MANAGEMENT

INTRODUCTION TO MANAGEMENT

Organisations are required to accomplish, a given task according to schedule and pre-

determined programme. The people are made to work. They don’t themselves work.

Management therefore has come to stay as an activity process in this complex industrial and

commercial world. It is composed of some basic functions for getting the objectives of a business

house achieved through sustained and well directed efforts of its personnel.

DEFINITION OF MANAGEMENT

It is very difficult to give the precise meaning of the term ‘Management’. The concept of

management is as old as the human race itself. Management is not only an essential element of

organised society, but also an integral part of life. But what is Management? How do we define

it? How do we differentiate between good management and bad management? In the

management literature, we find large number of definitions of management given by different

authors.

1) According to E.F.L. Breech – “Management can be defined as a social process entailing

responsibility for the effective and efficient planning and regulation of the operations of an

enterprise,’’ such responsibility involving

(a) The installation and maintenance of proper procedures to ensure adherence to plans,

and

(b) Guidance integration and supervision of the personnel comprising the enterprise and

carrying out its operation.”

2) According to Henry Fayol “Management is to forecast and plan, to organise, to command, to

co-ordinate and to control.” It attempts to describe management in terms of what a manager

does and not what management is?

3) According to Keith and Gubbline “management is the force that integrates men and physical

plant into an effective operating unit.”

4) According to Oliver Sheldon, “the term management is commonly used to cover the formation

of policy, its execution, the designing of the organisation and its employment.”

5) According to Kimball and Kimball “management may be defined as the art of applying the

economic principles that underline the control of men and materials in enterprise under

consideration.

NATURE OF MANAGEMENT

The concept of management is very old. Therefore, different views have been expressed

about its nature by different authorities. The main view points about the nature of management

are as follows,

1. Management as an inborn quality

Prior to 1880 there has been a leading concept that management is an inborn quality. People

believed that it was not necessary to study any organised body of management concepts as

managers are born not made some people are so efficient and talented since their birth that they

lead and get success in the field of business. But this concept has been deleted by the new

developments.

2. Management is social science

In describing the nature of management eminent authors of management are of this opinion

that it is a social science. It is supposed to be the behavioural science in exact nature. Its

principles and are situation bound. Despite the fact that a large no of theories and principles of

management have been established, there applicability may not necessarily lead to same result.

The process of management is very much related with the behaviour people at work and their

behaviour cannot be predicted in an exact manner. So the limitations of social science are there

with science of management. But with the introduction of quantitative tools in the field of

decision making. Management is growing as a science. It has an organised body of knowledge

having its other nature. So it can be said that management is a social science having its own

approach and dynamics in different work situations.

3. Management in nature is the work done through and with people

It is concerned with the exercise of the knowhow for the effective accomplishment of desired

results. As the process of managing is a fine art, it is with application of the principles keeping in

view the real life situations. The same process is followed in repetitive manner and the practise is

moulded according to the experience after applying the set body of knowledge. Management is

also creative in nature.

4. Management in “as a profession in nature

It satisfies all the conditions of a profession. It has a well defined body of knowledge. It requires

formal training and it is been provided to new entrance. It has various representative bodies and

the entrants are joining in it as a career with the aim of serving the society not for making alone.

5. Management is an Art

Management is not only concerned with scientific theories and practices but also with the

application of skills and knowledge to get the work done. Without being creative enough, every

activity in the management process goes waste.

6. Management is dynamic

The principles of management are so flexible that it can be adoptable to any kind of business

situation. They are universally accepted.

7. Management is inter-disciplinary in approach

Management is not a single subject that can be operated alone. The principles of management

take the help of various other subjects like accounts, economics, statistics, etc.

PURPOSE OR IMPORTANCE OF MANAGEMENT

1. Managing is an essential activity in every aspect of organised life.

2. Management determines the objectives of the organisation and takes step to achieve

them.

3. Management is brain of an organisation.

4. The study of management emphasises what to do and when to do.

5. Management directs the members of the organisation toward the achievement of its

objectives.

6. Management is a critical ingredient in the nation’s economic and social development.

7. Countries development depends upon good management.

8. Efficient management is key to national growth.

FUNCTIONS OF MANAGEMENT

The different functions of management are:-

1. Planning

It is defined as what is to be done, when how and by whom it is to be done. It is concerned

with determining of the objectives. It involves selecting the objective, preparing policies,

programs for achieving the goals. This function is carried out at every level of management.

