MPOB

Lecture - 1

By Dr. Manju Tyagi

SYLLABUS

By Dr. Manju Tyagi

SYLLABUS

By Dr. Manju Tyagi

 Reference Book
1. Robbins.. Fundamentals of Management: Essentials Concepts and
Applications, Pearson Education.
2. Luthans, Fred, Organizational Behavior, McGraw Hill Education.

By Dr. Manju Tyagi

 MANAGEMENT
➢ Simply speaking, management is what managers do.
➢ Management is the process of getting things done, effectively and
efficiently, with and through other people.

By Dr. Manju Tyagi

ORGANISATION

By Dr. Manju Tyagi

By Dr. Manju Tyagi
 DEFINITIONS OF MANAGEMENT

▪ As per Mary Parker Follet:” The art of getting things done through
others.”

▪ As per George R. Terry: ”Management is a process of planning,

organizing, actuating and controlling performed to determine and
accomplish the objectives by use of people and resources.

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 DEFINITION OF MANAGEMENT PROCESS
• Production or efficiency oriented
• Decision-oriented
• People-oriented
• Function-oriented

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 PRODUCTION ORIENTED
According to F.W.Taylor:
“management is the art of knowing what you want to do and then
seeing that it is done in the best and chepest way.”

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 DECISION ORIENTED
• Management is simply the control over the action of human beings
for the expressed purpose of attaining pre-determined goals.

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 PEOPLE ORIENTED
• Lawrence define management as a “management is the
accomplishment of result through the efforts of other people.”

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 FUNCTION ORIENTED
• According to Henry Fayol “ to manage is to forecast and to plan, to
organize, to coordinate and to control.”

By Dr. Manju Tyagi

NEED OF MANAGEMENT

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 FUNCTION OF MANAGEMENT
The most well accepted framework for understanding management is to
break down the management functions into its constituent processes:
1. PLANNING
2. ORGANISING
3. STAFFING
4. LEADING/DIRECTING
5. CONTROLLING

• Management is referred to as a process to emphasize that ALL managers

engage in certain INTER-RELATED activities in order to achieve the desired
goal.

By Dr. Manju Tyagi

PLANNING :

It is the function that determines the future course of action. It involves:

• Setting missions, goals and objectives.
• Formulating the strategy to achieve the above.
• Answering the 5W’s ( Who, What, Where, Why, When) and 2H’s (how and
how much)in a general way for all the units and the sub units of the
organization.
• Allocating resources-human, physical and monetary.
• Planning exercise to be done at all levels.
• The time horizon for planning to be on long term, medium term as well as
on short term basis

By Dr. Manju Tyagi

ORGANIZING:

Organizing a business requires providing it with all the necessary inputs

at the place and at the time they are required.
• Based on the requirement of the plan, design the structure.
• The structure results from:
- identifying individual roles,
- grouping of work,
- integrating the total effort and
- establishing relationships.
• Organizational structure creates an environment for human
performance.

By Dr. Manju Tyagi

STAFFING:

Staffing is a perpetual function requiring managers to find the ‘right person

for the right job.' This is a dynamic situation since people are continually
leaving, getting fired, dying, promoted and transferred. Building of human
organization involves:
• Identifying work force requirement.
• Inventorying available people.
• Selecting and recruiting new people.
• Planning careers of workforce.
• Training and developing the current incumbent and his/her successor to
enable them to perform their tasks efficiently and effectively.
• Appraising and promoting.
• Setting compensation.

By Dr. Manju Tyagi

LEADING/DIRECTING:

Leading predominantly deals with interpersonal aspects of managing. Most

important opportunities as well as problems for managers arise from
people. effective managers also need to be effective leaders. leading
involves:
• Communication- it has to be a two - way traffic.
• Leadership- it is the process of guiding and influencing the work of
subordinates.
• Motivation- it arouses the desire in the workers to give their best. It is an
act of inspiring and stimulating.
• Motivation can be financial as well as non-financial.

By Dr. Manju Tyagi

CONTROLLING:

It is ensuring outcomes of actions conform to the adopted plans. This involves:

• Establish standards of performance.
• Compare current performance with standards.
• For any deviation take corrective action to ensure the organizational goals are
met.

