1.

1 Introduction to Management, principles, Functions and Challenges

**Introduction to Management**
Management is the process of planning, organizing, leading, and controlling resources to achieve
organizational goals effectively and efficiently. It involves coordinating the efforts of people and
other resources to accomplish desired outcomes in a dynamic and ever-changing environment.
**Key Concepts in Management:**
1. **Organizational Goals**: Management begins with setting clear and achievable objectives
that reflect the organization's mission, vision, and values. These goals provide direction and
purpose, guiding decision-making and resource allocation.
2. **Functions of Management**: The functions of management—planning, organizing, leading,
and controlling—provide a framework for managerial activities. Planning involves setting goals
and developing strategies, organizing involves structuring resources and establishing
coordination mechanisms, leading involves motivating and guiding employees, and controlling
involves monitoring performance and taking corrective actions.
3. **Levels of Management**: Management occurs at different levels within an organization,
including top-level, middle-level, and frontline managers. Top-level managers are responsible for
setting overall strategic direction, middle-level managers implement plans and policies, and
frontline managers oversee day-to-day operations and supervise employees.
4. **Managerial Roles**: Managers perform various roles to fulfill their responsibilities
effectively. These roles, identified by Henry Mintzberg, include interpersonal roles (figurehead,
leader, liaison), informational roles (monitor, disseminator, spokesperson), and decisional roles
(entrepreneur, disturbance handler, resource allocator, negotiator).
5. **Management Skills**: Effective managers possess a combination of technical, conceptual,
and interpersonal skills. Technical skills involve expertise in a specific area or field, conceptual
skills involve the ability to think strategically and understand complex relationships, and
interpersonal skills involve communication, leadership, and conflict resolution abilities.
6. **Management Theories**: Management theories provide frameworks for understanding and
improving managerial practices. Classical management theories, such as scientific management
and administrative management, focused on optimizing organizational efficiency and structure.
Behavioral management theories emphasized understanding human behavior and motivation in
the workplace. Modern management theories, such as systems theory and contingency theory,
consider the dynamic and complex nature of organizations and management practices.
7. **Challenges and Opportunities**: Managers face various challenges, including globalization,
technological advancements, workforce diversity, and ethical dilemmas. However, these
challenges also present opportunities for innovation, growth, and organizational development.
**Conclusion:**

In conclusion, management plays a critical role in achieving organizational success by planning,

organizing, leading, and controlling resources effectively. By understanding key concepts, roles,
skills, theories, and challenges in management, individuals can develop the knowledge and
abilities necessary to excel in managerial roles and contribute to the achievement of
organizational goals.

Sure, let's delve into the functions of management in detail. Management involves various
functions that are essential for achieving organizational goals effectively and efficiently. These
functions are often classified into four main categories:

1. **Planning**:
- **Definition**: Planning involves setting objectives, identifying strategies, and developing
action plans to achieve organizational goals.
- **Key Activities**:
- Setting Objectives: Managers define specific, measurable, achievable, relevant, and time-
bound (SMART) objectives that align with the organization's mission and vision.
- Formulating Strategies: Managers analyze internal and external factors to develop strategies
for allocating resources and achieving objectives.
- Developing Action Plans: Managers create detailed plans outlining tasks, timelines, and
resources required to implement strategies and achieve objectives.

2. **Organizing**:
- **Definition**: Organizing involves structuring resources, allocating responsibilities, and
establishing coordination mechanisms to facilitate goal attainment.
- **Key Activities**:
 - Designing Organizational Structure: Managers determine the division of labor, hierarchy of
authority, and communication channels within the organization.
- Allocating Resources: Managers allocate human, financial, and material resources
effectively to support the execution of plans.
- Establishing Coordination: Managers establish systems and processes to ensure coordination
and collaboration among individuals and departments towards common goals.

3. **Leading**:
- **Definition**: Leading involves motivating, inspiring, and influencing employees to
achieve organizational objectives.
- **Key Activities**:
- Motivating Employees: Managers use various motivational techniques, such as recognition,
rewards, and empowerment, to inspire employees to perform at their best.
- Communicating Vision: Managers communicate the organization's vision, values, and goals
to employees, providing clarity and direction.
- Providing Leadership: Managers demonstrate effective leadership by setting examples,
making decisions, and resolving conflicts to guide teams towards success.

4. **Controlling**:
- **Definition**: Controlling involves monitoring performance, comparing it with established
standards, and taking corrective actions as necessary to ensure goal attainment.
- **Key Activities**:
- Establishing Performance Standards: Managers set benchmarks or standards against which
actual performance is measured.
- Monitoring Performance: Managers collect data, analyze results, and track progress towards
goals to identify deviations and areas for improvement.
- Taking Corrective Actions: Managers take corrective actions, such as revising plans,
reallocating resources, or providing additional training, to address performance gaps and ensure
alignment with objectives.
These functions of management are interrelated and interdependent, forming a continuous cycle
of activities aimed at achieving organizational success. Effective management requires a balance
of all four functions, tailored to the specific needs and context of the organization.

व्यवस्थापनका सिद्धान्त र नेपालका सार्वजनिक संगठनहरूमा तिनको कार्यान्वयनको अवस्था बारे

उदाहरणसहित प्रकाशन पार्नुहोस। 10 marks 2079/12/12 7th level

Certainly! Here are some key principles of management along with examples of their
implementation in public organizations in Nepal:

1. **Unity of Command**: This principle suggests that an employee should receive orders from
only one superior to avoid confusion and conflicting instructions. In Nepalese public
organizations, this principle ensures clear lines of authority. For example, in the Ministry of
Finance, each department head reports directly to the Minister of Finance, ensuring that
directives are clear and consistent.

