Management & Organisational Behaviour: UNIT- 1: Management and Development of Management Thought

Monday, September 21, 2020

UNIT- 1: Management and Development of Management Thought

Part 1- Management

1.1: Concept/Definition of Management

Management being interdisciplinary in nature has undergone changes because of the developments in behavioral sciences, quantitative techniques, engineering and technology, etc. Yet, a definition of management is necessary for its teaching and research, and also for improvement in its practice. Let us discuss some of the leading definitions of management:

Harold Koontz says, "Management is the art of getting things done through and within formally organized group."

Sir Charles Reynold, "Management is the process of getting things done through the agency of a community. The functions of management are the handling of community with a view of fulfilling the purposes for which it exists."

James Lundy, "Management is principally a task of planning, coordinating, motivating and controlling the efforts of other towards a specific objective. It involves the combining of the traditional factors of production land, labour, capital in an optimum manner, paying due attention, of course, to the particular goals of the organization."

Wheeler, "Management is centered in the administrators or managers of the firm who integrate men, material and money into an effective operating limit."

J.N. Schulze, "Management is the force which leads guides and directs an organization in the accomplishment of a pre-determined object."

Keith and Gubellini, "Management is the force that integrates men and physical plant into an effective operating unit."

Mary Parker Follett defines management as the "art of getting things done through people". This definition calls attention to the fundamental difference between a manager and other personnel of an organization. A manager is one who contributes to the organization’s goals indirectly by directing the efforts of others – not by performing the task himself. On the other hand, a person who is not a manager makes his contribution to the organization’s goals directly by performing the task himself.

Sometimes, however, a person in an organization may play both these roles simultaneously. For example, a sales manager is performing a managerial role when he is directing his sales force to meet the organization’s goals, but when he himself is contacting a large customer and negotiating a deal, he is performing a non-managerial role. In the former role, he is directing the efforts of others and is contributing to the organization’s goals indirectly; in the latter role, he is directly utilizing his skills as a salesman to meet the organization’s objectives.

A somewhat more elaborate definition of management is given by George R. Terry. He defines management as a process "consisting of planning, organizing, actuating and controlling, performed to determine and accomplish the objectives by the use of people and other resources".

According to this definition, management is a process – a systematic way of doing things. The four management activities included in this process are: planning, organizing, actuating and controlling. Planning means that managers think of their actions in advance. Organizing means that managers coordinate the human and material resources of the organization. Actuating means that managers motivate and direct subordinates. Controlling means that managers attempt to ensure that there is no deviation from the norm or plan. If some part of their organization is on the wrong track, managers take action to remedy the situation.

To conclude, we can say that various definitions of management do not run contrary to one another. Management is the sum-total of all those activities that

Determine objectives, plans, policies and programmes
Secure men, material, machinery cheaply
Put all these resources into operations through sound organization
Direct and motivate the men at work
Supervises and control their performance and
Provide maximum prosperity and happiness for both employer and employees and public at large.

1.2: Nature of Management

Management has been conceptualized as the social process by which managers of an enterprise integrate and coordinate its resources for the achievement of common, explicit goals. It has developed into a body of knowledge and a separate identifiable discipline during the past six decades. The nature of management as a science, as art and as a profession is discussed below:

Management as a Science: Development of management as a science is of recent origin, even though its practice is ages old. Fredrick W. Taylor was the first manager-theorist who made significant contributions to the development of management as a science. He used the scientific methods of analysis, observation and experimentation in the management of production function.

The scientific character of management has been particularly strengthened by management scientists who have developed mathematical models of decision making.

Another characteristic of science in management is that it uses the scientific methods of observation, experimentation and laboratory research. Management principles are firmly based on observed phenomena, and systematic classification and analysis of data. These analyses and study of observed phenomena are used for inferring cause-effect relationships between two or more variables. Generalizations about these relationships result in hypotheses. The hypotheses when tested and found to be true are called principles. These principles when applied to practical ituations help the practitioner in describing and analyzing problems, solving problems and predicting the results.

Even though management is a science so far as to possess a systematized body of knowledge and uses scientific methods of research, it is not an exact science like natural sciences. It has provided powerful tools of analysis, prediction and control to practicing managers and helped them in performing their material tasks more efficiently and effectively.