2. Organizing

It is defined as to provide everything which is very essential for managing business. It involves

bringing together the different resources to achieve pre-determined objectives.

The sub functions of organizing are:

a) Defining the activities

b) Grouping the activities

c) Assigning the activities.

3. Staffing

The staffing function is concerned with human resources. It involves managing the

organization structure through proper and effective selection. It involves proper selection of

candidates, training and development, promotion and transfers, etc.

4. Directing

This function is concerned with an art of getting things done. It starts the work by instructing

subordinates, about how they have to perform jobs assigned to them. This function consists of

issuing of orders, instructing subordinates, motivating them.

5. Leading

It is nothing but influencing (a process that affects the behaviour and attitude of an

individual) an individual to work together to accomplish the organizational objectives and

making him/her to do what the leader wants him/her to do.

6. Co-ordinating

It is nothing but the harmonious blending of the activities of the different specialists or

departments to achieve the pre determined objectives. It is the orderly arrangement of group

efforts that provide unity of actions.

7. Motivating

It is nothing but an act of inducement. It is something that inspires an individual get into action n

continues him in the course of action, willingly to get the result expected out of him.

8. Reporting

It is a process of approaching or transferring the information to the people in the higher level

in the management hierarchy. It is a process done by every subordinate to his/her immediate

superior.

9. Controlling

It is the process of verifying whether proper progress is being made towards the objectives or

not. It involves:

a. Determination of standards

b. Verifying actual performance

c. Comparing actual performance

d. Taking corrective actions.

10. Budgeting

It is nothing but preparation of statements of funds and resources and allocating them in an

appropriate manner.

11. Decision making

It is concerned with evaluating the alternatives and deciding if they are appropriate and

thereby making chains among them.

LEVELS OF MANAGER

Managers are organizational members who are responsible for the work performance of

other organizational members. Managers have formal authority to use organizational resources

and to make decisions. In organizations, there are typically three levels of management: top-

level, middle-level, and first-level. These three main levels of managers form a hierarchy, in

which they are ranked in order of importance. In most organizations, the number of managers at

each level is such that the hierarchy resembles a pyramid, with many more first-level managers,

fewer middle managers, and the fewest managers at the top level. Each of these management

levels is described below in terms of their possible job titles and their primary responsibilities

and the paths taken to hold these positions. Additionally, there are differences across the

management levels as to what types of management tasks each does and the roles that they take

in their jobs.

Top level managers

Top-level managers, or top managers, are also called senior management or executives.

These individuals are at the top one or two levels in an organization, and hold titles such as:

Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operational Officer

(COO), Chief Information Officer (CIO) and Chair person of the Board, President, Vice

president and corporate head.

Often, a set of these managers will constitute the top management team, which is composed of

the CEO, the COO, and other department heads. Top-level managers make decisions affecting

the entirety of the firm. Top managers do not direct the day-to-day activities of the firm; rather,

they set goals for the organization and direct the company to achieve them. Top managers are

ultimately responsible for the performance of the organization, and often, these managers have

very visible jobs.

Top managers in most organizations have a great deal of managerial experience and have moved

up through the ranks of management within the company or in another firm. An exception to this

is a top manager who is also an entrepreneur; such an individual may start a small company and

manage it until it grows enough to support several levels of management. Many top managers

possess an advanced degree, such as a Masters in Business Administration, but such a degree is

not required.

Some CEOs are hired in from other top management positions in other companies. Conversely,

they may be promoted from within and groomed for top management with management

development activities, coaching, and mentoring. They may be tagged for promotion through

succession planning, which identifies high potential managers.

Middle level managers

Middle-level managers, or middle managers, are those in the levels below top managers.

Middle managers' job titles include: General Manager, Plant manager, Regional manager, and

Divisional manager.

Middle-level managers are responsible for carrying out the goals set by top management. They

do so by setting goals for their departments and other business units. Middle managers can

motivate and assist first-line managers to achieve business objectives. Middle managers may also

communicate upward, by offering suggestions and feedback to top managers. Because middle

managers are more involved in the day-to-day workings of a company, they may provide

valuable information to top managers to help improve the organization's bottom line.

Jobs in middle management vary widely in terms of responsibility and salary. Depending on the

size of the company and the number of middle-level managers in the firm, middle managers may

supervise only a small group of employees, or they may manage very large groups, such as an

entire business location. Middle managers may be employees who were promoted from first-

level manager positions within the organization, or they may have been hired from outside the

firm. Some middle managers may have aspirations to hold positions in top management in the

future.

