F W Taylors Scientific Approach

 Time and motion study

 Application of science and elimination of rule of thumb

 Differential Payments

 Cooperation between workers and management

 Group harmony

 Method study

 Scientific training

 Standardization
Henry Fayol Classical administration theory
1. Division of work
2. Authority and responsibility
3. Discipline
4. Unity of Command
5. Unity of direction
6. Subordination of individual interest
7. Remuneration of Personal
8. Centralization
9. Scalar Chain
10.Order
11.Equity
12.Stability of tenure of personal
13.Initiative
14.Esprit de corps
Eltan Mayo- Behavioural Approach
• Human Relations Approach

• Behavioural Science Approach

Hawthorne Experiments

• Illumination Experiments- Higher or lower levels of light

• Relay Assembly Experiments- experiment carried on ladies staff

• Interviewing Program- to hear ideas from employee

• Bank Wiring room experiments- to find out about payment incentives

 Administration and management

Top management
Thinking Admin 80% mgmt 20%

2 0%
Doing m in
Ad mgmt 80% Lower Management

Administration – policy, finance, distribution, production

Management- execution of policies, application

Nature of Management

Low efficiency High efficiency

High effectiveness High effectiveness

Low efficiency high efficiency

Low effectiveness low effectiveness
Levels of
Management
Top Level
Management

Middle Level
Management

Low Level
Management
Role of Manager
1. Figurehead

2. Leader

3. Liaison

4. Monitor

5. Disseminator

6. Spokesperson

7. Entrepreneur

8. Disturbance Handler

9. Resource Allocator

10. Negotiator
Forms of Organization
Factors: a) Size of Organization
b) Nature of Product being Manufactured
c) Complexity of the problems being faced

 Line Organization

 Functional Organization

 Line and Staff organization

 Project Organization

 Matrix Organization

 Committee Organization
Line Organization

Work Managers

Superintendent 1 Superintendent 2

Foreman Foreman Foreman Foreman

Workers
 Functional Organization

Superintendent

Office Shop

• Route Clerk • Gang Boss

• Instruction Clerk • Speed boss

• Time and cost clerk • Repair Boss

• Disciplinarian • Inspector
 Line and Staff Organization
Secretory BOD Legal Advisor
Account Officer Sales manager
GM
Personal Manager Purchase Engineer
Industrial Engineer
Design Engineer WM
Sales officer

SUPTD-A SUPTD-B

F/M F/M F/M F/M

Worker Worker
 Project Organization
General
Manager

Project Manager Project Manager

Project 1 Project 2

Committee Organization
Differentiating Traditional Organization Modern Organization
Factors

Workforce Limited Technical ability and modest Well educated, technically capable
Limitation educational background and skilful labour

Management Centralized management Strategic management and

decentralized

Levels Various rules, various structures Result oriented, few rules and
having many goals hierarchies

Closed to environment, non Open to environment and

Interaction
interactive interactive

Strategy to continue improving in

Flexibility Stable structure for long time order to remain competitive thus
experience frequent changes

Flexibility of Workers could remain in same work Changes in worker as well as job as
Workforce level until they retired per requirement
Differentiating
Factors Traditional Organization Modern Organization

There may be reorganization of

Do not permit restructuring of
Restructuring divisions divisions, process of business as
per transformation required

It is individual oriented. They have to Teamwork. Thus difficult to

Cooperativeness
follow instruction given by managers differentiate individuals work.

Task is executed with assistance of

Teamwork Fails at building teamwork
united effort.

Specialization and Fail at utilizing benefits of Efficiency and maximization of

output is enhanced in each team
Efficiency specialization
with high quality

Emphasize on customer
Customer Centric Rule oriented not customer oriented
satisfaction.
 Business Sector

 Private Sector

 Cooperative Sector

 Public sector

 Joint Sector

 Service sector
Private Sector-

owned and managed by individual or enterprises

Provides maximum employment and has major contribution in GDP of country

Groups ranging from shops to large multi-nationals

During 1991, more and more areas were made open for private sector and industrial activities

Private sector has been assigned with task of developing consumer goods.