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MINTZBERG’S MANAGERIAL FUNCTION

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MINTZBERG’S MANAGERIAL FUNCTION

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Level of Management

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LEVEL OF MANAGEMENT

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EVOLUTION OF MANAGEMENT THOUGHT

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 SCIENTIFIC MANAGEMENT THEORY
• Scientific Management grew out of the need to increase productivity.
• F. W. Taylor is the father of scientific management.
• He is the first person who suggested the use scientific methods to solve
manager problems.
• He advocated a detail scientific study of each job to determine a best way
of doing it.
• He believed that management is a science resting on well organized and
clearly define principles.
• According to F. W. Taylor:
“management is the art of knowing what you want to do and then seeing
that it is done in the best and chepest way.”

By Dr. Manju Tyagi

 PRINCIPAL OF SCIENTIFIC MANAGEMENT
1. Science not rule of thumb
2. Job specialization or division of labour
3. Harmony Not Discord
4. Cooperation, not individualism
5. Scientific selection, training and development of worker

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1. Science not rule of thumb:
• It states that there is only one best method to maximise efficiency.
• This method can be developed through scientific study and analysis of
each element of a job and should substitute ‘Rule of Thumb’. · This
standard method then should be followed throughout the
organisation

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2. Job specialization or division of labour
• Every worker should concentrate on one function, so that he become
a specialist in it.
• Almost equal division of work and responsibility between the
management and the worker.
• Management should take over all work for which they are better
fitted than worker.

By Dr. Manju Tyagi

3. Harmony Not Discord:
• The principle emphasises that there should be complete harmony
between the management and the workers.
• Management should share gains of the company if any with the
workers and workers should work hard and be wiling to embrace
change for the good of the company

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4. Cooperation, not individualism

• There should be complete cooperation between the management

and the workers instead of individualism.
• This principle is an extension of principle of ‘Harmony, Not Discord’.
Competition should be replaced by cooperation.
• According to Taylor, there should be an almost equal division of work
and responsibility between workers and management.

By Dr. Manju Tyagi

5. Scientific selection, training and development of worker:

• This principle is concerned with efficiency of employees which could

be built in right from the process of employee selection.
• The work assigned to employees should suit their capabilities. They
should be given the required training to increase their efficiency.
• Efficient employees would produce more and earn more. This will
ensure their greatest efficiency and prosperity for both the company
and the workers.

By Dr. Manju Tyagi

 TECHNIQUES OF SCIENTIFIC MANAGEMENT
1. Time Study: To set standard time for a specific job.
2. Motion study: To eliminate unnecessary & wasteful movement
3. Scientific task planning:
• each step should be taken in the right place,of the right degree & at the right
time,
• to Perform each operation at the optimum efficiency
4.Fatigue Study:
5.Differential Piece wage system:
• Direct link create b/w productivity & remuneration.
• laid 2 rate:1. low rate for those failing to achieve standard output and high
rate for those achieving standard.

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6.Functional Foremanship:
• One supervisor can’t be expert in all work.
• Suggest 8 supervisor supervise a worker job. 4 Concerned with
planning of work and 4 in the execution of work.

By Dr. Manju Tyagi

 CRITICAL EVALUATION OF SCIENTIFIC MANAGEMENT THEORY

1. Mechanistic Approach:
The main criticism is that scientific management ignores the human element in
production and is devoid of a human touch. It treats worker as factory of
production and not as human beings. Too much emphasis is placed on technical
aspects of work ignoring the human side. Therefore, Taylor and his associates
were ridiculed as "efficiency experts" and "time study analysis".
2. Unrealistic Assumptions:
Scientific management is based on the assumption that people are rational, and
they are motivated by material gains. Taylor and his associates concentrated on
physical and economic needs and over-looked the social and ego needs of
people. Latter experiences has revealed that financial gain is not the only thing
that matters. Workers also want job satisfaction, participation and recognition.

By Dr. Manju Tyagi

3. Narrow View : Scientific management is quite limited in scope. Taylor focused
attention completely on efficiency at the shop floor. As a consequence
management became the study of shop management while the more general
aspects were overlooked. Scientific management has thus been described as a
theory of industrial engineering. It does not deal with management of the total
organization.
4. Impracticable: Many ideas of Taylor are said to be infeasible in practice. For
example, planning cannot fully be separated form doing because these are two
sides of the same job and are not different jobs. Similarly, functional foremanship is
likely to create problems because it violates the principle of unity of command.
5. Exploitation of Labour : In the name of increasing efficiency, workers were
forced to speed up affecting their physical and mental health. Specialisation and
standardization make the jobs dull and monotonous.

