Prof Ramakrishnan.v M.B.A, Pursuing PH.

D
 INTRODUCTION
PRINCIPILES OF MANAGEMENT
 UNIT 1
DEVEL0PING MANAGEMENT THOUGHT

• PRE SCIENTIFIC MANAGEMENT ERA

I. PRE SCIENTIFIC MANAGEMENT ERA •I. Ever Since
Down Of civilization.
II. •-Administration of Mohenjodaro & Harappa Cities
Of ancient Aryan in 2000 B.C.
III. •-Buddha order and the sangha
IV. •-Organizations of public life in ancient Greece.
•Organization of roman catholic church.
•Organization of military forces.
• SECOND HALF OF NINETEENTH CENTURY
•Use of management Principles in business.
•Robert Owen-1813 :-Development of mgmt
Concepts.
•Factor which influence the productivity of
personnel in plants.
 HUMAN RELATION ERA

• A manager’s success in directing depends on his

ability to create such a healthy human relations
climate.
• Leaders need to understand workers as human
beings with social and emotional needs.
• A manager’s success in directing depends on his
ability to create such a healthy human relations
climate.
• Leaders need to understand workers as human
beings with social and emotional needs.
 Why should Human Relations in
Management?
• To remove conflict between individual and
organization.
• To remove individual differences.
• To achieve the goals of institution.
• To make a good working environment.
• To make a coordination between different
sections.
• To increase quality and quantity of products and
services.
Human Relations Theory
Human Relations Theorists

• Mary Parker Follett

• Elton Mayo
 Mary Parker Follett (1868-1933)
• Known as a visionary genius

 Mutual influence is developed

when people work together.
 Do not try to control people.
Control the situation together.
 George Elton Mayo (1880-1949)
Successful Academic and Clinical Psychologist

 Mayo had discovered a fundamental

concept. Working places should be
like as a social environments and
good relationship should be
maintained between all the workers.
People are motivated by much more
than self-interest.
Thus,
THE HUMAN RELATIONS ERA
HAD BEGUN!
 Guidelines for Effective Human
Relationship
Adaptive leadership
Be optimistic
Be positive
Be genuinely interested in others
Smile and develop sense of humor
Call people by respectfully
Communicating effectively
Conditioning behavior
 Continued….
Listen actively to others
Always help to others
Think before you act
Management should be a positive attitude towards
workers
Too concerned with worker satisfaction
Increase the team-work
Involving individuals and groups in decision
making
The workplace environment should focus on needs
of employees.
Management requires effective social skills.
 SOCIAL SCIENCES ERA

• Social sciencies are closely related to human

behiviour
• Social systems approach(1940-1950)was
founded by V ilfred Pareto
• His ideas were further developed by chester I
Bernad
• It is a study of individual social behavior with
group behavior and its effects in management
• It considers organization as a social system
consisting of various groups of people working
together
• It is a system of cultural relationships in which
cooperation and team spirit are necessary for
achieving organizational objectives
• Organization is represented by cultural
relationships of the social groups working in the
organization
• It shows relationship exists between internal and
external changes
 Advantages
• Organization is a social system and it needs to consider
all groups that functioning
• Among formal and informal groups management has
to identify informal groups and motivate them
• Both types of incentives financial and non financial
have to be used to encourage various groups working
in an organization
• People come together to achieve ends which they
cannot accomplish working alone
• In groups cooperative interaction of ideas , forces ,
desires and thinking takes place
 Contributions of Bernard

• People in groups can communicate

• People are willing to contribute to action
• They work to accomplish a common purpose
• He suggests informal organization should be
developed as a means of communication .
How ever a manager has to deal with both types of
organizations formal and informal
He suggested four key elements of organization
• System of Logical decision making
• System of power to lead people in group
• System of functionalisation to
specialize(departmentation )
• System of effective and efficient incentives to
induce people to contribute to group action.
• He also gave a new theory of “Acceptance Theory
of Authority”
 MANAGEMENT SCIENCES ERA