First level managers

First-level managers are also called first-line managers or supervisors. These managers

have job titles such as: Office manager, Shift supervisor, Department manager, Foreperson, Crew

leader, Store manager.

First-line managers are responsible for the daily management of line workers—the employees

who actually produce the product or offer the service. There are first-line managers in every

work unit in the organization. Although first-level managers typically do not set goals for the

organization, they have a very strong influence on the company. These are the managers that

most employees interact with on a daily basis, and if the managers perform poorly, employees

may also perform poorly, may lack motivation, or may leave the company.

TYPES OF MANAGER

Basically there are 2 types of managers,

LINE MANAGER

Definition

Person who heads revenue generating departments (manufacturing and selling) and is

responsible for achieving an the organization's main objectives by executing functions such as

policy making, target setting, decision making. Line manager may have direct control over staff

employees.

STAFF MANAGER

Definition

Person who is responsible for the performance of functions that provide support to line

managers and does the activities that support line functions such as accounting, maintenance,

personnel management. Staff manager may not have power over line managers.

Other of managers include types,

General Managers

Plan, organize, lead and control operation of an entire organization.

Financial Managers

Plan, organize, lead and control collection and payment of money and compliance with

state and federal laws governing money management.

Marketing Managers

Plan, organize, lead and control product research, development, advertisement and

delivery.

Human Resources Managers

Plan, organize, lead and control the hiring, training and compensation of employees.

Operations Managers

Plan, organize, lead and control the production and delivery of products and services as

needed to keep external paying customers satisfied.

LEVELS OF MANAGEMENT

The term ‘levels of management’ refers to a line of demarcation between various

managerial positions in an organisation. The number of levels of management increases when the

size of the business and workforce increases. There is a limit to the number of subordinates a

person can supervise. Levels of management are increased so as to achieve effective supervision.

The level of management refers to a line of separation between different positions held by

seniors and juniors drawn with a view to distinguish each other in respect of their duties,

responsibility, rights and authority.

CLASSIFICATION OF LEVELS

There are three levels of management-

Top management

Middle management

Lower or supervisory management

Top level management

Top management of a company consists of the Board of Directors and the Chief

Executive or the Managing Director. It is ultimate source of authority and it establishes goals and

policies for the organisation. It devotes more time on the planning and coordinating functions

The functions performed by the top management are stated below

1. Top management lays down the objectives of the organisation

2. It prepares strategic plans and policies for the organisation

3. It issues necessary instructions for the preparation of budget, schedules, procedures, etc.

4. It appoints the executives for the middle level

5. It coordinates the activities of different departments

6. It controls the activities of all departments with the help of reports, memoranda, etc.

7. It builds and maintains relations with the outside public.

Middle level management

Middle level management generally consists of heads of functional departments. They are

responsible to the top management for the efficient functioning of their departments. They

devote more time to the organisation and direction functions of management. The middle level

manager includes branch managers, superintendents, heads of varies sections.

The functions performed by the middle management are as follows

1. To run the details of the organisation, leaving the top managers as free as possible of

their responsibilities

2. To cooperate in making a smoothly functioning organisation

3. To understand the interlocking of departments in major policies

4. To achieve the coordination between the different parts of the organisation

5. To build up a contented and efficient staff where reward is given according to capacity

and merit and according to chance or length of service

6. To develop leaders for the future by broad training and experience.

7. To build a team spirit where all are working to provide a product or service wanted by

the society.

Supervisory or lower level management

Lower level management refers to those executives whose work is to oversee and direct

operative employees. This level includes supervisors, foremen, finance and accounts officers,

sales officers, etc. The essential feature of this level is that managers at this level are in direct

contact with the operative employees. They are more concerned with direction and control

functions of management as compared to planning and organising. They implement the policies

of top management communicated to them by the middle level managers.

The function of lower level management

1. To plan and organise the activities of the group.

2. To arrange for necessary materials, machines, tools, etc. for workers and to provide them

the necessary working environment.