By Dr. Manju Tyagi

 ADMINISTRATIVE THEORY
➢Henry Fayol is father of administrative theory.
➢He believes that manager became more concerned with
management of organisation than with improving the efficiency of
individual job.
➢According to Henry Fayol “ to manage is to forecast and to plan, to
organize, to coordinate and to control.”

By Dr. Manju Tyagi

 CLASSIFICATION OF ACTIVITIES

1.Technical ( Manufacturing and production of product.

2. Commercial (Buying, Selling & Exchange)
3. Financial (Search for & optimum utilization of capital)
4. Accounting (recording transaction of business)
5. Security ( protection of person and property)
6. Managerial ( Planning, organizing, commanding, Coordinating,
Controlling)

By Dr. Manju Tyagi

By Dr. Manju Tyagi
 FAYOL MANAGEMENT PRINCIPLES :

1. Division Work: The work of every person in the organization should be limited as
far as possible to the performance of a single leading function. This helps to do
more and better work with the same effort.
2. Authority and Responsibility: Responsibility is a natural consequence of and a
corollary to authority. The two are co-extensive and, therefore, a parity should be
maintained between them. Authority is not to be conceived of part from
responsibility. Wherever authority is exercised responsibility arises.
3. Discipline: It implies respect for rules and agreements designed to secure
obedience. It must prevail throughout an organization to ensure its smooth
functioning. Discipline requires clear and fair agreements, good supervision and
judicious application of penalties
4. Unity of Command: Every employee must receive orders and be accountable to
only one boss. It is necessary to avoid conflicting orders and to ensure order and
stability in the organization. As soon as two supervisors wield their authority over
the same person, uneasiness makes itself felt.

By Dr. Manju Tyagi

5. Unity of Direction: There should be one head and one plan for a group of
activities having the same objective. This is essential to ensure unity and
coordination in the enterprise. Unity of command cannot exist without unity
of direction but does not necessarily flow from it. Unity of command is
concerned with grouping of persons whereas unity of direction relate to
grouping of activities.
6. Subordination of Individual to General Interests: Efforts should be made
to reconcile individual interests with common interests. When there is
conflict between the two, the interests of the organization should prevail
over individual interests. This requires continuous and exemplary supervision
and fair agreements.
7. Remuneration of Personnel: The amount of remuneration and the
methods of payment should be just and fair and should provide maximum
possible satisfaction to both employee and employers.
8. Centralization: According to Fayol, the question of centralization and
decentralization a matter of finding the optimum degree for the particular
concern. It should be determined on the basis of individual circumstances in
each case.
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9. Scalar Chain : Scalar chain refers to the chain of superiors ranging from the ultimate
authority to the lowest level in the organization. To prevent the scalar chain bogging
down action. This gang plank allows two employees to deal directly with each other. But
each must inform his superior of any action taken by him.
10. Order: This principle is concerned with the agreement of things and the placement
of people in material order, there should be a place for everything and everything should
be in its proper place. Similarly in social order, there should be an appointed place for
everyone and everyone should be in his or her appointed place. This kind of order
enquires precise knowledge of human requirements and resources of the concern.so
that a proper balance may be created between them.
II. Equity: Equity implies that employees should be treated with justice and kindness
Manager should be fair and impartial in their dealings with subordinates. They should
adopt a sympathetic and unbiased attitude towards workers. Equity helps to create
cordial relations between management and workers which are essential for the
successful functioning of every enterprise.

By Dr. Manju Tyagi

12. Stability of Tenure of Personnel : Employees cannot work
efficiently unless job security is assured to them. Time is required for
an employee to get used to new work and succeed in doing it well.
Therefore, management must strive to minimize employee turnover.
13. Initiative: Employees at all levels should be given the opportunity
to take initiative and exercise judgement in the formulation and
execution of plans. Initiative refers to the freedom to think for one self
and use discretion in doing work. It develops the interest of employees
in their jobs and provides job satisfaction to them.
14. Esprit de Corps Management should promote a team spirit of unity
and harmony among employees, according to Fayol. Management
should promote teamwork especially in large organisations because
otherwise objectives would be difficult to realise.

By Dr. Manju Tyagi

 CRITICISM

Fayol’s theory has been criticised on the following grounds :

1.Too formal: Fayol’s theory is said to be very formal. However, in any

scientific and analytical study facts and observations have to be
presented in a formal manner.
2.Vague: Some of the concepts have not been properly defined. For
example, the principle of division of work does not tell how the task
should be divided.