• 1.F.W Taylor –Industrial Engineers(Father of

Scientific Management).
• Thought About need of scientific approach to
management of business organization
• Courses on law on efficiency of workers were
developed
• Lack of knowledge of management were to be
done by workers
 Book-Principles of scientific
Management (F W TAYLOR)
To enhance Productive efficiency of each worker-
Principles to be followed
•1) Science not rule of thumb
•2) Harmony not discord.
•3) Co-operation not individualism
•4) Maximum output in place of restricted output.
•5)Development of each man to his greatest
efficiency &prosperity.
•6)Equitable division of work and responsibility
between management and lab our.
 Book-Principles of scientific
Management (F W TAYLOR)
• Techniques Developed to implement principles
1.Element of Scientific Management
Method study, routing motion study, time study
,fatigue study& role setting.
2.PLANNING OF INDUSTRIAL OPERATIONS
What How ,Where & When the work shall be done .
3)Proper selection ,placement and training of
workers by a centralized personnel department.
 Book-Principles of scientific
Management (F W TAYLOR)
• IMPROVEMENT IN METHODS OF WORK VIZ
I)Standardization of tools and equipment.
2)Regulation of speeds of machines.
3)Improvement of the work environment.
4)Introduction of functional organization.
 CONTRUBUTIONS OF FW TAYLOR

CONTRIBUTION TO MANAGEMENT
WHAT IS SCIENTIFIC MANAGEMENT ?

MANAGEMENT THEORY BY TAYLOR.

MANAGEMENT VIEW.

PRINCIPLES OF SCIENTIFIC MANAGEMENT.

CRITICISM FOR TAYLOR’S MANAGEMENT.

 SCIENTIFIC MANAGEMENT
• Frederick Winslow Taylor (20 March 1856-21
March 1915), widely known as F. W. Taylor,
was an American mechanical engineer who
sought to improve industrial efficiency.

• He is regarded as the father of scientific

management, and was one of the first
management consultants.
 Scientific Management
• It is the art of knowing what exactly you want
from your men to do & then seeing that it is
done in best possible manner by them.
• In simple words it is just an application of
scientific theories to management.
 MANAGEMENT THEORY BY TAYLOR

• Analyzing the work – One best way to do it.

• He is remembered for developing time and
motion study.
• He would break a job into parts and measure
each of 100th of a minute.
• The efforts of his disciples (most notably
H.L.Gantt) made the industry to implement
these ideas.
 Taylor’s view about Management

• Taylor believed that the industrial

management of his day was amateurish, that
management could be formulated as an
academic discipline.
• Best results would come from the partnership
between trained and qualified management
and a cooperative and innovative workforce.
• Each side needed the other and there is no
need for trade unions.
 Principles of scientific management
• Science not the rule of thumb: scientific
investigation should be used for taking
managerial decisions instead of basing on
opinion, institution or thumb rule.
• Harmony not discard/ cooperation between
employers and employees: Harmonious
relationship between employees and employers.
Cooperation of employees helps managers to
ensure that work is carried in accordance with
standards
 Continued…
• Scientific selection training and development:
selection means to choose the best employee
according to the need. Their skill and
experience must match the requirement of
the job.
• Scientific development refers to criteria for
promotions, transfers etc.. So that work is
done with full efficiency.
 Taylor’s principles
The four principles of management.
1.Development of a true science.
2.Scientific selection of the workman.
3.Scientific education and development of the
workman.
4.Intimate and friendly cooperation between
the management and the men
• Taylor created planning departments, staffed
them with engineers, and gave them the
responsibility to:
1. Develop scientific methods for doing work.
2. Establish goals for productivity.
3. Establish systems of rewards for meeting
the goals.
4. Train the personnel in how to use the
methods and there by meet the goals.
Criticism for scientific management
• The main argument against Taylor is this reductionist approach to
work dehumanizes the worker.

• The allocation of work "specifying not only what is to be done but

how it is to done and the exact time allowed for doing it" is seen as
leaving no scope for the individual worker to excel or think.

• The belief that increased output would lead to less workers.