3. To provide training to the workers.

4. To supervise and guide the subordinates.

5. To solve problem of workers.

6. To communicate workers problems to the higher level management.

MANAGER VERSUS NON MANAGER

Subject Non manager Manager

Essence Change Stability

Focus Leading people Managing work

Have Followers Subordinates

Horizon Long-term Short-term

Seeks Vision Objectives

Approach Sets direction  Plans detail

Decision Facilitates Makes

Power Personal charisma Formal authority

Appeal to Heart Head

Energy Passion Control

Dynamic Proactive Reactive

Persuasion Sell Tell

Style Transformational Transactional

Exchange Excitement for work Money for work

Likes Striving Action

Wants Achievement Results

Risk Takes Minimizes

Rules Breaks Makes

Conflict Uses Avoids

Direction New roads Existing roads

Truth Seeks Establishes

Concern What is right Being right

Credit Gives Takes

Blame Takes Blames

MANAGERIAL ROLES

MANAGER

A manager is one, who contributes to the organizational goals indirectly, by directing the efforts

of others and not by performing the task himself.

A role consists of the behaviour patterns expected of a manager within an organisation or a unit.

Henry Mintzberg conducted a comprehensive study of the nature of managerial roles in 1973.

He identified ten basic roles performed by the managers and classified them under three head.

1. Interpersonal roles

2. Information roles

3. Decisional roles

These roles are organized sets of behaviours belonging to a position- describes what managers

actually do, whereas functions of managers had historically described what managers should do.

Interpersonal roles

The interpersonal roles are as follows

Figurehead

This role is necessary because of the position occupied. It consists of such duties

as signing certain documents required by law and officially receiving visitors.

Leader

As a leader manages trains, encourages, remunerates, judges the subordinates.

Liaison

Manager serves as a liaison between outside contacts such as the community, suppliers

and others and the organisation.

Informational roles

The informational roles found by Mintzberg are

Monitor

As monitors, managers gather information in order to be well informed.

Disseminator

Managers are disseminators of information flowing from both external and internal

sources.

Spokes-person

As a spokes person or representatives of the organisation he speaks for subordinates to

superior and represent upper management to subordinates.

Decisional roles

The decisional roles of a manager are as follows

Entrepreneur

Acts as a initiator, designer and encourager of change and innovation.

Disturbance handlers

Takes corrective action when organization faces unexpected major difficulties.

Resource allocation

Distributes resources of all types, including time, finding equipment and human

resources.

Negotiator

Represent the organization in major negotiations affecting the manager’s areas of

responsibility. He negotiates with customers, suppliers, etc.

MANAGERIAL SKILLS

Managerial skills are the ability of a manager to make a smooth functioning team of

people working under him. Manger is to reconcile. Co-ordinate and appraise the various

viewpoints and talents of people working under him towards the achievement of organization

goals and objectives.

We can broadly classify the skills required by managers into the following three categories:

1. Conceptual skills

2. Human skills

3. Technical skills

Technical skills deal with the jobs, human skills with persons and conceptual skills with ideas.

These three types of skills are inter-related and they are required by all managers. But the

proportion or relative significance of these skills varies with the levels of management

1. Conceptual skills

Conceptual skill is the ability to see the organization as a whole, to recognize inter-

relationships among different functions of the business and external forces and to guide

effectively the organizational efforts. Conceptual skills are used for abstract thinking, and for the

concept development involved in planning and strategy formulation.

Conceptual skills involve the ability to understand how the parts of an organization

depend on each other. A manager needs conceptual skills to recognize the interrelationship of

various situational factors and therefore, make decisions that will be in the best interest of the

organization.

2. Human skills

Human skills are essential to work with others and achieve their cooperation. Human skills

are the abilities needed to resolve conflicts, motivate, lead and communicate effectively with

others. Because all work is done when people work together, human relations skills are equally

important at all levels of management. Every manager should be able to communicate effectively

and also understand what thoughts others are trying to convey.

3. Technical skills

Technical skills refer to specialized knowledge and proficiency in handling methods,

processes and techniques of specific jobs. These skills are most important at lower level of

management and much less important at upper levels.

Other essential managerial skills

Interpersonal skills –will enable to communicate with other people.

Diagnostic skills – give the ability to assess and react to individual situations.

Communication skills – relate closely to interpersonal skills and allow both relay and

receiving thoughts and ideas.

Decision-Making skills – allow recognizing problems and effectively identifying and

deciding on a plan of action.

Time-Management skills – allow organizing, prioritizing, and delegating work in the

most effective manner possible.