By Dr. Manju Tyagi

3. Inconsistency: Principles of administrative theory were based on
personal experience and limited observations. There is too much
generalisations and lack empirical evidence. They have not been
verified under controlled scientific conditions.
4. Pro-management Bias: Administrative theory does not pay adequate
attention to workers. Workers are treated as biological machines or
inert instruments in the work process.
5. Historical value: Fayol’s theory was relevant when organisations
operated in a stable and predictable environment. It seems less
appropriate in the turbulent environment of today.

By Dr. Manju Tyagi

By Dr. Manju Tyagi
Difference between Fayol & Taylor

By Dr. Manju Tyagi

 NEO-CLASSICAL OR BEHAVIOURAL APROACH

• The Neo-Classical Theory is the extended version of the classical theory

wherein the behavioral sciences gets included into the management.
• According to this theory, the organization is the social system, and its
performance does get affected by the human actions.
• the researchers tried to identify the reasons for human behavior at work.
This led to the formation of a Neo-Classical theory which primarily focused
on the human beings in the organization. This approach is often referred to
as “behavioral theory of organization” or “human relations” approach in
organizations.
This theory analyzed in three parts:
• Hawthorne Experiments
• Human Relation Movement
• Behavioural science Thinking
By Dr. Manju Tyagi
• George Elton Mayo is considered the father of neo-classical approach.
• He was the leader of the team which conducted the famous
Hawthorne Experiment.
• Hawthorne Experiment conducted during 1924-32 at a plant of the
Western Electric Company (near Chicago in USA)

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 BRIEF DESCRIPTION OF HAWTHORNE EXPERIMENT

1. ILLUMINATION EXPERIMENT:
The object of this experiment was to assess the effect of illumination
on employees output. Two groups were selected from among the
employees. One group was placed in the room where lighting remained
constant. The other group was placed in another room where lighting
varied periodically, Surprisingly, the output of both the groups
increased steadily. It was concluded that lighting was a minor factor
and there were other more important factors influencing the output. At
this stage, Mayo and his team was invited to conduct further studies.

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2. Relay Assembly Test Room Studies:
These studies were conducted in three different groups. The test group
consisted of six female workers. Frequent changes were made in
working conditions such as shorter working hours, rest periods, friendly
and informal supervisors, free interaction among members of the
group, etc. Productivity of the group increased even when the
improvements in working conditions were withdrawn It was concluded
that socio-psychological factors, e.g. special attention, recognition,
sense of group pride and belonging exercise a greater influence on
productivity than working conditions.

By Dr. Manju Tyagi

3. Mass Interview Programme:
A large number of workers were interviewed to judge their attitudes
and opinions on the factors influencing productivity. It was found that
the opportunity to talk freely about things that are important to
workers had a positive effect on their morale and productivity.
4. Bank Wiring Observation Room Study:
In this experiment, a group of fourteen workers was put under close
observation. The pay of every member was made dependent on the
performance of the group as a whole. It was found that the group had
its own norms of performance and various forms of social pressure
were to enforce these norms. As a result output could not increase
despite group incentive scheme.

By Dr. Manju Tyagi

 THE MAIN CONCLUSIONS (CONTRIBUTIONS) OF
HAWTHORNE EXPERIMENTS

(1) A work group is not merely a techno-economic unit. It is also a

social system with a culture of its own.
(2) Workers are not merely rational economic beings motivated simply
by money. They are also socio-psychological beings and respond to the
total work situation.
(3) Social and psychological factors exercise a greater influence on
employee behaviour and performance than physical conditions of
work.

By Dr. Manju Tyagi

(4) Workers act or react not as individuals but as members of a group.
The informal group have their own norms and beliefs. These groups
and their leader exercise an overriding influence on the attitudes,
behaviour and performance of individual employees.
(5) Workers respond to the total work situation. Their behaviour and
performance are conditioned by factors inside and outside the work
place.