•
Inefficiencies within the management control system such as
poorly designed incentive schemes and hourly pay rates not linked
to productivity.
 Continued…
• Division of work/ responsibility: The responsibility of
workers and management should be properly divided
& communicated so that they can perform them in an
effective way and should be reward for the same.
• Mental revolution: Acc. To Taylor, the workers and
managers should have a complete new outlook; a
mental revolution in respect to their mutual relations.
• Workers should be considered as part of
Organization.
• Employers shouldn’t treat workers as mere wage
earners.
 CONTRUBUTIONS OF HENRI FAYOL

• Henry Fayol (1841-1925) started his career as

a junior engineer in a coal mine company in
France and became its general manager in
1880.
• He not only saved a large coal and steel
company from bankruptcy, but also led to
crowning success.
• A contemporary of Taylor, Fayol for the first time
attempted a systematic analysis of the overall
management process. In 1916, he published his
famous book in French language ‘Administration
Industrielle Generale.’

It was reprinted several times in French and later

published in English language under the title,
General and Industrial Management in 1929.
 Fayol’s contribution
Fayol’s contribution to management can be discussed under the
following four heads:
1. Division of Industrial Activities:
He found that all activities of the industrial enterprise could be divided
into six groups:
• Technical (relating to production);
• (ii) Commercial (buying, selling and exchange);
• (iii) Financial (search for capital and its optimum use) ;
• (iv) Security (protection of property and persons);
• (v) Accounting (Preparation of various statements, accounts,
returns etc.) and
• (vi) Managerial (planning, organisation, command, co-ordination
and control)
He pointed out that these activities exist in every enterprise.
• 2. Qualities of an Effective Manager:
• Henry Fayol was the first person to recognize the different qualities
for manager.
• According to him these qualities are:
• (i) Physical (health, vigor, and address);
• (ii) Mental (ability to understand and learn, judgment, mental vigor,
and adaptability) ;
• (iii) Moral (energy, firmness, willingness to accept responsibility,
initiative, loyalty, tact and dignity);
• (iv) Educational (acquaintance with matters related to general
functioning) ;
• (v) Technical (peculiar to the functions being performed); and
• (vi) Experience (arising from the work).
 3. Functions of Management:
• Fayol classified the elements of management into five and all such elements were considered
by him as the functions of management.
• According to him following are the functions of management:
• (i) Planning:
• Deciding in advance what to do. It involves thought and decision relating to a future course of
action.
• (ii) Organizing:
• Providing everything that is useful to a business enterprise for its operation i.e., men,
materials, machines and money etc.
• (iii) Commanding:
• Maintaining activity among personnel (lead the personnel in a better way).
• (iv) Co-ordinating:
• The channelization of group efforts in the direction of achieving the desired objective of the
enterprise (binding together-unifying and harmonizing all activity).
• (v) Controlling:
• Seeing that everything is being carried out according to the plan which has been adopted,
the orders which have been given, and the principles which have been laid down. Its object is
to point out mistakes in order that they may be rectified and prevented from occurring again.
Fayol observed that these principles apply not only to business enterprise, but also to
political, religious, philanthropic or other undertakings.
4.PRINCIPLES OF MANAGEMENT

Henri Fayol evolved 14 principles of

management which could used in all
management systems
1.Division of work (Specialization): work should be divided among individuals and
groups to ensure effort and attention focused on task.
2. Authority and Responsibility: Authority and responsibility are two sides of a coin
Authority refers to power to give orders and responsibility refers to being accountable
or responsible for ones acts .
3.Discipline: For an organization to be successful it requires common effort ,penalties
shall be applied for encouraging common effort .
4Unity of Command:
workers should receive orders from one manager
5.Unity of Direction:
Entire organization moves to a single objective
6.Subordination of Individual Interest to General Interest:
Priority should be given to organization’s interest than ones individual interest .
7. Fair Remuneration to workers:
Works should be provided fair rate of payment for their work.
8.Effective Centralization:
Where all important decisions are taken by top level management
9. Scalar Chain:
It shows hierarchy in an organization how authority flows or how communication
flows.
10.Order:
For sake of efficiency and control people should have right resources at their
disposal to function properly.
11.Equity:
According to Henri Fayol all employees should be treated equally
12.Stability in the tenure of personnel: In this management strives to reduce
employee turnover.
13Initiative: Fayol argued that employees should be given freedom to bring new ideas
it increases interest and new ideas.
14. Esprit de Corps (Union is Strength)where in organization strives to bring unity in
organization.
 Contribution by Elton Mayo