Key personal characteristics for managerial success

a) Physical – health, vigour, address.

b) Mental ability – to understand and learn’ judgment, mental, vigour and adaptability.

c) Moral – energy, firmness, willingness to accept responsibility, initiative, loyalty, tact and

dignity.

d) Educational – general acquaintance with matters not belonging exclusively to the

function performed.

e) Special knowledge – beat technical, commercial, financial, managerial etc..

f) Experience – arising from the work proper. The recollection of ideas of person as derived

from things.

g) Take advantage of technology.

h) Globalization

i) Entrepreneurship

j) Change in public expectation

k) Better environment for business

l) Balance of power with responsibility

m) Business has resources

n) Profit maximization

Key skills and competencies

Good Manager’s qualities should include:

Ability to make decisions under pressure.

Good communication skills.

Consultation skills.

Ability to cope with your own stress and other people’s.

Managerial skills.

Being able to work as a member of a team.

Good organization.

PRINCIPLES OF SCIENTIFIC MANAGEMENT

1. Replacing rule of thumb with science

Taylor has emphasized that in scientific management, organized knowledge should be

applied which will replace rule of thumb. While the use of scientific method denotes precision in

determining any aspect of work, rule of thumb emphasizes estimation. Since exactness of various

aspects of work like days fair work, standardization in work, differential piece rate for payment,

etc, is the basic core of scientific management, it is essential that all these are measured precisely

and should not be based on mere estimates; this approach can be adopted in all aspects of

managing

2. Harmony in group action

Taylor has emphasized that attempts should be made to obtain harmony in group action

rather than discord. Group harmony suggests that there should be mutual give and take situation

and proper understanding so that group as a whole contributes to the maximum.

3. Co-operation

Scientific management involves achieving co-operation rather than chaotic individualism.

Scientific management is based on mutual confidence, co-operation between management and

workers can be developed through mutual understanding and a change in thinking.

4. Maximum output

Scientific management involves continuous increase in production and productivity

instead of restricted production either by management or by workers. Taylor hated inefficiency

and deliberate

Curtailment of production. He decried quarrel over production and welcomed quarrel over

distribution, provided the product to be distributed had outgrown the size. Therefore he advised

the management and workers to “turn their attention towards increasing the size of the surplus

until the size of the surplus becomes so large that it is necessary to quarrel over how it shall be

divided.

5. Development of workers

In scientific management, all workers should be developed to the fullest extent possible

of their own and for the company’s highest prosperity. Development workers require their

scientific selection and providing them training at the workplace. Training should be provided to

the workers to keep them fully fit according to the requirement of new methods of working

which may different from the non-scientific methods.

FAYOL’S ADMINISTRATIVE MANAGEMENT

1. Division of work

Fayol had advocated division of work to take advantage of specialization. According to

him “specialization belongs to natural order. The workers always work on the same part, the

managers concerned always with the same matters; acquire an ability, sureness and accuracy

which reduce output. Each changes of work brings in it training and adaptation which reduces

output yet division of work has its limits which experience and a sense of proportion teach us

many not be exceeded. This division of workers can be applied at all level of organization

2. Authority and responsibility

The authority and responsibility are related, with the latter the corollary of the former and

arising from it. Fayol finds authority has continuation of official and personal factors. Official

authority is derived from the manager’s position and personal authority is derived from personal

qualities such as intelligence, experience, moral worth, past service, etc. Responsibility properly.

There should be parity of authority and responsibility.

3. Discipline

All the personnel serving in an organization should be disciplined. Discipline is

obedience, application, energy, behaviour, and outward mark of respect shown by employees.

Discipline may be of two types; self imposed discipline and command disciplines. Self imposed

discipline springs from within the individual and is in the nature of spontaneous response to a

skilful leader. Command discipline stems from a recognized authority and utilizes deterrents to

secure complained with a desired action, which is expressed by established customs, rules and

regulations. The ultimate strength of command discipline lies in its certainty of application. Such

a discipline can be obtained by sanctions in the forms of remuneration, warnings, suspension

demotion, dismissal, etc. However, while applying such sanctions, people and attendant,

dismissal, etc. However, while applying such sanctions, people and attendant circumstances must

be taken into account. This can be learned by experience and tact of the managers

4. Unity if command

Unity of command means that a person should get orders and instructions from only one

superior .The more completely an individual has a reporting relationship to single superior , the

less is the problem of the conflict in instructions and the greater is the feeling of the personal

responsibility for results.

Fayol has considered unity of command as an important aspect in, managing an organization. He

says that ‘should it be violated, authority is undermined; discipline is in jeopardy, order

distributed, and stability threatened.