Investment are interested in quick yielding projects and high profitable areas
 Examples

 Sole Proprietors: small shops, traders, designers etc

 Partnership: Legal firms, Chartered accountants, etc.

 Small and medium sized business: retail, hospitality, wholesale, food etc.

 Large multinationals: Unilever, Coca Cola, Honda etc.

Cooperative sector

Autonomous Association democratically directed by people

To meet common economic, social and cultural needs

Owned and operated by producers or suppliers of raw materials, workers or both

Principles of cooperative organization

• Voluntary and open membership

• Democratic process

• Economic participation of members

• Autonomy and Independence

• Education, Training and information

• Concern for community

 Examples

 Amul

 Cooperative bank of Maharashtra

 Shri Mahila griha udyog

 Sugar Cooperatives

 Indian farmers fertilizers Cooperative (IFFCO)

 National Agriculture Cooperative Marketing Federation of india

Public Sector

 Controlled by state to provide services for their citizens

 Funding from Taxes, Fees and transfers from other levels of organization

 Main objective is to provide services to the society at large

 In some cases it overlap with private sector

 It include Education, Waste management, electricity generation and

distribution, healthcare etc.

 Some services are shifted from private sector to public sector like healthcare
 Joint Sectors

 Both its ownership and control are shared by public as well as private sectors

 As per Dutt committee, both public and private investment taken place and

state take active part in direction and control

 As per JRD Tata, govt. participation of the capital will not be less than 26% and

routine management will be in hands of private sector.

 Central Govt. and private entrepreneur may jointly set up new entreprises

 The existing private enterprises may be transformed into joint sector by

acquiring some part of equity

 Existing public sector can be transformed into joint sector by selling some equity
 Service sectors

 Provide service and not tangible product

 Banking, Insurance, retail, health, education, social work, communication,

computer services

 In most developed countries it contributes more than 70% while for

developing countries like India its more than 60%to the GDP

 Could be attributed to their ability to understand what customer wants and

being able to give it to them quickly at low cost

Types of Business Organisation

 Ownership

 Lawful Business

 Separate Entity and Management

 Continuity

 Risk
 Forms of Business Organization

 Sole Proprietorship

 Partnership

 Private Limited Company

 Joint stock company (Public limited)

 Cooperative Society

 Government Companies (Public Corporations)

 Sole Proprietorship
When ownership and management of business are in control of individuals

Characteristics of Sole Proprietorship

1. Ownership

2. Management

3. Source of Capital

4. Legal Status

5. Liability

6. Stability

7. Legal Formalities
Advantages
1. Easy formation
2. Better Control
3. Prompt Decision Making
4. Flexibility in operations
5. Retention of business secrets
6. Direct Motivation
7. Personal Attention to consumer needs
8. Creation of Employment
9. Social Benefits
10. Equitable distribution of wealth
Disadvantages
11. Unlimited Liability
12. Limited Financial Resources
13. Limited Capacity of Individuals
14. Uncertainty of Duration
Partnership
Characteristics of Partnership

1. Number of partners

2. Contractual Relationships

3. Competence of Partners

4. Sharing of profits and loss

5. Unlimited liability

6. Principal agent relationship

7. Transfer of interest

8. Legal Status

9. Voluntary Registration

10. Dissolution of Partnership

Advantage Disadvantage

 Easy Formation  Instability

 Larger Resources  Unlimited Liability

 Flexibility in Operations  Lack of Harmony

 Better Management  Limited Capital

 Sharing of Risk

 Protection of minority interest

 Better public Relations

 Private Limited Company
 Voluntary Association of not less than 2 and not more than 50
 Not allowed to invite the general public to subscribe to its shares
 The shares allotted to its members are not freely transferable between them.
 It enjoys continuity of existence