By Dr. Manju Tyagi

The human relations school is based on the following ideas:
1. The Individual: According to the human relations school, each person is unique. He bring
certain attitudes, beliefs, values, skills, etc. to the job situation. Therefore, an individual is
motivated by not only economic factors but by several social and psychological factors.
2. The Work Group: Work is a social experience and most workers find satisfaction in social or
informal groups. The norms of such groups determine to a great extent the attitudes and
performance of workers. Therefore, managers should maintain good inter-personal and inter-
group relations to maximize productivity.
3. The Leader: As the leader of a work group, a supervisor/manager should provide a pleasant
work climate wherein employees are allowed to have a say in the decision-making process. He
can gain respect and obedience by adjusting to various personalities and situations.
4. The Work Environment: A positive work environment enables employees to satisfy their
needs as well as to achieve organizational goals. Positive work environment consists of clearly
defined goals, performance linked rewards, feedback on performance, participate decision-
making, interesting and growth oriented work, open communications, etc.

By Dr. Manju Tyagi

Contributions of Human Relations Approach

(1) Human relations school has a moral justification. Employees are human beings and they
entitled to be treated with respect and dignity.
(ii) Human relations approach helps to satisfy the social and psychological needs of employees.
Such satisfaction is likely to improve productivity and reduce costs. Sound human relation can
result in the optimum utilization of resources.
(iii) Human relations school highlights the peopleside' of organizations. It therefore, avoid the
imbalance caused by over-emphasis on technical and administrative.
(iv) A true concern for workers would yield rich dividends
(v) Human relations school focuses attention on inter-personal relations and dynamics of work
groups.
(vi) It revolutionized management training by stressing people management skills and
managerial styles.

By Dr. Manju Tyagi

CRITICISM OF HUMAN RELATION APPROACH

1. Unscientific : Critics have questioned the scientific validity of the human

relations approach. Hawthorne experiments on which the approach is based suffer
from a clinical bias as they discounted theory. A group of American workers is not
representative of the total workforce. Experimental groups cannot be equated with
the work groups.
2. Anti-individualistic: Human relations approach advocates a highly indulgent
approach towards people which amounts to their manipulation. It replaces the
control of the boss by the control of the group forcing the individual to sacrifice his
personal values to group norms. Group membership may not be a rewarding
experience for all members. Groups may not distribute satisfactions to the
members. Autocrats may manipulate the groups for their own selfish goals.

By Dr. Manju Tyagi

3. Shortsighted: Human relations approach is based on over-liberal assumptions
about people. It softpedals the requirements of organizations and management
and neglects the real issues of the work situation. Inter-personal relations are
considered as an end in itself and very little attempt is made to really understand
human behaviour at work. Human relations approach stresses the social and
psychological aspects at the cost of technical and economic aspects of work.
4. Over-concern with happiness: The assumption is that happy workers are
productive workers. But research has revealed no direct correlation between
morale and productivity. Human relations approach suggests that group
decisionmaking is superior to individual decision. But this may not necessarily be
true in all
cases.
5. Negative view of conflict: Human relationists believed that conflict is always bad
and must be avoided. They failed to recognize conflict as a creative force.

By Dr. Manju Tyagi

 BEHAVIOUR SCIENCE APPROACH

• It includes the issue of organizational behaviour.

• It stresses development of human being for the benefit of both the individual and
the organization.
• Several sociologist and psychologist e.g. Abraham Maslow, McGregor, Federick
Herzberg, Rensis Likert etc. has significant contribution to the development of
approach.

By Dr. Manju Tyagi

 Main Propositions of Behavioural Approach

(i)An organisation is predominantly a social system; in addition to being a physical-

technical system.
(ii)An individual joining the organisation brings to work place his needs, values,
beliefs, attitudes and perceptual qualities.
(iii)Informal groups have their own unwritten constitutions; moulding individual
behaviour favorably/unfavourably towards formal job assignments.
(iv) Conflicts between the organisation and individual and their groups though
natural and inevitable, can be utilised towards extracting positive advantage out of
such conflicts.

By Dr. Manju Tyagi

v) Motivation and particularly non-monetary motivation has a profound effect on
human behaviour at work,
(vi) Democratic leadership involving friendly supervision is extremely helpful in
moulding workers’ attitudes towards work, in a favourable manner.
(vii) Two-way communication in the organisation makes for better understanding
and good human relations-conducive to increased human efficiency at work.
(viii) Involvement of workers in decision-making process makes them more
committed to the organisation and acts as a self-motivating device.

By Dr. Manju Tyagi

 CRITICISM

(i) Over-emphasis on behavioural aspect:

Behavioural sciences approach over-emphasizes on behavioural aspect. In fact, in
management, there are many things more important than human behaviour; which
are ignored by behavioural sciences approach.
(ii) Unpredictability of human behavior:
Behavioural sciences approach recommends a study of human behaviour; which is
difficult to understand. Ever-changing human psychology makes human behaviour
unpredictable. Behavioural sciences approach offers no techniques for predicting
human behaviour.
(iii) Findings not universally applicable:
Findings of behavioural sciences approach are not applicable universally to all
enterprises operating in different social, religious and cultural backgrounds.