Hawthorne experiments
• The term “Hawthorne” is a term used within several
behavioral management theories
• and is originally derived from the western electric
company’s large factory complex named Hawthorne works.
• Starting in 1905 and operating until 1983, Hawthorne
works had 45,000 employees and it produced a wide
variety of consumer products, including telephone
equipment, refrigerators and electric fans.
• As a result, Hawthorne works is well-known for its
enormous output of telephone equipment and most
importantly for its industrial experiments and studies
carried out.
• In 1927, a group of researchers led by Elton Mayo and Fritz
Roethlisberger of the Harvard Business School were invited to join
in the studies at the Hawthorne Works of Western Electric
Company, Chicago.
• Experiment lasted up to1932
• Experiment bought out productivity of employees is not a function
depending on work wages paid to employees but it depends on
satisfaction of employees in work environment.
• He tried to bring out emotional factors which effected productivity
efficiency.
• He pointed out of all factors influencing human behavior the most
important was workers participation in social groups
• Mayo pointed out that work arrangement in addition to production
requirement objectives was key subjective requirement of
employees for social satisfaction.
Hawthorne experiments consisted for four
phases
1.llumination Experiment
2.Relay Assembly Test Room Experiment
3.Interviewing Program
4.Bank Wiring Test Room Experiment
 llumination Experiment

• This experiment was conducted to establish

relationship between output and illumination.
• When the intensity of light was increased, the output
also increased.
• The output showed an upward trend even when the
illumination was gradually brought down to the normal
level.
• Therefore, it was concluded that there is no consistent
relationship between output of workers and
illumination in the factory.
• There must be some other factor which affected
productivity.
 MASS INTERVIEW PROGRAM
• The objective of this program was to make a systematic study of
the employees attitudes which would reveal the meaning which
their “working situation” has for them.
• The researchers interviewed a large number of workers with regard
to their opinions on work, working conditions and supervision.
Initially, a direct approach was used whereby interviews asked
questions considered important by managers and researchers.
• The researchers observed that the replies of the workmen were
guarded.
• Therefore, this approach was replaced by an indirect technique,
where the interviewer simply listened to what the workmen had to
say.
• The findings confirmed the importance of social factors at work in
the total work environment.
 Relay assembly test room Experiment
• This phase aimed at knowing not only the impact of illumination on
production but also other factors like length of the working day, rest
hours, and other physical conditions.
• In this experiment, a small homogeneous work-group of six girls
was constituted. These girls were friendly to each other and were
asked to work in a very informal atmosphere under the supervision
of a researcher. Productivity and morale increased considerably
during the period of the experiment.
• Productivity went on increasing and stabilized at a high level even
when all the improvements were taken away and the pre-test
conditions were reintroduced.
• The researchers concluded that socio-psychological factors such as
feeling of being important, recognition, attention, participation,
cohesive work-group, and non-directive supervision held the key for
higher productivity.
 BANK WIRING TEST ROOM
EXPRIMENT
• This experiment was conducted by Roethlisberger and Dickson with a view
to develop a new method of observation and obtaining more exact
information about social groups within a company and also finding out the
causes which restrict output.
• The experiment was conducted to study a group of workers under
conditions which were as close as possible to normal. This group
comprised of 14 workers. After the experiment, the production records of
this group were compared with their earlier production records.
• It was observed that the group evolved its own production norms for each
individual worker, which was made lower than those set by the
management.
• Because of this, workers would produce only that much, thereby
defeating the incentive system.
• Those workers who tried to produce more than the group norms were
isolated, harassed or punished by the group.
 The findings of the study are:-

• Each individual was restricting output.