Management as an Art: Just as an engineer uses the science of engineering while building a bridge, a manager uses the knowledge of management theory while performing his managerial functions. Engineering is a science; its application to the solution of practical problems is an art. Similarly, management as a body of knowledge and a discipline is a science; its application to the solution of organizational problems is an art. The practice of management, like the practice of medicine, is firmly grounded in an identifiable body of concepts, theories and principles. A medical practitioner, who does not base his diagnosis and prescription on the science of medicine, endangers the life of his patient. Similarly, a manager who manages without possessing the knowledge of management creates chaos and jeopardizes the well-being of his organization.

Principles of management like the principles of medicine are used by the practitioner not as rules of thumb but as guides in solving practical problems.

Management as a Profession: By a professional manager, we generally mean a manager who undertakes management as a career and is not interested in acquiring ownership share in the enterprise which he manages. But, is management a profession in the true sense of the word? or, is it like the professions of law and medicine?

According to McFarland, a profession possesses the following characteristics:

(i) A body of principles, techniques, skills, and specialized knowledge;

(ii) Formalized methods of acquiring training and experience;

(iii) The establishment of a representative organization with professionalization as its goal;

(iv) The formation of ethical codes for the guidance of conduct; and

(v) The charging of fees based on the nature of services.

Management is a profession to the extent it fulfills the above conditions. It is a profession in the sense that there is a systematized body of management, and it is distinct, identifiable discipline. It has also developed a vast number of tools and techniques. But unlike medicine or law, a management degree is not a prerequisite to become a manager. In fact, most managers in India as elsewhere do not have a formal management education. It seems reasonable to assume that at no time in the near future, the possession of a management degree will be a requirement for employment as a career manager.

Management partially fulfils the third characteristic of profession. There are a number of representative organizations of management practitioners almost in all countries such as the All India Management Association in India. Management does not fulfill the last two requirements of a profession. There is no ethical code of conduct for managers as for doctors and lawyers. Some individual business organizations, however, try to develop a code of conduct for their own managers but there is no general and uniform code of conduct for all managers.

It may be concluded from the above discussion that management is a science, an art as well as a profession.

1.3: Functions of Management/ Process of Management (POSDCC)

There is enough disagreement among management writers on the classification of managerial functions. Newman and Summer recognize only four functions, namely, organizing, planning, leading and controlling. Henri Fayol identifies five functions of management, viz. planning, organizing, commanding, coordinating and controlling. Warren Haynes and Joseph Massie classify management functions into decision-making, organizing, staffing, planning, controlling, communicating and directing. Koontz and O'Donnell divide these functions into planning organizing, staffing, directing and controlling. For our purpose, we shall designate the following six as the functions of a manager: planning, organizing, staffing, directing, coordinating and controlling.

1. Planning: Planning is the most fundamental and the most pervasive of all management functions. If people working in groups have to perform effectively, they should know in advance what is to be done, what activities they have to perform in order to do what is to be done, and when it is to be done. Planning is concerned with 'what', 'how, and 'when' of performance. It is deciding in the present about the future objectives and the courses of action for their achievement. It thus involves:

(a) Determination of long and short-range objectives;

(b) Development of strategies and courses of actions to be followed for the achievement of these objectives; and

The organizational objectives are set by top management in the context of its basic purpose and mission, environmental factors, business forecasts, and available and potential resources. These objectives are both long-range as well as short-range. They are divided into divisional, departmental, sectional and individual objectives or goals. This is followed by the development of strategies and courses of action to be followed at various levels of management and in various segments of the organization. Policies, procedures and rules provide the framework of decision making, and the method and order for the making and implementation of these decisions.

Every manager performs all these planning functions, or contributes to their performance. Planning is thus the most basic function of management. It is performed in all kinds of organizations by all managers at all levels of hierarchy.

2. Organizing: Organizing involves identification of activities required for the achievement of enterprise objectives and implementation of plans; grouping of activities into jobs; assignment of these jobs and activities to departments and individuals; delegation of responsibility and authority for performance, and provision for vertical and horizontal coordination of activities. Every manager has to decide what activities have to be undertaken in his department or section for the achievement of the goals entrusted to him. Organizing thus involves the following sub-functions:

(a) Identification of activities required for the achievement of objectives and implementation of plans.

(b) Grouping the activities so as to create self-contained jobs.

(d) Delegation of authority so as to enable them to perform their jobs and to command the resources needed for their performance.

(e) Establishment of a network of coordinating relationships.