2. **Division of Work**: This principle emphasizes breaking down tasks into smaller,
manageable components to increase efficiency and specialization. In Nepal's public sector, this
principle is evident in various government agencies where different departments handle specific
functions. For instance, the Department of Education focuses on educational policies and
programs, while the Department of Health oversees healthcare services.

3. **Scalar Chain**: The scalar chain principle suggests that there should be a clear line of
authority from the highest to the lowest ranks in the organization. In Nepalese public
organizations, this ensures smooth communication and decision-making processes. For instance,
in the Nepal Police Force, instructions flow from the Chief of Police down to the district level,
ensuring alignment with organizational goals and strategies.

4. **Centralization and Decentralization**: These principles deal with the distribution of

authority within an organization. In Nepal's public sector, certain functions may be centralized at
the federal level for consistency and coordination, while others are decentralized to regional or
local authorities for more effective implementation. For example, while national policies on
environmental protection may be formulated by the Ministry of Forest and Environment, local
enforcement and monitoring activities may be decentralized to municipal authorities.
5. **Equity**: This principle emphasizes fairness and justice in dealing with employees and
stakeholders. In Nepalese public organizations, equity is crucial for maintaining trust and
credibility. For instance, in the allocation of government resources for infrastructure
development projects, ensuring equitable distribution across different regions helps address
socio-economic disparities.

6. **Order**: The principle of order involves organizing resources and activities in the most
efficient manner. In Nepal's public organizations, maintaining order ensures smooth functioning
and resource optimization. For example, the Ministry of physical infrastructure and
Transportation prioritizes road construction projects based on traffic volume and strategic
importance to ensure optimal use of funds and resources.

7. **Initiative**: Encouraging employees to take initiative and be proactive is essential for

innovation and growth. In Nepalese public organizations, fostering a culture of initiative can lead
to improvements in service delivery and problem-solving. For instance, the Department of Urban
Development and building construction may empower local municipalities to propose and
implement innovative solutions to address urban infrastructure challenges.

8. **Unity of Direction**: This principle advocates for aligning organizational activities towards
common goals. In Nepal's public sector, unity of direction ensures coordination and coherence in
policy implementation. For example, when implementing a national poverty alleviation program,
various government agencies collaborate to ensure that their efforts are synergistic and contribute
to the overarching goal of poverty reduction.

9.Discipline: Discipline ensures adherence to rules and regulations, promoting orderliness and
professionalism within the organization. In Nepalese public organizations, disciplinary measures
are essential for maintaining accountability and performance standards. For example, the Civil
Service Act of Nepal outlines disciplinary procedures for government employees who violate
code of conduct or fail to fulfill their duties.

10.Remuneration: Fair and competitive compensation packages are crucial for attracting and
retaining talent in public organizations. In Nepal, the government sets salary structures and
benefits for civil servants to ensure equitable remuneration across different levels and positions.
This helps motivate employees and enhance productivity.
11.Stability of Tenure of Personnel: Providing job security and stability to employees fosters
loyalty and commitment, reducing turnover and recruitment costs. In Nepal's public sector, civil
service regulations provide tenure protections to employees, ensuring stability and continuity in
service delivery even amidst political transitions or administrative changes.

12.Subordination of Individual Interest to the General Interest: This principle emphasizes

prioritizing organizational goals over individual interests. In Nepalese public organizations,
officials are expected to make decisions that benefit the public welfare rather than serving
personal agendas. For example, in the Ministry of Health, policymakers prioritize public health
initiatives over individual career advancements.
These principles serve as guiding principles for effective management in public organizations in
Nepal, helping them achieve their objectives efficiently and responsibly.

व्यवस्थापनको विकासक्रममा प्रतिपादन भएका सिद्धान्तहरु छोटकरीमा चर्चा गर्नुहोस्। ५

The development of management principles has been influenced by various theories and
philosophies over time. Here's a brief overview of some key principles involved in the
development of management:
Scientific Management Theory: Developed by Frederick Taylor in the late 19th and early 20th
centuries, scientific management focuses on optimizing work processes to increase efficiency
and productivity. Key principles include time and motion studies to analyze work methods,
standardization and specialization to ensure consistency, scientific selection and training of
workers, incentive systems to motivate employees, and functional foremanship for streamlined
supervision.
1. **Classical Management Theory**: Developed in the late 19th and early 20th centuries,
classical management theory emphasizes principles such as division of labor, unity of command,
scalar chain, and centralization. Scholars like Henri Fayol and Frederick Taylor laid the
foundation for principles like bureaucratic organization, scientific management, and
administrative management.

2. **Behavioral Management Theory**: Emerging in the early to mid-20th century, behavioral

management theory focused on understanding human behavior in the workplace. This approach
emphasized the importance of motivation, leadership styles, and employee satisfaction. Notable
contributors include Elton Mayo and Douglas McGregor, who introduced concepts like the
Hawthorne Studies and Theory X and Theory Y.
3. **Systems Theory**: Systems theory views organizations as complex systems composed of
interconnected parts working together to achieve common goals. This principle emphasizes the
interdependence of various elements within an organization and the need for holistic
management approaches. Scholars like Ludwig von Bertalanffy and Peter Senge have
contributed to the development of systems thinking in management.