By Dr. Manju Tyagi

DIFFERENCE B/W HUMAN RELATION APPROACH
AND BEHAVIOURAL APPROACH

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 SYSTEM APPROACH

• The word ‘System’ is taken from a Greek language which means to bring together
or to combine.
• A system is a set of interrelated parts, which work together to achieve certain
goals or objectives
• Systems approach is based on the generalization that everything is inter-related
and interdependent.
• Ludwig von Bertalanffy is called the Father of System Approach.
• According to Sir Ludwig von Bertalanffy,
“In order to understand an organized whole, we must know both the parts as well
as the relation between them.”

By Dr. Manju Tyagi

The main features of systems approach are as follows:
(i) An organization is a unified and purposeful system consisting of several
interconnected, interacting and interdependent parts.
(ii) The parts or components of a system are called sub-systems. Each sub-
system influence the other sub-systems and the system as a whole. Different
sub-systems are tied together into an organic whole through goals, authority
flows, resource flows and information flow
(iii) The position and function of each sub-system can be analyzed and
understood only in relations to the other subsystems and to the organization
as a whole. Similarly, the organization as a system can be analyzed and
understood only by reference to its sub-systems.
(iv) Each sub-system derives its strength by its association and interaction
with the other sub systems. As a result the collective contribution of the
organization is greater than the aggregate of individual contributions of its
sub-systems. This is known as synergy.
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 (v) Every system has a boundary that separates it from its
environment. The boundary determines which parts are internal to the
organization and which are external. For instance, employees are
within the boundary whereas creditors and customers are external to a
business firm,
(vi) Systems are of two types. An open system continually interacts with
its environment (the forces lying outside it) whereas a closed system is
self-contained and isolated from the environment.
(vii) A business enterprise is an open and dynamic system. It draws
inputs (raw materials, machinery, labour, finance information, etc.)
from its environment. It converts these inputs into outputs (products
and services, etc.) with the help of conversion process. The conversion
or transformation process consists of production and marketing
activities. It supplies them to the environment.

By Dr. Manju Tyagi

By Dr. Manju Tyagi
(viii) The reaction or response of the environment to outputs is known as
feedback. Feedback is useful in evaluating and improving the functioning of
the system. Therefore, feedback is the key to systems control. As an open
system, an organization has to adapt its structure and processes to the
environment changes which affect its internal functioning. In other words, an
organization has to be a steady state and in a state of dynamic equilibrium in
relation to the external environment. A steady state means internal
equilibrium and stability. When an organization's functioning is temporarily
disturbed (say, due to power shortage) it may strive to maintain balance and
regain its original position. However, if the power shortage becomes a
regular phenomenon, it may have to modify its production schedule or
install a power plant or adopt any other adaptive response. It has to move
from its original state to a new state or equilibrium, i.e., dynamic
equilibrium. This, organizations use maintenance (for steady state) and
adaptive (for dynamic equilibrium) mechanisms in order to ensure their
survival and growth.

By Dr. Manju Tyagi

 CRITICISM OF SYSTEMATIC APPROACH

1) Lack of Unified Theory/ Limited Application : Systems approach

does not offer a unified theory applied to all types of organisations.
(2) Vague and Abstract: The systems approach is too abstract to be of
much use to practicing managers. It indicates inter-relationship and
inter-dependence between various parts of the organisation. But it fails
to spell out the precise relationship between different sub-system.
(3) Narrow View of Organisation Environment Interface: The systems
approach recognizes sub-systems. interface between an organisation
and its environment. But is does not present a complete view of this
interface.

