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An introduction to the concept of management, tracing its history, and identifying key contributions from important management thinkers. It highlights the interdisciplinary nature of management and its connection to various social sciences. Topics include scientific management, human relations movement, and the role of management in social welfare.
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Objectives:
The objectives of the course are to familiarize the participants with the behavioural patterns of human beings at individual and group levels in the context of an Organization.
Unit I
Orgnanizational Behavior – Definition, Need for studying Organizational Behavior, Disciplines involved in the study of Organizational Behavior, -Contributing disciplines and area like psychology, social psychology, economics, anthropology etc. Application of Organizational Behavior in Business.
Unit II
Individual behaviour – personality, perception, learning, attitudes inter-personal behaviour
Unit III
Group Dynamics – Formal and Informal Group, Group Norms, Group Cohesiveness, Group Behaviour and Group Decision – making.
Unit IV
Motivation and morale, leadership-nature, styles and approaches, development of leadership including laboratory training. Power and Authority – Definition of Power – Types of Power.
Unit V
Management of change-conflict Management- Organisation Health, Development and Effectiveness. Management of culture, Cross Cultural Management.
Recommended Text books
Suggested Readings:
1.3.1 Definition of Management
There were four blind men. They wanted to see an elephant. The first man described elephant was like a pillar, second man as rope, the thirdman as wall and the last man as a fan. Similarly, there was no single definition of Management. To have an understanding, three important definitions are discussed below:
“Management may be defined as the art of securing maximum results with a minimum of effort so as to secure maximum prosperity and happiness for both employer and employee and give the public the best possible service”. -JOHN.E.MEE
“Management is the art of getting things done through and with people in formally organised groups. It is the art of creating the environment in which people can perform as individuals yet cooperate towards attainment of group goals. It is the art of removing blocks to such performance, a way of optimising efficiency to reach goals.” -HAROLD KOONTZ
“Management is a distinct process consisting of planning, organising, actuating, and controlling performed to determine and accomplish the objectives by the use of people and resources.” -GEORGE. R. TERRY
1.31 Features of Management:
You have gone through three popular definitions of Management. Each definition has its own emphasis. Based on them, we can narrate the following features of Management:
Check Your Progress:
1.40 Pioneers of Early Management Thinkers
After understanding the concept of Management, let us trace the history of Management. You see management has been practised in some form or other since the dawn of civilization. The Egyptian pyramids, the Great Wall of China, Qutab Minar in Delhi, the Taj mahal in Agra, the Stupas or Sanchi, the Jain temple at Mount Abu the Archaological findings of Mohanjodara all clearly indicate that organizations and ideas about how to manage them have been around since antiquity. In this section, we would come across the pioneer thinkers of management, who provided solid mettle for constructing the sophisticated and elegant buildings of management. Their contributions are explained below:
1.41 Frederick Winslow Taylor (1856 –1915):
F.W. Taylor was born in 1856 in Philadelphia, U.S.A. Taylor was a chief engineer in the Midvale Steel Works where he started his career as an apprentice. He carried out many experiments to find out the best way to work, over a period of more than two decades. One of his experiments led to the discovery of high speed steel which made him popular. He became disgusted with the existing monotonous methods of working. Soon he realised that there was a lot of waste of material, resulting in loss of production and efficiency. As a solution to these problems, he wanted to apply scientific reasoning to management. After leaving Midvale Steel works, Taylor joined the Bethleham Steel Company where he experimented with his ideas. He discussed his thoughts of management in a paper, ‘A Piece Rate System and shop Management’, before the American Society of Mechanical Engineers. Moreover, Taylor’s publications like ‘Shop Management’ and ‘Principles of Scientific Management’ have received wide public attention and reading.