4. **Contingency Theory**: Contingency theory suggests that there is no one-size-fits-all

approach to management, and the most effective management style or strategy depends on the
unique circumstances or contingencies facing an organization. This principle highlights the
importance of flexibility and adaptation in management practices. Scholars such as Joan
Woodward and Paul Lawrence have contributed to the understanding of contingency theory.

5. **Total Quality Management (TQM)**: Total Quality Management emphasizes continuous

improvement, customer focus, and employee involvement in all aspects of organizational
operations. This principle aims to enhance product and service quality by empowering
employees and promoting a culture of excellence. Quality gurus like W. Edwards Deming and
Joseph Juran have significantly influenced TQM principles.

6. **Strategic Management**: Strategic management involves the formulation and

implementation of long-term goals and initiatives to achieve organizational success. This
principle emphasizes the importance of strategic planning, environmental scanning, and resource
allocation to gain a competitive advantage. Scholars like Michael Porter and Igor Ansoff have
contributed to strategic management theory.

These principles have evolved and intersected over time, shaping modern management practices
and providing frameworks for organizational leaders to navigate challenges and opportunities
effectively.

Certainly! Here are 12 challenges commonly faced in management:

1. **Globalization**: Managing operations across diverse geographical locations presents

challenges in terms of cultural differences, legal requirements, and logistical complexities.
2. **Technological Changes**: Keeping up with rapid technological advancements requires
managers to adapt processes, train employees, and integrate new tools effectively.

3. **Workforce Diversity**: Managing a diverse workforce with varying backgrounds, skills,

and perspectives requires fostering inclusivity, communication, and conflict resolution skills.

4. **Employee Engagement**: Maintaining high levels of employee motivation and engagement

is essential for productivity and retention, requiring managers to create a positive work
environment and provide opportunities for growth.

5. **Change Management**: Implementing organizational changes such as restructuring,

mergers, or new technologies often face resistance and require effective communication,
planning, and stakeholder buy-in.

6. **Risk Management**: Identifying, assessing, and mitigating risks such as financial,

operational, or reputational risks is crucial for organizational sustainability and requires proactive
management strategies.

7. **Leadership Development**: Developing effective leaders who can inspire, motivate, and
guide teams towards achieving organizational goals is a continuous challenge that requires
investment in training and development programs.

8. **Work-Life Balance**: Balancing the demands of work with personal life is essential for
employee well-being and productivity, requiring managers to promote flexibility and support
initiatives that enhance work-life balance.

9. **Ethical Dilemmas**: Navigating ethical challenges such as conflicts of interest, corporate

social responsibility, and fair treatment of stakeholders requires managers to uphold ethical
standards and make decisions with integrity.
10. **Supply Chain Management**: Managing complex supply chains involves coordinating
multiple stakeholders, optimizing inventory levels, and mitigating disruptions, requiring
managers to adopt efficient supply chain management practices.

11. **Talent Management**: Attracting, retaining, and developing top talent is crucial for
organizational success and requires managers to create a supportive culture, provide career
development opportunities, and offer competitive compensation packages.

12. **Sustainability**: Addressing environmental concerns, social impact, and corporate

sustainability is increasingly important for organizations, requiring managers to integrate
sustainability principles into business strategies and operations.

These challenges require managers to possess a diverse set of skills, including communication,
problem-solving, adaptability, and strategic thinking, to effectively navigate and overcome them.
Introduction
Management of 5M's = Men, Money, Materials, Machine, Method

Functional concept: Management is the function of planning, organizing, leading controlling that
means performing managerial functions in an efficient way.
Leadership concept: Management is the process of art of influencing others (organizational
members) to achieve organizational goals.)
"Management is a set of activities including planning, organizing, leading and controlling)
directed at an organization's resources (human, financial, physical and information), with the aim
of achieving organizational goal effectively and efficiently in a changing environment" -Ricky
W. Griffin
The basic characteristics of management can be mentioned as follows.

 Management is science as well as art.

 This is a process.
 This is a study subject (discipline).
 It is work oriented.
 It is universal.
 It involves a group effort.
 It increases human capacity.
 It is also considered Art of possibility and the art of acceptability.
 This is a profession.
 It is also a multidimensional and multidisciplinary subject.

Characteristics of management

 It has certain goals and objectives.

 It is an ongoing process.
 This is a group task.
 A variety of resources are combined.
 It has certain methods, processes, ways, styles.
 Management directs the available resources to the target.
 It is multiplanary.
 It is a task-oriented and human-oriented system.
 This is an integrated process.
 This is necessary at all levels of the organization.
 It plans, organizes, orders, coordinates, controls.
 It is an art as well as a science.
 Various theories have been proposed.
 It is a mechanism that changes according to the situation.
 This is a comprehensive concept.
 It emphasizes the results.
 This is a group effort
 It is both public and private.

Principles of Management
Theory of Management

Contemporary theories of management tend to account for and help interpret the rapidly
changing nature of today’s organizational environments.

Important management theories which are broadly classified as follows:

The Scientific Management School comprising the works of Frederick W.

Taylor and Lillian Gilbreth’s motion study, among others.

The Classical Organizational Theory School comprising the works of Henri Fayol’s views on
administration, and Max Weber’s idealized bureaucracy, among others.