Organizing is thus the basic process of combining and integrating human, physical and financial resources in productive interrelationships for the achievement of enterprise objectives. It aims at combining employees and interrelated tasks in an orderly manner so that organizational work is performed in a coordinated manner, and all efforts and activities pull together in the direction of organizational goals.

3. Staffing: Staffing is a continuous and vital function of management. After the objectives have been determined, strategies, policies, programmes, procedures and rules formulated, identified and grouped into jobs etc., the next logical step in the management process is to procure suitable personnel for manning the jobs. Since the efficiency and effectiveness of an organization significantly depends on the quality of its personnel and since it is one of the primary functions of management to achieve qualified and trained people to fill various positions, staffing has been recognized as a distinct function of management. It comprises several sub-functions:

(a) Manpower planning involving determination of the number and the kind of personnel required.

(b) Recruitment for attracting adequate number of potential employees to seek jobs in the enterprise.

(d) Placement, induction and orientation.

(e) Transfers, promotions, termination and layoff.

(f) Training and development of employees.

As the importance of human factor in organizational effectiveness is being increasingly recognized, staffing is gaining acceptance as a distinct function of management. It need hardly any emphasize that no organization can ever be better than its people, and managers must perform the staffing function with as much concern as any other function.

4. Directing: Directing is the function of leading the employees to perform efficiently, and contribute their optimum to the achievement of organizational objectives. Jobs assigned to subordinates have to be explained and clarified, they have to be provided guidance in job performance and they are to be motivated to contribute their optimum performance with zeal and enthusiasm. The function of directing thus involves the following sub-functions:

(a) Communication

(b) Motivation

5. Coordination and Controlling: Coordinating is the function of establishing such relationships among various parts of the organization that they all together pull in the direction of organizational objectives. It is thus the process of tying together all the organizational decisions, operations, activities and efforts so as to achieve unity of action for the accomplishment of organizational objectives. Coordination, as a management function, involves the following sub-functions:

(a) Clear definition of authority-responsibility relationships

(b) Unity of direction

(d) Effective communication

(e) Effective leadership

Controlling is the function of ensuring that the divisional, departmental, sectional and individual performances are consistent with the predetermined objectives and goals. Deviations from plans and objectives provide feedback to managers, and all other management processes including planning, organizing, staffing, directing and coordinating are continuously reviewed and modified, where necessary. Controlling implies a flexible and dynamic organization which will permit changes in objectives, plans, programmes, strategies, policies, organizational design, staffing policies and practices, leadership style, communication system, etc., for it is not uncommon that employees failure to achieve predetermined standards is due to defects or shortcomings in any one or more of the above dimensions of management. Thus, controlling involves the following process:

(a) Measurement of performance against predetermined goals.

(b) Identification of deviations from these goals.

It may be pointed out that although management functions have been discussed in a particular sequence-planning, organizing, staffing, directing, coordinating and controlling – they are not performed in a sequential order. Management is an integral process and it is difficult to put its functions to separate one from the other. For example, when a production manager is discussing work problems with one of his subordinates, it is difficult to say whether he is guiding, developing or communicating, or doing all these things simultaneously. Moreover, managers often perform more than one function simultaneously.

1.4: Significance of Management

Management is concerned with acquiring maximum prosperity with a minimum effort. Management is essential wherever group efforts are required to be directed towards achievement of common goals. In this management conscious age, the significance of management can hardly be over emphasized.. Koontz and O'Donnel have rightly observed "there is no more important area of human activity than management since its task is that of getting things done through others."

The inputs of labour, capital and raw material never become productive without the catalyst of management. It is now widely recognized that management is an important factor of growth of any country. The following points further highlight the significance of management:

1. Achievements of group goals: Management makes group efforts more effective. The group as a whole cannot realise its objectives unless and until there is mutual co-operation and co-ordination among the members of the group. Management creates team work and team spirit in an organization by developing a sound organization structure. It brings the human and material resources together and motivates the people for the achievement of the goals of the organization.

2. Optimum utilization of resources: Management always concentrates on achieving the objectives of the enterprise. The available resources of production are put to use in such a way that all sort of wastage and inefficiencies are reduced to a minimum. Workers are motivated to put in their best performance by the inspiring leadership. Managers create and maintain an environment conducive to highest efficiency and performance. Through the optimum use of available resources, management accelerates the process of economic growth.

3. Minimisation of cost: In the modern era of intense competition, every business enterprise must minimise the cost of production and distribution. Only those concerns can survive in the market, which can produce goods of better quality at the minimum cost.