Frederick W. Taylor rested his philosophy on four basic principles:
Criticism of Scientific Management Taylor’s scientific management was criticized by the workers, managers, psychologists and the public at large. The various grounds of criticism are as follows:
1.42 Henri Fayol (1841-1925) Henri Fayol, a French contemporary of Taylor started his career as a coal mine engineer in the French coal mine company in 1860. He was its Managing Director from 1888to 1918. During this period, he took the company to great heights from the verge of bankruptcy. As a Managing Director he came to the conclusion that there was only a singly administrative science applicable to all types of organisations. Because of his emphasis on universality of administrative science or management principles, he is known as the ‘Universalist’. Fayol’s contributions are generally termed operational management or administrative management. They were first published in the book form under the title Administration industrielle te generale (General and Industrial Management.) in French, in 1916. However, his contributions did not become famous until 1949 when the English translation of his book became widely available.
Fayol divided all activities of industrial enterprises into six groups.
They are as follows:
Henri Fayol’s Principles of Management Henri Fayol has suggested fourteen principles of management for running the business efficiently. According to him, “there is nothing rigid or absolute in management affairs; it is all a question of proportion”. Thus these principles are flexible and capable of adaptation. They are as follows:
1. Division of work. It refers to the division of work among various individuals in the organisation to bring about specialization in every activity. Specialisation tends to increase efficiency and helps to avoid waste of time and effort caused by changes from one work to another. 2. Authority and responsibility. Authority is the power to give orders to the subordinates. Responsibility means the duty, which the subordinates are expected to perform. Fayol suggested that authority and responsibility should go hand in-hand. Authority without responsibility promotes irresponsible behaviour on the part of management. Similarly, responsibility without authority makes management ineffective. Thus there should be parity between authority and responsibility. 3.Discipline. Discipline is highly essential for the smooth running of the organisation. It means obedience to rules and regulations of the organisation. Maintenance of discipline in the organisation depends upon the quality of leadership, clear and fair agreements etc. 4. Unity of Command. An employee should receive orders from one superior only for any action or activity. This principle is necessary to avoid confusion and conflict. Besides, when there is unity of command, it is easy to fix responsibility for mistakes. Fayol stated that if this principle is violated, authority will be undermined, discipline will be in jeopardy, order will be disturbed and stability will be threatened. 5. Unity of direction. The principle of unity of direction states that for a group of activity having the same objective, there should be one head and one plan. It alone can produce a sense of loyalty and devotion among the subordinates. Fayol observed that, unity of direction must not be confused with the unity of command. Unity of direction is provided for by a sound organisation of the body corporate. Unity of command pertains to the functioning of the personnel. Unity of command cannot exist without unity of direction, but it does not follow from it. 6. Subordination of individual interest to general interest. This principle calls for the reconciliation of objectives of individuals with those of the organisation. Organisation is superior to individuals. When the individual and the organisational interests conflict, the latter must prevail. 7. Remuneration of personnel. The remuneration of the employees should be fair and just. Employees who are paid decent wages will have a high morale. 8. Centralisation. Centralisation refers to the concentration of authority at one level in the organisation. On the other hand, decentralization is the dispersal of authority to the lower levels in the organisation. The degree of centralization may be different in various organisations. But a balance should be maintained between centralization and decentralization to ensure the best results. 9. Scalar chain. Scalar chain refers to the chain of superiors ranging from the final authority to the lowest level in the concern. It is otherwise, regarded as a chain of command because orders or instructions issued at higher levels flow through intermediate managers before reaching lower levels, Scalar chain states superior-subordinate relationship throughout the concern. It is highly essential to ensure unity of command and effective communication in the organisation. But it is subject to certain limitations. They are:
Weber believed that his model could remove the ambiguity, inefficiencies, and patronage that characterized most organisations at that time. Weber’s bureaucracy is not as popular as it was a decade ago, but many of its components are still inherent in large organisations.
His theory of bureaucratic management stressed the need for a strictly defined hierarchy governed by clearly defined regulations and lines of authority. He considered the ideal organisation to be a bureaucracy and its activities and objectives were rationally thought out and its divisions of labour were explicitly spelled out. Weber also believed that technical competence should be emphasized and that performance evaluation should be made entirely on the basis of merit.
1.44 Mary Parker Follett (1868-1933)
Mary Parker Follett was among those who built on the basic framework of the classical school. However, she introduced many new elements, especially in the area of human relations and organisational structure. In this, she initiated trends that would be further developed by the emerging behavioural and management science schools.