Behavioral School comprising the work of Elton Mayo and his associates; the Management
Science School.

Recent Developments in Management Theory comprising works such as Systems Approach,

Situational or Contingency theory, Chaos theory, and Team Building approach.

Scientific Management School

The first management theory is what is popularly referred to as Frederick

Taylor’s Scientific Management. Frederick Taylor started the era of modern
management. Taylor consistently sought to overthrow management “by rule of thumb” and
replace it with actual timed observations leading to “the one best” practice. He also advocated
the systematic training of workers in “the one best practice” rather than allowing them personal
discretion in their tasks. He further believed that the workload would be evenly shared between
the workers and management with management performing the science and instruction and the
workers performing the labor, each group doing “the work for which it was best suited”.

Taylor’s strongest positive legacy was the concept of breaking a complex task down into a
number of subtasks, and optimizing the performance of the subtasks; hence, his stop-watch
measured time trials. However, many critics, both historical and contemporary, have pointed out
that Taylor’s theories tend to “dehumanize” the workers.

Taylor’s postulations were strongly influenced by his social/historical period (1856-1917) during
the Industrial Revolution; it was a period of autocratic management that saw Taylor turning to
“science” (hence, his principles of scientific management) as a solution to the inefficiencies and
injustices of the period. It has to be acknowledged that from an economic standpoint, Taylorism
was an extreme success. Application of his methods yielded significant improvements in
productivity.

Henceforth, Taylor proposed four great underlying principles of Management.

1. There is need to develop a ‘science of work’ to replace old rule-of-thumb methods: pay
and other rewards linked to achievement of ‘optimum goals’ – measures of work
 performance and output; failure to achieve these would in contrast result in loss of
earnings.

2. Workers to be ‘scientifically’ selected and developed: training each to be ‘first-class’ at

some specific task.

3. The ‘science of work’ to be brought together with scientifically selected and trained
people to achieve the best results.

4. Work and responsibility to be divided equally between workers and management

cooperating together in close interdependence.

CHARACTERISTICS OF SCIENTIFIC MANAGEMENT

• Maximum utilization of efforts that is eliminating waste

• Emphasis on fitting workers to particular tasks and training them further to best utilize
their abilities
• Specialization of activities, with proper design of jobs
• Establishment of standards of performance
• The role of compensation and other incentives for increase in productivity.

Criticisms of Scientific management

• It promotes individualism rather than team spirit because of the competitive nature of
work. i.e. more work, more pay
• Specialization makes the worker unfit for other types of jobs.
• It ignores or excludes the average workers, because of tough competition to be more
efficient and productive
• Specialization makes work repetitive and monotonous
• It is anti-democratic. ie it separate the manager form the worker. – manager has the right
to manage and worker has the duty to work.

Alongside Taylor’s postulates is Gilbreth’s motion study. The ultimate result of this study led to
the centrality of efficiency in organizations. Gilbreth was
particularly interested in how he could reduce the unnecessary motions resulting from
bricklaying at a construction site; he succeeded in reducing the motions from 18 to 4. He then
proposed that each worker should be involved in doing his or her own work, prepare for the next
higher level, and training their successors.

Classical Organizational Theory School

In this category of management theory are the works of Max Weber’s

bureaucratic theory and Henri Fayol’s administrative theory. Weber believed that civilization
was changing to seek technically optimal results at the expense of emotional or humanistic
content.

Weber then developed a set of principles for an “ideal” bureaucracy as follows:

 Fixed and official jurisdictional areas,
 A firmly ordered hierarchy of super and subordination,
 Management based on written records,
 Thorough and expert training,
 Official activity taking priority over other activities
 Management of a given organization follows stable, knowable rules.

CHARATERISTICS OF WEBER’S BUREAUCRACY

• Division of labour
• Hierarchy of authority
• System of rules and regulations
• Strict procedures for dealing with work situations
• Impersonal relations between people
• Selection and promotions based on technical competences.

Benefits of bureaucracy

• Set policies and procedures leads to consistency in employee behavior.

• Clearly defined jobs, duties and responsibilities eliminates overlapping and role conflicts
• Hiring and promotions are based on merit and expertise.
• Division of labor makes the workers specialists
• Organizations continue even if individuals leave.

Demerits of bureaucracy

• There is too much red tape and paper work

• Impersonal nature of work leads to lack of commitments on the part of employees.
• Excessive rules and regulations stifles initiative
• Employees become used to routine work which lead to resistance to change

The bureaucracy was envisioned as a large machine for attaining its goals in the most efficient
manner possible. However, Weber was cautious of bureaucracy when he observed that the more
fully realized, the more bureaucracy “depersonalizes” itself – i.e., the more completely it
succeeds in achieving the exclusion of love, hatred, and every purely personal, especially
irrational and incalculable, feeling from execution of official tasks. Hence, Weber predicted a
completely impersonal organization with little human level interaction between its members.
Henri Fayol’s administrative theory mainly focuses on the personal duties of management at a
much more granular level. In other words, his work is more directed at the management layer.
Fayol believed that management had five principle roles:

 to forecast and plan,

 to organize,
 to command,
 to co-ordinate, and
 to control.

Forecasting and planning was the act of anticipating the future

and acting accordingly. Organization is the development of the institution’s resources, both
material and human. Commanding was keeping the institution’s actions and processes running.
Co-ordination was the alignment and harmonization of the group’s efforts. Finally, control meant
that the above activities were performed in accordance with appropriate rules and procedures.