4. Change and growth: A business enterprise operates in a constantly changing environment. Changes in business environment create uncertainties and risk and also produce opportunities for growth. An enterprise has to change and adjust itself in the ever changing environment. Sound management moulds not only the enterprise but also alters the environment itself to ensure the success of the business.

5. Efficient and smooth running of business: Management ensures efficient and smooth running of business, through better planning, sound organization and effective control of the various factors of production.

6. Higher profits: Profits can be enhanced in any enterprise either by increasing the sales revenue or reducing costs. To increase the sales revenue is beyond the control of an enterprise. Management by decreasing costs increases its profits and thus provides opportunities for future growth and development.

7. Provide innovation: Management gives new ideas, imagination and visions to an enterprise.

8. Social benefits: Management is useful not only to the business firms but to the society as a whole. It improves the standard of living of the people through higher production and more efficient use of scarce resources. By establishing cordial relations between different social groups, management promotes peace and prosperity in society.

9. Useful for developing countries: Management has to play a more important role in developing countries, like India. In such countries, the productivity is low and the resources are limited. It has been rightly observed, "There are no under-developed countries. They are only under-managed ones".

1.5: Managerial Levels

Levels of management refer to a line of demarcation between various managerial positions in an enterprise. The levels of management depend upon its size, technical facilities, and the range of production. We generally come across two broad levels of management, viz. (i) administrative management (i.e., the upper level of management) and (ii) operating management (i.e., the lower level of management). Administrative management is concerned with "thinking" functions such as laying down policy, planning and setting up of standards. Operative management is concerned with the "doing" function such as implementation of policies, and directing the operations to attain the objectives of the enterprise.

But in actual practice, it is difficult to draw any clear cut demarcation between thinking function and doing function. Because of the basic/fundamental managerial functions are performed by all managers irrespective of their levels or ranks. For instance, wage and salary director of a company may assist in fixing wages and salary structure as a member of the Board of Directors, but as head of wages and salary department, his job is to see that the decisions are implemented.

The real significance of levels is that they explain authority relationships in an organization. Considering the hierarchy of authority and responsibility, one can identify three levels of management namely:

1. Top Level Management: Top level management of a company consists of owners/shareholders, Board of Directors, its Chairman, Managing Director, or the Chief Executive, or the General Manager or Executive Committee having key officers. The important functions of top management include:

(a) To establish the objectives or goals of the enterprise.

(b) To make policies and frame plans to attain the objectives laid.

(d) To assemble the resources of money, men, materials, machines and methods to put the plans into action.

(e) To exercise effective control of the operations.

(f) To provide overall leadership to the enterprise.

2. Middle Level Management: Middle management of a company consists of heads of functional departments viz. Purchase Manager, Production Manager, Marketing Manager, Financial controller, etc. and Divisional and Sectional Officers working under these Functional Heads. The job of middle management is to implement the policies and plans framed by the top management. It serves as an essential link between the top management and the lower level or operative management. The following are main functions of middle management:

(a) To interpret the policies chalked out by top management.

(b) To prepare the organizational set up in their own departments for fulfilling the objectives implied in various business policies.

(d) To assign activities, duties and responsibilities for timely implementation of the plans.

(e) To compile all the instructions and issue them to supervisor under their control.

(f) To motivate personnel to attain higher productivity and to reward them properly.

(g) To cooperate with the other departments for ensuring a smooth functioning of the entire organization.

(h) To collect reports and information on performance in their departments.

(i) To report to top management

(j) To make suitable recommendations to the top management for the better execution of plans and policies.

3. Lower or Operation level Management: These are placed at the bottom of the hierarchy of management, and actual operations are the responsibility of this level of management. It consists of foreman, supervisors, sales officers, accounts officers and so on. Their authority and responsibility is limited. The following are main functions of lower management:

They pass on the instructions of the middle management to workers.
They interpret and divide the plans of the management into short-range operating plans.
They are also involved in the process of decisions-making.
They have to get the work done through the workers.
They allot jobs to the workers, evaluate their performance and report to the middle level management.
They are more concerned with direction and control functions of management.
They devote more time in the supervision of the workers.