Follett was convinced that no one could become a whole person except as a member of a group; human beings grew through their relationships with others in organisations. In fact, she called management “the art of getting thing done through people.” She took for granted Taylor’s assertion that labor and management shared a common purpose as members of the same organisation, but she believed that the artificial distinction between managers (order givers) and subordinates (order takers) obscured this natural partnership. She was a great believer in the power of the group, where individuals could combine their diverse talents into something bigger. Moreover, Follett’s holistic model of control took into account not just individuals and group, but the effects of such environmental factors as politics, economics, and biology.
Follett’s model was an important forerunner of the idea that management meant more than just what was happening inside a particular organisation. By explicitly adding the organisational environment to her theory, Follett paved the way for management theory to include a broader set of relationships, some inside the organisation and some across the organisation’s borders. A diverse set of modern management theories pay homage to Follett on this point.
She strongly believed that management and labour share a common purpose as members of the same organisation. She also believed that participative style of management could increase cohesiveness, sense of belonging and creativity. She advocated ‘Behavioural approach in management’.
Check your Progress
Match the following with the respective statements given: A. Taylorism B. 14 Principles C. Bureaucracy D. Management
1. Application of science at the factory level of Management 2. They are applied in effecting a sound organization structure 3. It is characterized by division of labour, clearly defined hierarchy and impersonal relationship.
1.45 Elton Mayo and the Hawthorne Experiments 1924 - 1933
The Hawthorne Experiments conducted by Elton Mayo and his associates at the Western Electric Company provided new insights into the human behaviour. Many of the experiments were performed at the Western Electric’s Hawthorne plant near Chicago. Mayo’s findings in these experiments marked the beginning of the Human Relations Era.
The studies attempted to investigate the relationship between the physical conditions at the workplace and the productivity of workers. The researchers divided the employees into two groups. One group called the test group was subjected to changes in lighting. The lighting condition for the other group called the control group remained constant throughout the study. When the test group’s lighting conditions were improved, productivity increased as expected. What surprised the researchers most was the fact that productivity continued to increase even when the lighting was reduced. Further, to add to the mystery, the control group’s output also increased as the test group’s lighting conditions were changed, though there was no change in the lighting conditions for the control group. As a result, for the first time, it was realized that something in addition to lighting was influencing the worker’s performance.
In another set of experiments, the changes, in the performance of a group of workers were observed by changing the various work related factors such as; Increasing the wages; Introducing rest periods; and Reducing the workdays and workweek; Workers were also allowed to choose their own rest periods and to have a say in all these changes. These experiments revealed that financial incentives alone were not causing the productivity improvements. It was found that a complex set of attitudes were responsible for the productivity increase. Employers develop group norms at the work place. The test and the control groups developed some group understanding that motivated them to perform well. The fact that employees would work hard if they were convinced that supervisors pay special attention to their welfare was also made abundantly clear. This is often referred as the Hawthorne Effect.
Another conclusion of the studies was that informal work groups exist in the work place. The informal groups help the individuals share common values, understanding and beliefs. These informal groups exert significant influence on the employees. It is our common knowledge that many a time we find in the organisations how employees associations and friendships with co- workers influence their attitude towards the work and the superiors.
The contribution of the Human Relations movement is quite significant in that the individual and the impact of his association with a group had received due attention. Employee productivity was viewed as a function of the human relations at work rather than an engineering problem. Elton Mayo’s studies in fact, contributed to a thorough change in the attitude and approach towards training.
1.46 Chester I. Barnard (1886-1961)
Chester Barnard, like Follett, introduced elements to classical theory to be further developed in later schools. Barnard, who became president of New Jersey Bell in 1927, used his work experience and his extensive readings in sociology and philosophy to formulate theories about organisations. According to Barnard, people come together in formal organisations to achieve ends they cannot accomplish working alone. But as they pursue the organisation’s goals, they must also
1.47 Herbert A. Simon (1916-1978)
Herbert Simon is an eminent American social scientist. Born in 1916, he was awarded the Nobel Prize in Economics in 1978, in recognition of his outstanding contribution in analysing the Decision-Making Process. He goes to the extent of equating decision-making with management. He laid emphasis on how decisions are made and how they can be made effectively.