Fayol developed fourteen principles of administration to go along with

management’s five primary roles.

These principles are:

1. specialization/division of labor
2. authority with responsibility
3. discipline
4. unity of command
5. unity of direction
6. subordination of individual interest to the general interest,
7. remuneration of staff
8. centralization
9. scalar chain/line of authority
10. order
11. equity
12. stability of tenure,
13. initiative and
14. Esprit de corps.

Fayol clearly believed personal effort and team dynamics were part of an “ideal” organization.
Fayol’s five principle roles (Plan, Organize, Command, Co-ordinate, and Control) of
management are still actively practiced today.

The concept of giving appropriate authority with responsibility is also widely commented on and
is well practiced. Unfortunately, his principles of “unity of command” and “unity of direction”
are consistently violated in “matrix management”, the structure of choice for many of today’s
companies.
Behavioral School

The key scholar under this category is Elton Mayo. The origin of behaviorism is the human
relations movement that was a result of the Hawthorne Works Experiment carried out at the
Western Electric Company, in the United States of America that started in the early 1920s (1927-
32). Elton Mayo and his associates’ experiments disproved Taylor’s beliefs that science dictated
that the highest productivity was found in ‘the one best way’ and that way could be obtained by
controlled experiment.

THE EXPERIMENTS

• There were four main phases of the Hawthorne experiments :

– The illuminations experiments
– The relay assembly test room
– The interviewing programme
– The bank wiring observation room

1. The Hawthorne studies attempted to determine the effects of lighting on worker

productivity. When these experiments showed no clear correlation between light
level and productivity the experiments then started looking at other factors.

2. These factors that were considered when Mayo was working with a group of
women included rest breaks, no rest breaks, no free meals, more hours in the
work-day/work-week or fewer hours in the workday/ work-week. With each of
these changes, productivity went up. When the women were put back to their
original hours and conditions, they set a productivity record.

3. The workers were interviewed in attempt to validate the Hawthorne Studies. The
participants were asked about supervisory practices and employee morale. The
results proved that upward communication in an organisation creates a positive
attitude in the work environment. The workers feel pleased that their ideas are
being heard.

4. The purpose of the next study was to find out how payment incentives would
affect productivity. The surprising result was that productivity actually decreased.
Workers apparently had become suspicious that their productivity may have been
boosted to justify firing some of the workers later on. A group of fourteen men
who put together telephone switching equipment. The researchers found that
although the workers were paid according to individual productivity, productivity
decreased because the men were afraid that the company would lower the base
rate. Detailed observation between the men revealed the existence of informal
groups or "cliques" within the formal groups. These cliques developed informal
rules of behavior as well as mechanisms to enforce them. The cliques served to
control group members and to manage bosses; when bosses asked questions,
clique members gave the same responses, even if they were untrue. These results
 show that workers were more responsive to the social force of their peer groups
than to the control and incentives of management.

These experiments proved five things.

1. work satisfaction and hence performance is basically not economic – depends more on
working conditions and attitudes - communications, positive management response and
encouragement, working environment.

2. it rejected Taylorism and its emphasis on employee self-interest and the claimed over-
riding incentive of monetary rewards.

3. large-scale experiments involving over 20,000 employees showed highly positive

responses to, for example, improvements in working environments (e.g., improved
lighting, new welfare/rest facilities), and expressions of thanks and encouragement as
opposed to coercion from managers and supervisors.

4. the influence of the peer group is very high – hence, the importance of informal groups
within the workplace.

5. it denounced ‘rabble hypotheses’ that society is a horde of unorganized individuals

(acting) in a manner calculated to secure his or her self-preservation or self-interest.

These results showed that the group dynamics and social makeup of an
organization were an extremely important force either for or against higher
productivity. This outcome caused the call for greater participation for the
workers, greater trust and openness in the working environment, and a greater attention to teams
and groups in the work place.

Finally, while Taylor’s impacts were the establishment of the industrial engineering, quality
control and personnel departments, the human relations movement’s greatest impact came in
what the organization’s leadership and personnel department were doing. The seemingly new
concepts of “group dynamics”, “teamwork”, and organizational
“social systems”, all stem from Mayo’s work in the mid-1920s.
Recent Developments in Management Theory

Under this category of theory are the Systems Approach, Situational or Contingency theory,
Chaos theory, and Team Building theory.

THE SYSTEMS APPROACH TO MANAGEMENT

In 1951, Ludwig von Bertalanffy, a celebrated biologist, had introduced the notion of an “open
system” as part of his General Systems Theory to analyze the relationship of organisms to
their environment.
His idea was borrowed by management scientists, such as Stafford Beer and Kenneth Boulding,
to try and make more sense of the business organisation as an open system interacting with the
environment, to which it was either well or poorly fitted.

The systems approach enables managers to think of the organization as containing sub-systems,
such as departments and functions, as well as itself being part of a much larger system, including
the environment from which it draws its resources and to which it offers its products and
services.

The idea is that each part of the total system interacts with all the other parts and that the
performance of the whole can only be understood in terms of the interactions of the parts.

OPEN SYSTEMS AND CLOSED SYSTEMS

A closed system is a set of interacting elements without any interaction with the outside
environment. It has no input from outside in any form

An open system is the one that is dependent on the outside environment for survival. All
organizational systems are open systems as they always depend on the outside environment for
feedback and resources and for disposal of the finished product. All organizations transform the
inputs into output of finished goods and services.