Advantage Disadvantage

 Continuity of existence  Shares are not freely transferable

 Limited Liability  Not allowed to invite public to subscribe

 Less Legal Restrictions to its shares

 Scope for promotional frauds

 Undemocratic control
 Joint Stock Company (Public Limited Company)
 Association of persons who generally contribute money for general purpose
 Tata Iron and steel co ltd., Hindustan Lever ltd, Reliance Industries Ltd, Ponds India Ltd
etc.
 The companies are govern by Indian companies act 1956
Characteristics
 Artificial Person
 Separate Legal Entity
 Common Seal
 Perpetual Existence
 Limited Liability
 Transferability of shares
 Formation
 Membership- minimum seven and maximum unlimited
 Management
 Capital
Advantage Disadvantage
• Limited Liability • Formation is not easy

• Continuity of existence • Control by group

• Benefits of large scale operation • Speculation and Manipulation

• Professional Management • Excessive Government Control

• Social Benefits • Delay in Policy Decision

• Research and Development • Social Abuses

  Ten Persons can form Society
Cooperative Society  Under act 1912 and other state
Society Act

Consumer  To protect interest of ordinary consumers

Cooperative  Kendriya Bhandar at Delhi

Producers  To benefit small producers who face difficulties

Cooperative  Handloom Owner

 Formed by producers and manufacturers to

Marketing eliminate exploitation by middlemen
Cooperative
 Kashmir Art Emporium

Housing  To provide housing facilities to its members

Cooperative

Credit  To provide financial helps to its members

Cooperative  Rural credit societies

Forming  Formed by small farmers to carry on work jointly

Cooperative
 Government Companies

• Formation

• Ownership

• Management

• Legal Status

• Body Corporate

• Employees

• Capital Collection

• Approval of Accounts

• Flexibility

• Exemptions
 Globalization
 International Monetary Fund defines as growing interdependence of countries
worldwide through increasing volume and variety of cross border transaction in
goods and services.

 Charles U. L. defines as Shift towards more integrated and interdependent world

economy.

 Globalization of markets

 Globalization of production

 Integrates economy and society

 Features of Globalization
 Opening and planning to expand business throughout world

 Erasing differences between domestic market and foreign market

 Buying and selling goods and services from/to any country

 Establishing manufacturing and distribution facilities in any part of world

 Sourcing of factors of production from entire world

 Global orientation in strategies, structure, and culture

 Setting mind and attitude to view entire global

 Globalizing marketing, production, investment, technology and other activity

 Free flow of capital

Free flow of Technology

Spread-out manufacturing facilities

Balanced development of world Economy

Increase in production and consumption

Advantages Low price with high quality

Cultural Exchange

Increase in Employment and Income

Higher standard of living

Balanced human development

Increase in welfare and prosperity

 Disadvantage
 Kills domestic business

 Exploits human resources

 Decline in demand for domestic products

 Decline in income

 Widening gap between rich and poor

 Transferred of natural resources

 Leads to commercial and political colonialism

 National Sovereignty at stake

 What is management? State its implications. (DEC 2012, May 2012, May 2014)
 State Characteristics of management (Dec 2012, May 2012, May 2014)
 State Functions of management.(Dec 2012, May 2012, May 2014, Feb 2017 insem)
 Discuss major principles distinguished by F. W. Taylor. (May 2012)
 Explain F W Taylors theory of management (Dec 2012, May 2015)
 What is organizational behavioural approach in management (May 2013, Dec 2012)
 Explain F W taylors theory of management. How it is differ from Henry Fayol. (Dec 2012,
May 2015)
 Explain how today managers use general administrative theory (May 2014, Feb 2017)
 How do you correlate the terms organizational management and administration? List out
various functions of management. (Dec 2013, May 2014)
 Explain Why Customer service and innovations are important for manager’s job (May
2014)
 Draw organizational chart of line and staff organization. Give four merits and demerits
(May 2012)
 Define an organization. What are its common characteristics? Compare traditional and
modern organization. May 2013
 Define forms of organization- Line, Line staff committee. (May 2017)
 Enlist advantages and disadvantages of line and line staff organization. (May 2015, Feb
2017)
 Compare Traditional and new organization. (May 2017)
 Enlist advantages and disadvantages of any 2 types of business ownership. (May 2015)