1.6: Managerial Skills

A skill is an individual's ability to translate knowledge into action. Hence, it is manifested in an individual's performance. Skill is not necessarily inborn. It can be developed through practice and through relating learning to one's own personal experience and background. In order to be able to successfully discharge his roles, a manager should possess three major skills. These are conceptual skill, human relations skill and technical skill. Conceptual skill deals with ideas, technical skill with things and human skill with people. While both conceptual and technical skills are needed for good decision-making, human skill in necessary for a good leader.

The conceptual skill refers to the ability of a manager to take a broad and farsighted view of the organization and its future, his ability to think in abstract, his ability to analyze the forces working in a situation, his creative and innovative ability and his ability to assess the environment and the changes taking place in it. It short, it is his ability to conceptualize the environment, the organization, and his own job, so that he can set appropriate goals for his organization, for himself and for his team. This skill seems to increase in importance as manager moves up to higher positions of responsibility in the organization.

The technical skill is the manager's understanding of the nature of job that people under him have to perform. It refers to a person's knowledge and proficiency in any type of process or technique. In a production department this would mean an understanding of the technicalities of the process of production. Whereas this type of skill and competence seems to be more important at the lower levels of management, its relative importance as a part of the managerial role diminishes as the manager moves to higher positions. In higher functional positions, such as the position of a marketing manager or production manager, the conceptual component, related to these functional areas becomes more important and the technical component becomes less important.

Human relations skill is the ability to interact effectively with people at all levels. This skill develops in the manager sufficient ability

(a) To recognize the feelings and sentiments of others;

(b) To judge the possible actions to, and outcomes of various courses of action he may undertake; and

This type of skill remains consistently important for managers at all levels.

Table-1 gives an idea about the required change in the skill-mix of a manager with the change in his level. At the top level, technical skill becomes least important. That is why, people at the top shift with great ease from one industry to another without an apparent fall in their efficiency. Their human and conceptual skills seem to make up for their unfamiliarity with the new job's technical aspects.

Table-1: Skill-mix of different management levels

1.7: Roles of Manager

1. Interpersonal Roles

Figurehead: In this role, every manager has to perform some duties of a ceremonial nature, such as greeting the touring dignitaries, attending the wedding of an employee, taking an important customer to lunch and so on.

Leader: As a leader, every manager must motivate and encourage his employees. He must also try to reconcile their individual needs with the goals of the organization.

Liaison: In this role of liaison, every manager must cultivate contacts outside his vertical chain of command to collect information useful for his organization.

2. Informational Roles

Monitor: As monitor, the manager has to perpetually scan his environment for information, interrogate his liaison contacts and his subordinates, and receive unsolicited information, much of it as result of the network of personal contacts he has developed.

Disseminator: In the role of a disseminator, the manager passes some of his privileged information directly to his subordinates who would otherwise have no access to it.

Spokesman: In this role, the manager informs and satisfies various groups and people who influence his organization. Thus, he advises shareholders about financial performance, assures consumer groups that the organization is fulfilling its social responsibilities and satisfies government that the origination is abiding by the law.

3. Decisional Roles

Entrepreneurship: In this role, the manager constantly looks out for new ideas and seeks to improve his unit by adapting it to changing conditions in the environment.

Disturbance Handler: In this role, the manager has to work like a fire fighter. He must seek solutions of various unanticipated problems – a strike may loom large a major customer may go bankrupt; a supplier may renege on his contract, and so on.

Resource Allocator: In this role, the manager must divide work and delegate authority among his subordinates. He must decide who will get what.

Negotiator: The manager has to spend considerable time in negotiations. Thus, the chairman of a company may negotiate with the union leaders a new strike issue; the foreman may negotiate with the workers a grievance problem, and so on.

In addition, managers in any organization work with each other to establish the organization’s long-range goals and to plan how to achieve them. They also work together to provide one another with the accurate information needed to perform tasks. Thus, managers act as channels of communication with the organization.

1.8: Management vs. Administration

The use of two terms management and administration has been a controversial issue in the management literature. Some writers do not see any difference between the two terms, while others maintain that administration and management are two different functions. This controversy is discussed as under in three heads/viewpoints:

(i) Administration is a Higher Level Function: According to Oliver Shelden, "Administration is concerned with the determination of corporate policy, the coordination of finance, production and distribution, the settlement of the compass of the organization and the ultimate control of the executive. Management proper is concerned with the execution of policy within the limits set up by administration and the employment of the organization in the particular objects before it... Administration determines the organization and management uses it. Administration defines the goals; management strives towards it".