USEFULNESS OF THE SYSTEMS THEORY

 It focuses attention on the vast and diverse factors that influence even the most simple
human behavior.
 It highlights the role played by different systems in facilitating or inhibiting behavioral
change.
 It allowed for the recognition that social systems can change and adapt to their
environment.
o This is done by constant exchange of energy from without and within the system
and a continuous reorganization into more complex forms

The effect of systems theory in management is that it helps managers to look at the organization
more broadly. It has also enabled managers to interpret patterns and events in the workplace ie,
by enabling managers to recognize the various parts of the organization, and, in particular, the
interrelations of the parts.

situational or contingency theory

The situational or contingency theory asserts that when managers make a decision, they must
take into account all aspects of the current situation and act on those aspects that are key to the
situation at hand. Basically, it is the approach that "it depends". For example, if one is leading
troops in Iraq, an autocratic style is probably best. If one is leading a hospital or University, a
more participative and facilitative leadership style is probably best.

Chaos theory

The Chaos theory is advocated by Tom Peters (1942). As chaotic and random as global events
seem today, they are equally chaotic in organizations. Yet for many decades, managers have
acted on the basis that organizational events can always be controlled. Thus, a new theory,
known as chaos theory, has emerged to recognize that events are rarely controlled. Chaos
theorists suggest that systems naturally go to more complexity, and as they do so, they become
more volatile and must, therefore, expend more energy to maintain that complexity. As they
expend more energy, they seek more structure to maintain stability. This trend continues until the
system splits, combines with another complex system or falls apart entirely. It will need an
effective manager for the latter worst scenario not to happen

The last management theory is the Team Building approach or theory. This theory emphasizes
quality circles, best practices, and continuous improvement. It is a theory that mainly hinges on
reliance on teamwork. It also emphasizes flattening of management pyramid, and reducing the
levels of hierarchy,

Finally, it is all about consensus management ie., involving more people at all levels in decision-
making.
Nibha miss

1.Management: Concept, Principles & Functions

Concept of Management

Management is the science of directing available resources to achieve goals with efficiency and
effectiveness.

Management is the heart of organization operations. It teaches to do things through coordinated

use of tools (Gets the job done).

Management works with people and by people.

Management carries out the functions of planning, organizing, managing human resources,
leading and controlling.

Achieves organizational goals by performing tasks efficiently and effectively.

"Management is the art of getting things done through people." - Mary Parker Follet (1919)
"To manage is the forecast and plan, to organize, to command, to co-ordinate and to control" -
Henry Fayol

"Management means to make efficient use of resources and to get people and other resources to
work harmoniously together in order to achieve objectives."-Kast and Rosenzweig (1974)

"Management is the process of planning, organizing, leading and controlling an organization's

human, financial, physical and information resources to achieve organizational goals in an
efficient and effective manner. "-Ricky W. Griffin (2000)

Among the above scholarly definitions, the definition given by Griffin is more practical and easy
to understand. He has taken management as a process. Management is the process of planning,
organizing, leading and controlling the existing human resources, financial resources, material
resources and information resources in the organization to achieve the goals of the organization
effectively and efficiently.

Principles of Management

Principles guide the practical aspects of management. They are based on management functions.
These are considered universal. Their use is universal. Principles of management have been
developed to facilitate, guide and simplify managerial work methods.

The main principles of management are as follows:

1. Theory of Division of Labor

Under this, the work to be done by each person and group is separated. By working with this
system, a lot of work can be done quickly and at a low cost. This leads to specialization in work.

2.Management by objectives

While running any organization, it is important to identify its larger purpose. Any ambiguity or
lack of clarity in the objectives creates problems for the managers and can lead to bad results in
the end.

3.Principle of Substitution of Means

Some items in daily life seem so rare that they tend to become more and more expensive. People
use less of these expensive items and save resources. This gives rise to the principle of
substitution of means. Labor substitution can be taken for example.

4. Span of control
According to this theory, a supervisor can effectively control only a limited number of people.
The organizational structure should reflect this. A manager must have a fixed number of
employees to supervise.

5. Unit of command
According to this principle, an employee should receive orders from only one superior. That is,
one employee should not have two supervisors or bosses.

6. Unity of direction

According to this principle, there should be a single plan for activities with the same objective.
Must be directed by one superior.

7. Balance of authority and responsibility

According to this principle, rights should flow from responsibilities. Responsibility without
rights does not work. Rights and responsibilities are interconnected. There should be a balance
between these two.

8. Superiority of Organizational Interest

According to this theory, the interest of the organization should be higher than the individual
interest. Individual goals should not be incompatible with organizational goals. The collective
interest of the organization should be paramount.

9. Principle of discipline

According to this theory, discipline is indispensable for the functioning of an organization. It

should be maintained by the administrators. Contracts and regulations must be followed.

10. Principle of Contingency Management

According to this principle, the problems encountered in daily work should be solved by the
employees at their own level. Only exceptional problems beyond their jurisdiction should be
referred to higher levels for resolution.

11. Theory of Supportive Relationship

According to this theory, managers should establish supportive relationships with subordinates.
Employees should be given social, psychological and moral support. Employees should be
instilled with a sense of dignity and self-respect.