By Dr. Manju Tyagi

 CONTINGENCY APPROACH

➢ The contingency approach to management is based on the idea that there is no single best way to
manage.
➢ Contingency theorist includes Selznik, Burns and stalker, Woodward, Lawrence and Lorsch, James
Thompson.
➢ The contingency approach to management assumes that there is no universal answer to many
questions because organizations, people, and situations vary and change over time.
➢ Factors that influence the contingency theory are numerous. These include the following:
• The size of the organization
• How the firm adapts itself to its environment
• Differences among resources and operations activities
• Assumption of managers about employees
• Strategies
• Technologies being used

By Dr. Manju Tyagi

 THE MAIN FEATURES OF THE CONTINGENCY APPROACH
(1) Management is entirely situational. The application and effectiveness of
any techniques contingent on the situation. In other word, the conditions and
complexity of the situation determine which measure or technique is
applicable and effective.
(2) Management should, therefore, match or 'fit' its approach to the
requirements of the particle situation. To be effective management policies
and practices must respond to environment changes. The organization
structure, the leadership style, the control system all should be designed to fit
the particular situation.
(3) Management's success depends on its ability to cope with its environment,
it should sharpen its diagnostic skills so as to anticipate and comprehend the
environmental changes
(4) Managers should understand that there is no one best way to manage.
They must consider management principles and techniques universal.
By Dr. Manju Tyagi
 IN ORDER TO OPERATIONALISE THE CONTINGENCY APPROACH,
MANAGERS HAVE TO TAKE FOUR SEQUENTIAL STEPS

(1) analyze and understand the situation,

(2) Study and examine the validity of various concepts, principles and
techniques to the situation, and hand,
(3) Make the right choice by matching the technique to the situation,
(4) Implement the choice.

By Dr. Manju Tyagi

PRACTICAL UTILITY OF CONTINGENCY APPROACH

(1) Contingency approach provides a clear view of the realities of the

managerial job. The classical approach suggests pre-conceived principles and
techniques as having universal validity ignoring the situational differences.
The contingency approach avoids this organic stand and suggests situation
specific solutions. It is free from value judgements and exhorts managerial
choices to be made in the light of environment factors. To this extent, the
approach is open minded and pragmatic.
(ii) Contingency approach has commonsense value and wide-ranging
practical utility. It widens the horizons of managers from the concepts,
principles and techniques of management. It goads them to be alert and
adaptive to changing situational needs. It promotes analytical, critical and
multi-dimensional thinking with the help of which managers can innovate
new and better approaches and widen their choice.

By Dr. Manju Tyagi

(iii) The contingency approach does not suggest that the findings of earlier
approaches are useless. Rather it attempts to integrate them and make them
contingent upon the demands of the situation. It recognizes that managerial
functions and principles are useful but should be used with discretion and
care to suit the specific situation.
(iv) The approach accepts that organizations and their environment are too
dynamic to be always effectively managed in the same manner. Managers
must be capable of changing their approach and style to match the changes
in the environment. This approach stresses the need for a comparative study
of organizations so as to develop guidelines for coping with different
situations.
(v) The contingency approach is more eclectic than the other approaches. It
recognizes that management thought has not advanced to the point at which
definite prescription for the best way to manage in every situation is made
available.

By Dr. Manju Tyagi

 CRITICISM

1. Contingency approach suffers from inadequately of 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 ‘a managerial action depends on the situation.’
2. The suggestion of the approach is very simple, that is, managers should do according to the
needs of the situation. However, when put into practice, this becomes very complex.
Determination of situation in which managerial action is to be taken involves analysis of a large
number of variables with multifarious dimensions. Therefore, there is a possibility that
managers, who are always short of time, may ignore the thorough analysis of all these
variables and may resort to short-cut and easier way.
3. Contingency approach is basically reactive in nature. If nearly suggests what managers can do
in a given situation. For a given organisation, super system constitutes environment and
management can be applied to supra-system also. Therefore, managers are responsible to
manage the environment in such a way that they avoid the undesirable aspects of
environment.

By Dr. Manju Tyagi

Ttt

By Dr. Manju Tyagi

 MANAGEMENT BY OBJECTIVE (MBO)

• It is a process where the goals of the organization are defined and conveyed by
the management to the members of the organization with the intention to
achieve each objective.
• Management by Objectives (MBO) is a strategic approach to enhance the
performance of an organization.
• Peter F Drucker is the founder of MBO.

By Dr. Manju Tyagi

By Dr. Manju Tyagi
 BENEFITS OF MANAGEMENT BY OBJECTIVES

• Management by objectives helps employees to appreciate their on-the-job roles and

responsibilities.
• The Key Result Areas (KRAs) planned are specific to each employee, depending on their
interest, educational qualification, and specialization.
• The MBO approach usually results in better teamwork and communication.
• It provides the employees with a clear understanding of what is expected of them. The
supervisors set goals for every member of the team, and every employee is provided
with a list of unique tasks.
• Every employee is assigned unique goals. Hence, each employee feels indispensable to
the organization and eventually develops a sense of loyalty to the organization.
• Managers ensure that subordinates’ goals are related to the objectives of the
organization.