• The group had its own “unofficial” standards
of performance.
• Individual output remained fairly constant
over a period of time.
• Informal groups play an important role in the
working of an organization.
 CONTRUBUTION OF HOWTHRON
EXPRIMENT
• A business organization is basically a social system. It is not just a techno-
economic system.
• The employer can be motivated by psychological and social wants because
his behavior is also influenced by feelings, emotions and attitudes. Thus
economic incentives are not the only method to motivate people.
• Management must learn to develop co-operative attitudes and not rely
merely on command
• Participation becomes an important instrument in human relations
movement. In order to achieve participation, effective two-way
communication network is essential.
• Productivity is linked with employee satisfaction in any business
organization. Therefore management must take greater interest in
employee satisfaction.
• Group psychology plays an important role in any business organization. We
must therefore rely more on informal group effort.
 Contribution by Rensis Likert

• Dr. Rensis Likert was a American

• psychologist. Likert graduated
• from University Michigan with
• in economics and sociology in
• 1922. He received his doctorate
• in psychology from Columbia
• University in 1932. During the
next decade his work involved the interpretation of
surveys and the handling of questionnaires. He joined
the staff of U Michigan in 1946, becoming the founding
Director of the Institute for Social Research in 1949.
 Liker's Research
 University of Michigan's Institute for Social
Research and its inception in 1946-1970.
 Rensis Likert devoted particular attention to
research on organizations (1960s-1970s).
Research on major corporations around the
world.
 The Research Center for Group Dynamics in
1948.
 Contribution by Likert
• Dr. Likert has conduct much on human
behavior with organization, particularly in the
industrial situation. He has examined different
type of Organization and leadership styles,
and he asserts that to achieve maximum
profitability, goods labor relation and high
productivity, ever organization must make
optimum use of their human assets.
Likert had identified four management
system:
 Exploitive authoritative system
 Benevolent authoritative system
 Consultative system
 Participative (group) system
 Exploitive authoritative system
• In this type of management system the job of
employees/subordinates is to abide by the
decisions made by managers and others with
a higher status in the organization. The
subordinates do not participate in the decision
making. The organization's sole concern is
completion of work. Fear and threats may be
used to insure completion. No teamwork is
involved
 Benevolent authoritative system
• Just as in an exploitive authoritative system,
decisions are made at the top of the
organization. However, employees are
motivated through rewards rather than fear
and threats. Information may flow from
subordinates to managers, but it is restricted
to “what management want to hear”.
 Consultative system
• In this type of management system,
subordinates are motivated by rewards and a
degree of involvement in the decision-making
process. Management will constructively use
subordinates' ideas and opinions. However,
involvement is incomplete, and major
decisions are still made by senior
management. More information flows from
subordinates to management, although it is
incomplete and euphemistic.
 Participative (group) system
• Management have complete confidence in their
subordinates/employees. Communication is free, and
subordinates are fully involved in decision making.
Subordinates comfortably express opinions and engage
in teamwork. Teams are linked together by common
members. Likert calls people in more than one group
“linking pins”. Employees throughout the organisation
feel responsible for achieving the organisation’s
objectives. This responsibility is motivational,
especially as subordinates are offered economic
rewards for achieving organisational goals, which they
have participated in setting.
 Likert’s suggestion for effective
management
The motivation to work must be fostered by
modern principles and techniques, and not by
the old system of rewards and threats.
 Employees must be seen as people who have
their own needs, desires and values.
Supportive relationships must exist within
each work group. These are characterized not
by actual support, but by mutual respect.
Contribution by Mary Parker Fallot
• Motivation to work must be fostered by
modern principles and not by old system of
rewards and threats. Employees must be seen
as people who have their own needs desires
and values supportive relationship must exist
with in each work group these are put forward
as not by actual support but as mutual
respect.
 Mary parker defined management as “ Art of
getting things done through others”

She is regarded as mother of scientific management

her highly influential development ideas were in
negotiation, power, employee participation of
organizational studies
She was a worker who turned management
theorist.
 Principles of coordination by Mary
• Principle of early stage
States that business can achieve coordination in early stages of
planning and policy making
• Principle of continuity
The principle of continuity states that coordination is a continuous
process
• Principle of direct contact
• States that a business can achieve co-ordination more easily by direct
interpersonal relationships.
• Principle of reciprocal relations
• The decisions and actions of of all managers and employees and
departments of the organization are inter-related. So, the decisions and
actions of A person or departments will affect all other people and
departments in the organization. Therefore, before taking any decision or
action all managers must first find out the effect of that decision or action
on other persons and departments in the organization. This is called the
Principle of Reciprocal Relations.
Additional principles of coordination
• Principle of effective communication
Co-ordination will be successful only in the presence of an effective
communication. Good communication must be present between all departments,
within employees themselves and even between managers and their subordinates.
• Principle of mutual respect
Coordination will be successful only if there exist a mutual respect throughout the
organization. All managers working at different levels (top, middle or lower) must
respect each other.
• Principle of clarity of objectives
Co-ordination will be successful only if the organization has set its clear objectives.
Everyone in the organization must know the objectives very clear.