Theory of management

Theory of Management

1. Scientific management theory

  Propounded by F.W. Taylor
 Wages and financial facilities are needed to increase efficiency and production.
 It seeks a proper scientific way of doing things. It emphasizes on scientific selection and
development of workers.
 Searched for one best way based on Time & Motion study.

2. Administrative theory

 Propounded by Henry Fayol.

 It covers the management of the entire organization without paying attention to the
human aspect only.
 14 principles of management were propounded by this principle.

3. Bureaucracy theory

 Propounded by Max Weber.

 Bureaucracy envisages a rule-bound, law-abiding, merit-based, procedural, apolitical
character.
 Emphasis is placed on production and productivity.

4. Human relation theory

 This is a theory propounded by Elton Mayo.

 This theory is based on experimental tests.
 According to Mayo, the organization was guided by informal groups
 It strengthens the relationship between employees and management
 Abraham Maslow, Herzberg, M. C. Grager have brought motivation principles based on
this principle.

5. System theory

 This is a theory propounded by Talkot parson.

 This theory compares management to the human body where it is seen as an input,
conversion machine and output machine.

6. Principles of Participatory Management

 This is a theory propounded by Rensis Linkert.

 According to this principle, it is said that any principle in management cannot be applied
in any situation, so it should be done according to the situation.

 Size of the organization

 Level of administration
 Ambiguity and complexity of work
  Individual differences
 environmental variation

Functions of management
Henry Fayol= POCCC ( Planning. Organizing, Commanding, Controlling and Coordinating)

Harold and Knootz= POSLC( Planning, Organizing, Staffing, Leading and Controlling)

George R Terry= POSC (Planning. Organizing, Staffing, Controlling)

Luther Gullick= (Planning, Organizing, Staffing. Directing, Coordinating, Reporting.

Budgeting.)

The main functions of management are as follows:

1. Planning

2. Organizing

3. Staffing

4. leading

5. controlling

1.Planning
Process of determining mission, goals and targets and the activities necessary to achieve them".
Formulating a plan is the first task of a manager. No action can be carried out without planning.
This sets the target. In fact, planning is the organization's future thinking. The main objective of
planning is to achieve the goals by making efficient and maximum use of the organization's
means and resources. Basically the plan can be divided into 2 levels:

2. Organizing

 "It involves execution of activities, allocation of resources and processing information."

 It creates an organizational structure.
 Identifying the tasks to be done to achieve the goal.
 Departmentalization
 Divides work into positions and specifies authority and responsibility for each position.
 Coordinating mechanism
 Availability of human and other materials
 Organizational structure
 Human Resource Management
 Division of work
 Assignment of responsibility
  Work rules
 commitment
 co-ordination

3. Staffing

Management selects the required personnel for organizational positions. Selects appropriate
persons with specified qualifications and competencies for each position.

 Manpower planning

 Recruitment and selection

 Development

 Utilization

 Maintenance

4. leading

The leadership makes all employees work together to achieve the goal. In the main functions
under leadership
 Directing
 Supervising
 motivating
 Communicating
 Creating conducive environment to superior performance.
 The outcome of leading is a high level of motivation and commitment among staff
members.

5. controlling

It involves the evaluation of operating results as compared to the establish standards. By this, the
performance is monitored and measured and corrective steps are taken. These steps focus on
achieving the goal. Areas that require control include sales, costs, profits, output, quality,
accidents, labor relations, employee morale, etc.

Process of control

1.Establish standards

2. Communicate Standards

3. Measuring performance
4. Analyze deviations

5. Corrective actions

Taylor's Scientific Management: Principles and limitations

Frederick Winslow Taylor (1856-1915) is known as the father of scientific management.

He propounded the principles of scientific management as a result of intensive research of

industrial activities in various fields.

F. W. Taylor was born in 1856 in Philadelphia USA. He started his career in 1871 as an operator
in a small machine factory and after 3 years he started working as an apprentice carpenter in a
hydraulic factory where he worked until 1874.

He joined the Midvale Steel Company as a machine shop worker and was promoted to the
position of Chief Engineer at the age of 28.

He also held the charge of management in Bethlehem Steel Company till 1901.

Even after retiring from his service, F. W. Taylor devoted his time to propounding the principles
of scientific management based on long experience.

Throughout his career, Taylor focused on how to increase labor productivity without putting
undue pressure on workers. He presented a new philosophy regarding increasing the productivity
of workers which is called scientific management.

Scientific management is concerned with:

 Scientific research and examination of each business unit,

 Scientific research and examination of business related statistics,
 Scientific study of different methods of working,
 Scientific recruitment, selection, placement and training of workers,
 Development of a suitable method for performance,
 Alignment of workers' wages with production.

Principles of Scientific Management

Father of scientific management F. W. Taylor concentrated all his efforts on replacing the
traditional rule of thumb with the modern scientific method based on investment, analysis and
measurement. The philosophy of scientific management presented by him is based on the
following principles:

1. Science, not rule of thumb

According to this theory, scientific management is based on scientific experiments and research
which replaces traditional rules.

It emphasizes observation, analysis and experimental work. According to this principle, all
professional work should be divided into different sections and each section of work should be
given a certain amount of time.

It is not appropriate for the manager to do the work only based on his own opinion, experience
and belief. So managers should emphasize on study and research to identify new methods of
management.

2. Harmony, not discord

Harmony refers to uniformity in instruction in the workplace. The state of disharmony refers to
the difference in approach.