In his writings on decision-making, he maintained that to be scientific, one must exclude value judgements and concentrate on facts, apply rigorous analysis and test factual statements. Simon viewed an organisation as a structure of decision – makers. The missing factor, according him, is correct decision-making. He argued that optimum rational choice between alternative courses of action is rarely made.
Simon divides the decision – making process into three phases, namely, intelligence activity: This involves finding occasions calling for decision. The manager analyses the environment and identifies conditions that need action ; design activity: Identifying, developing and analyzing all possible alternative courses of action are the important tasks in this stage. choice activity: Finally, the manager selects one of the alternative sources of action available to him. According to Simon, every decision consists of a logical combination of facts and value propositions. He argues that complete rationality in decision-making is not always possible. He disputes the concept of total rationality in administrative behaviour. Human behaviour is neither totally rational non totally non-rational. It involves, “bounded rationality”. ‘Bounded rationality’ and ‘satisfying’ are the two important terms used by him to drive home the point further. ‘Satisfaction’’ involves the choice of an action which is satisfactory or fairly satisfactory.
Simon argues that managers do not aim at maximum satisfaction or result from a decision but are satisfied with reasonably good enough outcome or result. It is because of the limitations involved in identifying the alternatives, collecting all the facts and data, knowing the values of all alternatives.
Though some of Simon’s views on decision-making are widely acclaimed, his critics point out that social, political, economic and cultural factors did not get due attention. His theory is criticized as being extremely general and does not provide the details to guide the managers in decision-making. Inspite of some imperfections, Simon’s contribution is undoubtedly a major breakthrough in the decision-making behaviour of managers.
1.48 Rensis Likert (1903-1972)
Resins Likert is an American social psychologist born in 1903. Likert and his associates carried out extensive research on management practices in a wide variety of situations like industrial units, railways, hospitals, schools and voluntary organisations and covered unskilled workers in factories to top scientists in research laboratories. He believed that the body of knowledge of social sciences can pave the way to frame a generalised theory of organisation and management. His findings provided deep insights into supervision, general management systems and dynamics of interpersonal relationships.
Likert classified supervisors into two categories: job centred and employee centred: the primary concern of the first category of supervisors is to ensure performance of assigned tasks and maintenance of prescribed standards. On the other hand supervisors in the second category are primarily concerned with the human aspects of their subordinates and effective team- building for high task performance.
It is argued that high performing managers are humane to their subordinates, and low performing managers are compelled to get tough with their subordinates to achieve better results. To resolve this dilemma, Likert and his colleagues conducted a series of experiments in which high and low performing managers were changed into each other’s jobs. While high performing managers succeeded in improving the performance of low production units, low performing managers placed in high production units brought down their output over a span of time.
Management Systems
The most important contribution of Likert is his conceptualisation of different systems of management along a continuum. He identifies four distinct points along the continuum for purpose of illustration of the characteristic of each of the management systems. He labels them as under.
The operating characteristics include leadership, motivation, communication, interaction influence, decision-making and goal-operating characteristic and are juxtaposed over the four types of management systems.
Likert points out that authoritarian-exploitative management system displays a steep hierarchical structure and a centralised decision-making and results in top-down communication, tight supervision performance under pressure, and low degree of employee motivation. On the other hand, the participative management system displays flat structure, group decision processes, open and authentic three-way communication (up, down and lateral), adaptive supervision, individual and work groups with a high degree of achievement motivation. The other management systems 2 and 3 reveal intermediate combination on forms and processes.
The intermediate forms of management systems 2 and 3 will reveal transitory characteristics of progression from management system from 1 to 4 over a period. In system- 2 management orientation is still authoritative, but becomes less exploitative and more benevolent towards the members of the organisation. In system- 3 exercise of authority is more broad-based with delegation of powers to middle levels and consultation of affected interests at lower levels. To the extent motivation, communication and involvement of subordinates replace reliance on exercise of formal authority, consultative management systems will be well set to move forward to the management sytem-4.
