

4. Reactive and not proactive

Contingency approach is basically reactive in nature.  It merely suggests what managers can do in a given situation.  For a given organization, supra system constitutes environment and management can be applied to supra system also. Therefore mangers are responsible to manage the environment in such a way that they avoid the undesirable aspects of environment.

Since the managers are quite powerful in the society, they must be in position to provide a sense of direction and guidance through innovative and creative efforts especially in coping with the environmental changes.

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