F. W. According to Taylor, there should be a cordial relationship between managers and

workers. Although managers want high profits and workers want high wages, both of these goals
can be achieved through amicable relationships.

Therefore, scientific management emphasizes that there should not be any kind of conflict
between the objectives of managers and workers.

3. Cooperation, not individualism

This theory emphasizes the need for mutual cooperation between management and workers
through collective action to achieve organizational goals.
Mutual cooperation lead to increased productivity, efficiency and profitability

This theory advocates more about organizational goals than individual goals.

5. Development of workers

Scientific management emphasizes scientific selection, placement and training of workers

according to the nature of work.

Proper training should be provided to the workers for higher performance by enhancing their
skills and efficiency.

In order to develop the performance and efficiency of each worker, the management should take
steps such as scientific education and training, proper working hours, good working conditions,
proper guidance and counseling, arrangements for transfer and promotion, financial incentives,
safety and entertainment, etc.

5. Maximum output
Taylor emphasized maximum production rather than minimum or limited production. This
benefits the owner, workers and society as a whole.

Scientific management is primarily concerned with increasing production units and productivity.

Greater production through optimal utilization of resources and facilities in an organization leads
to higher profits for management and higher wages for workers.

Ultimately, this leads to an increase in the economic level of the society and prosperity.

6. Division of responsibility

According to this principle, there should be a clear and defined division of responsibilities
between management and workers.

Management should be responsible for formulating the plan and workers should be responsible
for its effective implementation.

7. mental revolution

 This theory emphasizes the mental revolution of both management and workers.
 This theory emphasizes the experience of dedicated efforts to turn a plan into a goal.
 This theory emphasizes that organizational goals can be achieved only through the
development of mutual relationship between management and workers and mental
revolution.

Fayol's Administrative Management Theory

Henry Foyal (1841-1925) was born in Istanbul, Turkey. He was a French industrialist. He started
working as an engineer in a French Mining Company in 1860 and later became its Managing
Director in 1888.

He wrote and published a book titled "Administration Industriable Generate" in 1916 which was
translated into English in 1924. In this book, Fayol introduced the concept of management of
omnipresent nature and developed a framework of administrative management.

Henry Fayol is a great contributor to administrative management. That is why he is known as the
father of administrative management.

He divided all functional activities of business into 6 groups namely Technical, Commercial,
Financial, Security, Accounting and Managerial. Similarly, he identified the basic functions of
management as Planning, Organizing, Communication, Co-ordination and Controlling.

Principles of Administrative Management Theory

The theory of administrative management is Henry Foyle's major contribution to the field of
management. Henri Fayol, a French industrialist and management theorist, developed the 14
Principles of Management, also known as Fayol's Principles of Organization. These principles
provide guidelines for effective management and are still widely taught and used in various
organizations today. Here are Fayol's 14 Principles of Organization:
DAD CDS RICS TOEE
1. Division of Work: Work should be divided into specialized tasks to increase efficiency and
productivity.
2. Authority and Responsibility: Managers should have the authority necessary to give orders,
and they should also take responsibility for their actions and the actions of their subordinates.
3. Discipline: Employees should obey and respect organizational rules and guidelines.
4. Unity of Command: Each employee should receive orders from only one superior to avoid
confusion and conflicting instructions.
5. Unity of Direction: The organization should have a single plan of action to achieve its goals.
6. Subordination of Individual Interests to the General Interest: The interests of individuals or
groups should not supersede the interests of the organization as a whole.
7. Remuneration: Employees should be fairly compensated for their work to ensure motivation
and satisfaction.
8. Centralization: The degree to which decision-making authority is concentrated at the top of the
organization should be determined based on the circumstances and the competence of
subordinates.
9. Scalar Chain: The chain of command within the organization should be clear, with a formal
line of authority from top to bottom.
10. Order: Resources and personnel should be allocated in the most effective and efficient
manner.
11. Equity: Employees should be treated with fairness and justice to maintain a positive work
environment.
12. Stability of Tenure: Organizations should strive to reduce employee turnover and provide job
security to foster loyalty and continuity.
13. Initiative: Employees should be encouraged to take initiative and show creativity in their
work.
14. Esprit de Corps: Building a sense of teamwork and unity among employees is crucial for the
success of the organization.
It's important to note that these principles are not meant to be rigid rules, but rather general
guidelines that can be adapted and applied based on the specific needs and circumstances of an
organization.

Max Weber's Bureaucracy Theory: Concept and Principles

 The father of bureaucracy is the German sociologist Max Weber. He is also considered as
the pioneer of classical theory.
 Max Weaver explains that bureaucracy is rational and efficient. According to him, there
are clear policy rules and linear authority to effectively operate the management in the
bureaucracy. Bureaucracy is more useful for managing large types of organizations.
 Max Weber (1864-1920) propounded the theory of bureaucracy, which is considered one
of the most effective theories in management.
 Max Weber studied many organizations during his lifetime. From this he discovered that
organizations were being run on tradition and politics rather than merit and efficiency.
 He also found that people prefer to secure administrative jobs through contacts rather
than expertise. Similarly, he pointed out that the line of authority and responsibility is
also unorganized.
 Max Weber suggested an ideal organization that operates on the basis of conscience
rather than on the basis of politics, and the related theory is called Bureaucracy theory.
 In this principle he formulated a formal system and framework of administrative
procedures to ensure efficiency and effectiveness in the organization.