A staunch supporter of job enrichment, Argyris believes that each person already has the ‘psychological energy’ that provides motivation. The challenge, he suggests, is not to find ways of artificially motivating people; it is to recognize and channelize this innate energy.
T-groups. Chris Argyris was the main force behind the ground-breaking T-group experiments in the 1960s. ‘T-group training’ is a phrase used to describe a number of similar training methods, the purpose of which is to increase the trainee’s skills in working with other people – and a considerable proportion of time on such a training course is spent in discussing the trainees’ relationships with one another.
Check your Progress Match the following
1.51 Modern Management thinkers As you know, the twentieth century has witnessed a few more thinkers on management. Their contribution has made the management more advanced. They are Peter F. Drucker, Michel E. Porter, Tom Peters, Gary Hamel, H. Igor Ansoff and Henri Minzberg. Let us see the contributions of these management thinkers.
1.52 Peter F. Drucker Drucker is a highly respected management thinker; He is a prolific writer and has published several books and articles on the management practices. He is so versatile that there is hardly area in management, which is not touched by him. He has drawn heavily from his consultancy experience spread over the last four to five decades. Drucker perhaps is the only management thinker who is admired by even the socialist block countries also. His views on management may be summarized as follows:
1. Management as a practice: According to Drucker management has two important functions, namely, i) Innovation and ii) Marketing. He has treated management as a discipline as well as a profession. For him, management is more a practice. It is always goal oriented. His comment on the purpose of business as the creation of customer, if understood and in the right way helps any organisation to achieve success.
Drucker’s views on innovation are equally important for the emphasis they place on new product development. He argues that ‘new products should drive out existing products’ rather than the other way round. As such, he is against bureaucratic management for it stifles the innovative spirit and the initiative among the people in the organisation. He contends that modern organisations are knowledge based organisations and describes the modern workers as ‘knowledge workers’ considering their skills, and innovative abilities.
2. Functions of management; Drucker points out three basic functions of management. The actions of management should contribute to the achievement of purpose and mission of the institution; make the work productive and the worker achieving, and effective management of social responsibilities.
3. Objective setting; Drucker has attached great importance to objective setting. He has specified that objectives should be set for all the key result areas of business. To make the objective setting and their achievement more meaningful, he has given a new tool, what is popularly known as Management by Objectives.
MBO is regarded as one of his most important contributions to the discipline of management. He has discussed the concept in great detail in his book, the practice of management
1.53 Michael E. Porter Michael E. Porter is an authority on competitive strategy and competitive advantage. He has written sixteen books and more than one hundred research papers. ‘Competitive Strategy’ (1980), ‘Cases in Competitive Strategy’ (1982), ‘Competitive Advantage: Creating and Sustaining Superior Performance’ (1985). The important contributions of Michael Porter are given below: Five Forces Analysis Porter has developed a model describing the forces which shape competition in an industry. This model is as follows:
1. Threats of Entry: New entrants to an industry bring new capacity, and attempt to gain market share. When barriers to entry are high and a new entrant can expect sharp retaliation from the existing players, the threat of entry will not be high. There are six sources of barriers to entry namely economies, product differentiation, capital, cost advantage, access to channels and govt. policy. 2. Bargaining Power of Customers: When customer group is powerful, then it may be buyers’ market. Powerful customers can shape product quality, prices distribution channels, etc. Bargaining power of customers is high in various circumstances:
Anyone can be a strategy activist – People who care about their organization do not wait for permission to act. Perspective is worth 50 IQ points – subversive strategy means gaining a new perspective on the world, and looking at potential markets through new eyes. Top-down and bottom-up are not alternatives – if top-down can achieve unity of purpose among the few involved, bottom-up bring diversity of perspective. Bring the two together. You can’t see the end from the beginning – Surprises do not appeal to everyone, but delving into discontinuities and identifying potential competencies will bring about unpredictable outcomes. These will probably not fit the orthodox strategic mould – but strategy making is about letting go. Creating Strategy: Hamel turns his revolutionary principles into action points, and urges organizations to adopt a new stance through: New voices – Top management relinquishing its hold on strategy and introducing newcomers; young people and people from different groups bring richness and diversity to strategy formulation. New conversations – The same people discussing the same issues over and over again leads to sterility; new opportunities arise from juxtaposing formerly isolated people. New passions – People will go for change when they can steer it and benefit from it. New perspectives – Search for new ways of looking at markets, customers, and organizational capabilities; think different, see different. Professor Gary Hamel is one of the most respected contributors to the debate on strategy of the late 20th^ century. His fresh and often hard-hitting approach to organizational innovation has brought wide acknowledgment from academics and practitioners alike.