By Dr. Manju Tyagi

 LIMITATIONS OF MANAGEMENT BY OBJECTIVES
• Management by objectives often ignores the organization’s existing working
conditions.
• More emphasis is given on goals and targets. The managers put constant pressure
on the employees to accomplish their goals and forget about the use of MBO for
involvement, willingness to contribute, and growth of management.
• The managers sometimes over-emphasize the target setting as compared to
operational issues, as a generator of success.
• The MBO approach does not emphasize the significance of the context wherein
the goals are set. The context encompasses everything from resource availability
and efficiency to relative buy-in from the leadership and stakeholders.
• There is a tendency for many managers to see management by objectives as a
total system that can handle all management issues once installed. The
overdependence may impose problems on the MBO system that it is not
prepared to tackle, and that frustrates any potentially positive effects on the
issues it is supposed to deal with.

By Dr. Manju Tyagi

BUSINESS PROCESS RE-ENGINEERING

By Dr. Manju Tyagi

 BUSINESS PROCESS RE-ENGINEERING

Michael Hammer is the father of BPR

By Dr. Manju Tyagi

• Business process re-engineering is not just a change, but actually it is a
dramatic change and dramatic improvements. This is only achieved
through overhaul the organization structures, job descriptions,
performance management, training and the most importantly, the use
of IT i.e. Information Technology.

By Dr. Manju Tyagi

 Objectives of BPR

1. To dramatically reduce cost.

2. To reduce time requirements.
3. To improve customer services dramatically.
4. To reinvent the basic rules of the business.
5. Customer satisfaction.

By Dr. Manju Tyagi

 Advantages of BPR

1. It offers same views for the business i.e. same database, consistent
reporting and analysis.
2. It offers process orientation facility i.e. streamline processes.
3. It offers rich functionality like templates and reference models.
4. It is flexible.
5. It is expandable.

By Dr. Manju Tyagi

Disadvantages of BPR :

1. It depends on various factors like size and availability of resources.

So, it will not fit for every business.
2. It is not capable of providing an immediate resolution.

By Dr. Manju Tyagi

By Dr. Manju Tyagi
 Expected Questions from Unit 1
Q:1 Discuss the contribution of FW Taylor's Scientific management in the
development of management thought ?
Q: 2 State and explain the system approach" and "contingency approach of
management as the integrating approach of managing an organization?
Q: 3 Describe how Hawthorne experiment contributed to the development of the
theory of human relations schools of management?
Q: 4 The Hawthorne studies sought to determine the impact of physical
environment on worker productivity. Do you agree? Explain with reasons.
Q: 5 As a practicing manager, which of the two approaches (systems or
contingency) would you adopt? Give reason for your selection.
Q: 6 Differentiate between behavioral management perspective and system
management perspective.

By Dr. Manju Tyagi

Q: 7 Highlight the Henry Fayol's fourteen principles of management.
Q: 8 "The behavioral management perspective places much more emphasis on
individual attitudes and behaviors and on group processes and recognize the
importance of behavioral processes in the workplace". Explain the statement.
Q: 9 Do you agree that the behavioral school of management was the most
important turn in the evolution of management thought?
Q:10 Discuss FW Taylor's contribution to the development of management thought.
Q:11 Explain the concept of "system approach and contingency approach. Which
approach do you suggest to be followed?
Q:12 Describe the behavioral school of management thought. What is its relevance
to management?
Q:13 Briefly summarize Hawthorne studies. What are the primary conclusions
reached following their completion?

By Dr. Manju Tyagi

Q: 14 Describe the contingency approach and outline its usefulness to the study
and practice of management.
Q: 15 Differentiate between Scientific Management and Administrative
Management schools of thought.
Q: 16 Describe the behavioral school of management thought. What is its relevance
to management?
Q:17 "Contingency approach to management overrules all theories of
management Explain.
Q: 18 Several schools of management thought prevail in business literature today.
Being a manager of an organization, which philosophy would you prefer?
Q: 19 As a practicing manager of manufacturing organization in India, which
management theory would you like to adopt? Give reasons for your selection.
Q:20 Discuss briefly the major schools of thought in management?

By Dr. Manju Tyagi

By Dr. Manju Tyagi