• Principle of scalar chain

The line of authority which flows with in an organization . It is necessary for good
communication.
• Mary Parker Follet
• McGregor
• Herbert A Simon
• Peter F Drucker
Contributions by McGregor

Douglas Murray McGregor's : Theory Y & Theory X

• Douglas McGregor was a management
professor at MIT Sloan School of Management
and president of Antioch College from 1948 to
1954. He also taught in IIM Calcutta . In his book
The Human Side of Enterprise, he talked about
two theories called Theory X and Theory
Y. McGregor identified an approach of creating an
environment within which employees are
motivated via authoritative, direction and control
or integration and self-control, which he called
Theory X and Theory Y.
• Theory X is an authoritarian style where the
emphasis is on “productivity, on the concept
of a fair day's work. It reflects an underlying
belief that management must counteract an
inherent human tendency to avoid work”.
 THEORY X
• Following are the assumption made by Theory X style of
management :

• An average employee intrinsically does not like work and tries to

escape it whenever possible
• Since the employee does not want to work, he must be persuaded,
compelled, or warned with punishment so as to achieve
organizational goals. A close supervision is required on part of
managers. The managers adopt a more dictatorial style
• Many employees rank job security on top, and they have little or no
aspiration/ ambition
• Employees generally dislike responsibilities
• Employees resist change
• An average employee needs formal direction
 Theory Y
• Theory Y is a participative style of
management which “assumes that people will
exercise self-direction and self-control in the
achievement of organizational objectives to
the degree that they are committed to those
objectives”. It is management's main task in
such a system to maximize that commitment
 THEORY Y
• Following are the assumptions made by Theory Y style of management :-

Employees can perceive their job as relaxing and normal. They exercise
their physical and mental efforts in an inherent manner in their jobs
• Employees may not require only threat, external control and coercion to
work, but they can use self-direction and self-control if they are dedicated
and sincere to achieve the organizational objectives
• If the job is rewarding and satisfying, then it will result in employees’
loyalty and commitment to organization
• An average employee can learn to admit and recognize the responsibility.
In fact, he can even learn to obtain responsibility
• The employees have skills and capabilities. Their logical capabilities should
be fully utilized. In other words, the creativity, resourcefulness and
innovative potentiality of the employees can be utilized to solve
organizational problems
 Contrubutions by Herbert A Simon

• Some of the major contributions of Herbert Simon

towards management are as follows:
1. Concept of Organization
• 2. Decision-making
• 3. Bounded Rationality
• 4. Administrative Man
• 5. Organizational Communication.
• Herbert Simon, a noble prize winner in Economics, has
made significant contributions in the field of
management particularly administrative behaviour and
decision making.
• 1. Concept of Organisation:
• Simon has described an organisation as a complex network
of decisional processes, all pointed towards their influence
upon the behaviour of the operatives. He has viewed the
organisation containing distribution and allocation of
decision-making functions.

• According to him, physiology of the organisation is to be

found in the process whereby organisation influences the
decisions of its members, supplying these decisions with
their devices. Thus, the best way to analyses an
organisation is to find out where and by whom decisions
are made.
• 2. Decision-making:
• Perhaps the greatest contribution of Simon is in the field of
decision-making. Decision-making is the core of management and
management is synonymous with decision-making. This is why he
has been referred to as decision theorist. According to him, the
decision process can be broken into a series of three sequential
steps.
• These are:
• (i) Intelligent activity the initial phase of searching the environment
for conditions calling for decisions;
• (ii) Design activity the phase of inventing, developing, and analysing
possible course of action to take place; and
• (iii) Choice activity the final phase of actual choice selecting a
particular course of action from those available.
• 3. Bounded Rationality:
• Simon is of view that man is not completely rational.
He has criticized the theories which are based on the
assumptions of complete rationality. He has advocated
the principle of bounded rationality. Accordingly,
managers do not go for maximum satisfaction of a
decision but are satisfied with good enough
satisfaction from a decision.
• Managers cannot maximize on account of various
limitations and constraints. A decision is a rational for
achieving the desired ends, appropriate means are
adopted.
• 4. Administrative Man:

• Simon has given the concept of administrative man as the model of

decision-making. The model is based on the following assumptions:
• (i) Administrative man adopts satisfaction approach in decision-making
rather than the maximizing approach of economic man.
• (ii) He perceives the word as a simplified model of real world. Thus, he
remains content with simplification,
• (iii) He can make his choice without first determining all possible
alternatives and without screening that these are in-fact all the
alternatives,
• (iv) He is able to make decisions with relatively simple rule of thumb, or
tricks of trade, or force of habit. The administrative man model describes
the decision-making process of mangers as tempting .
 Contributions of Peter Drucker
• Peter F Drucker (1909-2005)
• Some of the major contributions of Peter Drucker
are as follows:
• 1. Nature of Management
• 2. Management Functions
• 3. Organization Structure
• 4. Federalism
• 5. Management by Objectives
• 6. Organizational Changes
• Nature of Management
The basic objective of management is to read towards
innovation. It may include development of new ideas,
combining of old and new ideas, adaptation of ideas from
other fields or even to act as a catalyst and encouraging
others to carry out innovation.
He has treated management as a discipline as well as
profession. As a discipline, management has its own tools,
skills, techniques and approaches.
As management as profession more emphasis that
managers should not only have skills and techniques but
should have right perspective putting the things into
practice.
Managerial functions
• According to Drucker, management is the organ of its institution.
He sees management through its tasks. Accordingly, there are three
basic functions of a manager which he must perform to enable the
institution to make its contribution for:
• (i) the specific purpose and mission of the institution whether
business, hospital or university;
• (ii) making work productive and the worker achieving; and
• (iii) managing social impacts and social responsibilities.
• He considers manager as administrator thus, a manager has to
perform several functions: setting of objectives, making, organizing
and motivating key areas of objective setting are market standing,
innovation, productivity, physical and financial resources,
profitability, managerial performance and development, worker
performance and attitude, and public responsibility.
• Organization Structure:
Drucker has decried bureaucratic structure because of its too many
dysfunctional effects. Therefore, it should be replaced. He has
emphasized three basic characteristics of an effective organization
structure.
These are:
(i) Enterprise should be organized for performance;
(ii) it should contain the least possible number of managerial levels;
(iii) it must make possible the training and testing of tomorrow’s
top managers—responsibility to a manager while still he is young.
He has identified three basic aspects in organizing activity analysis,
decision analysis, and relation analysis.
Federalism:
• Drucker has advocated the concept of federalism.
Federalism refers to centralized control in decentralized
structure Decentralized structure goes far beyond the
delegation of authority.
Advantages of Federalism
• i)It sets the top management free to devote itself to its
proper functions;
• (ii) It defines the functions and responsibilities of the
operating people;
• (iii) It creates a yardstick to measure their success and
effectiveness in operating jobs.
MBO
Management by objectives (MBO) is regarded as
one of the important contributions of Drucker to
the discipline of management. He introduced this
concept in 1954. MBO has further been modified
by Schleh which has been termed as
management by results’. MBO includes method
of planning, setting standards, performance
appraisal, and motivation.
• Organizational Changes:
• Drucker has visualised rapid changes in the
society because of rapid technological
development. Though he is not resistant to
change, he feels concerned for the rapid
changes and their impact on human life.
Normally, some changes can be absorbed by
the organization but not the rapid changes.
• 5. Organizational Communication:
Simon has emphasized the role of communication
in organization. According to him, there are three
stage in the communication process; initiation,
transmittal, and receipt of information. There
may be blockade of communication and any of
these three stages. In order to overcome the
problem of communication, he has emphasized
the role of informal communication and has
attached less importance to the formal network
of authority.
Trends and Challenges of Management
in Global Scenario
Administration v/s Management
BASIC PRINCIPLES AND PROCESS OF
MANAGEMENT
 PLANNING
Operational Plans v/s Strategic Plans
Types of plans
Grouping of various types of plans
STEPS INPLANNING
HOW TO MAKE AN EFFECTIVE PLAN