(ii) Management is a Generic Term including Administration: According to Brech, "Management is a social process entailing responsibility for the effective and economical planning and regulation of the operation of an enterprise in fulfillment of a given purpose or task. 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 plans". Thus, Brech conceives administration as a part of managemen

(iii) Management and Administration are Synonymous: The third viewpoint is that there is no distinction between the terms 'management' and 'administration', so they are often used interchangeably. The term management is used for higher executive functions like determination of policies, planning, organizing, directing and controlling in the business circles, while the term administration is used for the same set of functions in the Government circles. It seems from the above concepts of administration and management that administration is the process of determination of objectives, laying down plans and policies, and ensuring that achievements are in conformity with the objectives. Management is the process of executing the plans and policies for the achievement of the objectives determined by an administration. This distinction seems to be too simplistic and superficial. If we regard chairmen, managing directors and general managers as performing administrative functions, it cannot be said that they perform only planning functions of goal determination, planning and policy formulation, and do not perform other functions such as staffing functions of selection and promotion, or directing functions of leadership, communication and motivation. On the other hand, we cannot say that managers who are responsible for the execution of plans and formulation of plans and policies, etc. do not contribute to the administrative functions of goal determination, and formulation of plans and policies. In fact all manages, whether the chief executive or the first line supervisor, are in some way or the other involved in the performance of all the managerial functions. It is, of course, true that those who occupy the higher echelons of organizational hierarchy are involved to a greater extent in goal determination, plans and policy formulation and organizing than those who are at the bottom of the ladder.

Administration is a determinative function; on the other hand, management is an executive function which is primarily concerned with carrying out of the broad policies laid down by the administration as shown in Table 2.

Table 2: Administration Vs. Management

S. No.	Basic	Administration	Management
1	Meaning	Administration is concerned with the formulation of objectives, plans and policies of the organization	Management means getting the work done through and with others
2	Nature of work	Administration relates to the decision- making. It is a thinking function	Management refers to the execution of decisions. It is a doing function
3	Decision Making	Administration determines what is to be done and when it is to be done	Management decides who shall implement the administrative excisions
4	Status	Administration refers to higher levels of management	Management is relevant at lower levels in organization

1.9: Coordination as Essence of Management-

(a) Clear definition of authority-responsibility relationships

(b) Unity of direction

(d) Effective communication

(e) Effective leadership

Part 2- Development of Management Thought

Classical Approach to Management:

The classical approach is also known as traditional approach, management process approach or empirical approach. The main features of this approach are as follows:

• It laid emphasis on division of labour and specialization, structure, scalar and functional processes and span of control. Thus, they concentrated on the anatomy of formal organization.

• Management is viewed as a systematic network (process) of interrelated functions. The nature and content of these functions, the mechanics by which each function is performed and the interrelationship between these functions is the core of the classical approach.

• It ignored the impact of external environment on the working of the organization. Thus, it treated organization as closed system.

• On the basis of experience of practicing managers, principles are developed. These principles are used as guidelines for the practicing executive.

• Functions, principles and skills of management are considered universal. They can be applied in different situations.

• The integration of the organization is achieved through the authority and control of the central mechanism. Thus, it is based on centralization of authority.

• Formal education and training is emphasized for developing managerial skills in would be managers. Case study method is often used for this purpose.

• Emphasis is placed on economic efficiency and the formal organization structure.

• People are motivated by economic gains. Therefore, organization controls economic incentives.

The Classical approach was developed through three mainstreams- Taylor’s Scientific Management, Fayol’s Administrative Management and Weber’s Ideal Bureaucracy. All the three concentrated on the structure of organization for greater efficiency.

Merits of Classical Approach

• The classical approach offers a convenient framework for the education and training of managers.

• The observational method of case study is helpful in drawing common principles out of past experience with some relevance for future application

• It focuses attention on what managers actually do.

• This approach highlights the universal nature of management.

• It provides scientific basis for management practice.

• It provides a starting point for researchers to verify the validity and to improve the applicability of management knowledge. Such knowledge about management is effectively presented.

Shortcomings of Classical Approach

• Weber’s ideal bureaucracy suggested strict adherence to rules and regulations, this lead to redtapism in the organization.

• It offers a mechanistic framework that undermines the role of human factor. The classical writers ignored the social, psychological and motivational aspect of human behavior.

• The environmental dynamics and their effect on management have been discounted. Classical theory viewed organization as closed system i.e. having no interaction with environment.