1.56 H. Igor Ansoff: Ansoff wrote several books out of which ‘Corporate Strategy’ became most popular. Ansoff identified four standard types of organizational decisions as related to strategy, policy, programmes, and standard operating procedures. The last three of these, he argued, are designed to resolve recurring problems or issues and, once formulated, do not require an original decision each time. This means that the decision process can easily be delegated. Strategy decisions are different, however, because they always apply to new situations and so need to be made anew every time.
Ansoff developed a new classification of decision-making, partially based on Alfred Chandler’s work, Strategy and Structure (Cambridge, Massachusetts: MIT Press, 1962). Decisions are: strategic (focused on the areas of products and markets); administrative (organizational and resource allocating); or operating (budgeting and directly managing). Ansoff’s decision classification became known as Strategy-Structure-Systems, or the 3S model.
1.57: Henry Mintzberg and Managerial Roles In the late 1960s, Henry Mintzberg found that the managers engaged in a large number of varied, unattended and short-term acuities. He also provided a categorization scheme for defining the manager’s job. These are commonly known as Mintzberg’s Managerial Roles.
Mintzberg concluded that managers perform 10 different but highly related roles. The term managerial roles refer to specific categories of managerial behaviour. They can be grouped under their specific headings – interpersonal relationships, transfer of information and decision-making.
Mintzberg’s Managerial Roles Roles Description Identifiable Activities Interpersonal Figurehead
Symbolic head: obliged to perform a number of routine duties of a legal or social nature
Greeting visitors: signing legal documents
Leader Responsible for the motivation and activation of employees: responsible for staffing, training, and associated duties.
Performing virtually all activities that involve employees
Liaison Maintains self-developed network of outside contacts and informers who provide favours and information
Acknowledging mail: doing external board work: performing other activities that involve outsiders Informational Monitor
Seeks and receives wide variety of special information (much of it current) to develop thorough understanding of organisation and environment: emerges as nerve center of internal and external information about the organisation
Reading periodicals and reports: maintaining personal contacts
Disseminator Transmits information received from other employees to members of the organisation- some information is factual, some involves interpretation and integration influencers
Holding informational meetings: making phone calls to relay information
Spokesperson Transmits of diverse value positions of organisational information to outsiders on organisation plans, policies, actions, result, etc.: serves as expert on organisation’s industry
Holding board meeting giving information to the media
Decisional Entrepreneur
Searches organisation and its environment for opportunities and initiates improvement projects to bring about change: supervises design of certain projects as well
Organizing strategy and review sessions to develop new programs
Disturbance handler Responsible for corrective action when organisation faces important disturbances.
Organizing strategy and review sessions that involve disturbances and crises Resource allocator Responsible for the allocation of organisational resources of all kinds- in effect, the making or approval of all significant organisational decisions
Scheduling: requesting authorization: performing any activity that involves budgeting and the programming if employees work Negotiator Responsible for representing the organisation at major negotiations
Participating in union contract negotiations or in those with suppliers Check your Progress Answer the following:
1. “There is only valid definition of business purpose, to create a customer” – who said it? 2. Who introduced Management by objectives as a tool of Management? 3. Competitors, Potential entrants, buyers, substitutes and suppliers are the fire forces of an industry – who introduced this? 4. Who has developed Mckinsey 7-S Model to produce excellence? 5. Who highlighted ten related roles to be played by a Manager?