• There is positive danger in relying too much on past experiences because a principle or technique found effective in the past may not fit a situation of the future.

• The classical principles are mostly based on the personal experience and limited observations of the practitioners. They are not based on personal experience.

• The totality of real situation can seldom be incorporated in a case study.

Neo-Classical or Human Relation Approach to Management

The criticism of the Scientific and Administrative Management as advocated by Taylor and Fayol, respectively, gave birth to Human Relation Approach. The behavioral scientists criticized the early management approaches for their insensitiveness to the human side of organization. The behavioral scientists did not view the employees mechanically in work situation, but tried to show that the employees not only have economic needs but also social and psychological needs like need for recognition, achievement, social contact, freedom, and respect. Human relations school regards business organization as a psycho-social system. Elton Mayo of Harvard and his associates conducted a famous study on human behavior at the Hawthorne plant of the Western Electric Company and this study formed the foundation of this school of management thoughts. The basic hypotheses of this study as well as the basic propositions of the Human Relation Approach are the following:

· The business organization is a social system.

· The employees not only have economic needs but also psychological needs and social needs, which are required to be served properly to motivate them.

· Employees prefer self-control and self-direction.

· Employee oriented democratic participative style of management is more effective than mechanistic task oriented management style.

· The informal group should be recognized and officially supported.

The human relations approach is concerned with recognition of the importance of human element in organizations. It revealed the importance f social and psychological factors in determining worker’s productivity and satisfaction. It is instrumental in creating a new image of man and the work place. However, this approach also did not go without criticism. It was criticized that the approach laid heavy emphasis on the human side as against the organizational needs. However, the contribution of this approach lies in the fact that it advises managers to attach importance to the human side of an organization.

Behavioral Approach to Management

Human Behavioral approach is a modified version of Human Relation approach. Human Behavioral approach is devoid of any emotional content, which is the core of Human Relation Approach. This approach stresses the individual performing the jobs. Here the attention is directed towards the human aspects of management. The neglect of human factor and the over emphasis on machines and materials led to the development of this approach. The Behavioral approach emphasizes synchronization of group goals within the broader framework of management. It does not consider the goals of the different groups as conflicting with others.

Many sociologists, psychologists and social psychologists have shown considerable interest in studying the problems of management. The sociologists who have contributed to management are Black, Selznick, Homans, Dubin, Dalton, and Katz and Kahn. The social psychologist who have contributed to management are McGregor, Argyris, Leavitt, Blake and Mouton, Sayles, Tannenbaum and his associates, Bennis, Fielder, Stogdill and Herzberg. The behavioral theories have drawn heavily on the work of Maslow. Douglas McGregor built on Maslow’s work in explaining his ‘Theory X’ and ‘Theory Y’. Frederick Herzberg develops a two factor theory of motivation. To sum up, many conclusions of the contributions made by behavioralists can presented as follows:

· People do not dislike work. If they have helped to establish objectives, they want to achieve them. In fact, job itself is a source of motivation and satisfaction to employees.

· Most people can exercise a great deal of self-direction and self-control than are required in their current job. Therefore, there remains untapped potential among them.

· The manager’s basic job is to use the untapped human potential in the service organization.

· The managers should create a healthy environment wherein all the subordinates contribute to the best of their capacity. Te environment should provide healthy, safe, comfortable and convenient place to work.

· The manager should provide for self direction by subordinates and they must be encouraged to participate fully in all important matters.

· Operating efficiency can be improved by expanding subordinate influence, direction and self control.

· Work satisfaction may improve as a byproduct of subordinates making use of their potential.

Merits of Behavioral Approach

It generated an awareness of the overwhelming role of the human element in organizations. It recognizes the quality of leadership as a critical factor in management success. It recognizes the role of individual psychology and group behavior in organizational effectiveness.

Shortcomings of Behavioral Approach

Conclusions of behavioral approach discounts theory and stress radical empiricism. This approach neglects the economic dimension of work satisfaction. It is group oriented and anti-individualistic.

Systems Approach to Management

In the 1960s, a new approach to management appeared which attempted to unify the earlier school of thoughts. This approach is commonly referred to as ‘System Approach’. The system approach is based on the generalization that an organization is a system and its components are inter-related and inter-dependent. “A system is composed of related and dependent elements which, when in interactions, form a unitary whole. On other words, a system may be defined as an organized and purposeful entity of inter-related, inter-dependent and inter-acting elements. It is a goal oriented organism that is composed of parts interrelated in such a way that the total system is greater than the sum of its parts. The elements of each system may themselves be sub systems. These sub-systems are functionally related to each other and to the total system. The basic postulates of the system approach are as follows:

· An organization is a system consisting of several subsystems. For example, in a business enterprise production, sales and other departments re the subsystem

· The position and function of each subsystem can be analyzed only in relation to other subsystem and to the organization as a whole rather than in isolation.

· An organization is a dynamic system because it is responsive or sensitive to its environment. It is vulnerable to changes in its environment.

Systems are of several types.

A static system, e.g. a petrol engine operates repetitively completing the same cycle of functions without change or deviation. On the other hand, the dynamic system, undergoes change, it grows or decays. Biological systems, e.g., plants, animals and human being are dynamic.

A closed system is self-dependent and does not have any interaction with the external environment. Physical and mechanical systems are closed systems. A closed system concentrates completely on internal relationships, i.e. interaction between sub-systems only. An open system approach recognizes the dynamic interaction of the system with its environment.

The open system consisting of four basic elements

· Inputs: These are ingredients required to initiate the transformation process. They include human, financial, material and information resources.

· Transformation Process: The inputs are put through a transformation process that applies technology, operating methodologies, administrative practices and control techniques in order to produce the output.

· Outputs: The output may be products and/or services, the sale of which creates profits or losses. This process also has by-product outputs such as worker behavior, information, environmental pollution, community services and so on.

· Feedback: A feedback loop is used to return the resultant environmental feedback to the system as inputs.

If the environment is satisfied with the output, business operations continue. If it is not, changes are initiated within the business systems so that requirements of the customers are fully met. This is how an open system responds to the forces of change in the environment.

Contingency or Situational Approach to Management

Another important approach which has arisen because of the inadequacy of the Quantitative, Behavioral and System Approach to management is the Contingency Approach. Pigors and Myers propagated this approach in 1950. Other contributors include Joan Woodward, Tom Burns, G. W. Stalker, Paul Lawrence, Jay Lorsch and James Thompson. They analyzed the relationship between organization and environment. They concluded that managers must keep the functioning of an organization in harmony with the needs of its members and the external forces. Management is situational and lies in identifying the important variables in a situation. The basic theme of contingency approach is that organizations have to cope with different situations in different ways. There cannot be particular management action which will be suitable for all situations. The management must keep the functioning of an organization in harmony with the needs of its members and the external forces.

According to Kast and Rosenzweig, “The contingency view seeks to understand the interrelationships within and among sub-system as well as between the organization and its environment and to define patterns of relationships or configurations of variables. Contingency views are ultimately directed towards suggesting organizational designs and managerial actions most appropriate for specific situations”.

The approach has been used in important sub systems of management like organization, design, leadership, behavior change and operation. The main features of contingency approach are:

· Management is entirely situational. The application and effectiveness of any techniques is contingent on the situation.

· Management action is contingent on certain action outside the system or subsystem as the case may be.

· Management should, therefore, match or fit its approach to the requirements of the particular situation. To be effective management policies and practices must respond to environmental changes.

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

· Management should understand that there is no one hard way to manage. They must not consider management principles and techniques universal.

A general framework for contingent management has been shown in the Figure-1.3. However, it is an abstract depiction of the contingency model. In order to operationalise the contingency approach, managers need to know the alternatives for different situations. It may be operationalised as an ‘if then’ approach to management. The environment (If) is an independent variable whereas management (when) is a dependent variable. In this model, a manager has to take four sequential steps:

· Analyze and understand the situation,

· Examine the applicability or validity of different principles and techniques to the situation at hand,

· Make the right choice by matching the techniques to the situations

· Implement the choice.

Table-: System Approach vs. Contingency Approach

Systems Approach	Contingency Approach
It treats all organizations alike irrespective of their size, cultural settings and dynamics	It treats each organization as a unique entity.
It stresses interactions and interdependencies among systems and sub- systems.	It identifies the exact nature of inter dependencies and their impact on organizational design and managerial style.
It studies organization at an abstract and philosophical level.	It is more oriented.	down	to	earth	and	action
It is neutral or non-committal on the validity of classical principles of management.	It firmly rejects the blind application of principles regardless of realities of individual situations.
It stresses upon the synergetic effect of organizations and the external input.	It is related to organization structure and design to the environment.
It is vague and complex.	It is pragmatic and action oriented.