5. Unity of direction

According to this principle, each group of activities with the same objective must have

one head and one plan. Unity of direction in the sense that the former is

concerned with functioning of the organization in respect of its grouping of the activities or

planning while the latter is concerned with personnel at all levels in the organization in terms of

reporting relationship. Unity of direction provides better coordination among various activities to

be undertaken by an organization

6. Subordinate of individual to general interest

Common interest is above the individual interest. Individual interest must be subordinate

to general interest when there is conflict between the two. However, factors like ambition,

laziness, weakness, etc, tend to reduce the importance of general interest. Therefore, superior

should set an example in fairness and goodness. The agreement between the employees should

be fair and there should be constant vigilance and supervision

7. Remuneration of personnel

Remuneration of employees should be fair and provide satisfaction to employees and

employers. Fayol did not favour profit-sharing plan for workers but advocated it for managers.

He was also in favour of non-financial benefits though these were possible only in the case of

large-scale organization.

8. Centralisation

Everything which goes to increase the importance of subordinate’s role is

decentralization; everything which goes to reduce it is centralization. Without using the term

centralization of authority, Fayol refers the extent to which authority is centralized or

decentralized are the question of proportion. In small firms, centralization is the natural order,

but in large firms, a series of intermediaries depends on the personal character of the manager,

his moral worth, the reliability of his subordinates, and also on the conditions or the business.

Since both absolute and relative values of managers and employees are constantly changing, it is

desirable that the degree of centralization or decentralization may itself vary constantly

9. Scalar chain

There should be a scalar chain of authority and of communication ranging from the

highest to the lowest. It suggests that each communication going up or coming down must flow

through each position in the line of authority. It can be short circuited only in special cases.

10. Order

This is a principle relating to the arrangement of things and people. In material order,

there should be a place for everything and everything should be in its place. Similarly in social

order, there should be the right man in the right place. That kind of order demands precise

knowledge of the human requirements and resources of the organization and a constant balance

between

Requirements and resources

11. Equity

Equity is the contribution of justice and kindness. Equity in treatment and behaviour is

liked by everyone and it brings loyalty in the organization. The application of equity requires

good sense, experience and good nature for soliciting loyalty and devotion from subordinate

12. Stability of tenure

No employee should be removed within short time. There should be reasonable security

of jobs. Stability of tenure is essential to get an employee accustomed to new work and

succeeding in doing it well. Unnecessary turnover is both cause and effect of bad management

13. Initiative

Within the limits of authority and discipline, mangers should encourage their employees

for taking initiative. Initiative is concerned with thinking out and execution of a plan. Initiative

increases zeal and energy on the part of human beings

14. Espirit de corps

This is the principle of union is strength and extension of unity of command for

establishing team work. The manger should encourage spirit de crops among his employees. The

erring employees should be set right by oral directions and not by demanding written

explanations

ELTON MAYO AND HAWTHORNE STUDIES

Elton mayo a hardware consultant and his associates conducted a series of studies at the

Hawthorne plant of western electronic. Originally, the research was a application of Tailors

management science techniques, designed to improve production efficiency. The first study

involved the manipulation of illumination for one group of workers and comparing their output

with that of another group whose illumination was hold constant. To the amazement of Mayo

colleagues when the illumination was increased for the test group production went up in both

groups. Further, more productivity continued to increase for both groups, even when the

illumination was decreased for the test group.

Eventually, Mayo and his associates concluded that a new “social setting” created by

their test had accounted for the increase in productivity. Their finding in now known as

Hawthorne effect or the tendency for people, who are singled out for special attention to improve

their performance.

To elaborate the study, the Hawthorne plant of general electric company, Chicago was

manufacturing telephone system bell. There were 30,000 employers employed at the time of

experiment. These were great deal of dissatisfaction of workers and production was not up to the

mark. In order to estimate the real cause behind this phenomenon a team was constituted led by

Elton Mayo (psychologist) white head & co. representative, William Dickson.

The researchers originally set out to study the relationship between productivity and

physical working conditions.

They conducted various researches in 4 phases,

1. Illumination experiment (1924-27)

2. Relay assembly test room experiment (1927-28)

3. Mass interview programme (1928-30)

4. Bank writing observation room experiments (1931-32)

1. Illumination experiments (1924-27)

Illumination experiments were undertaken to find out how varying levels of illumination

(amount of light at the work place) affected the productivity higher illumination, higher

productivity.

2. Relay assembly test room experiment (1927-28)

Relay assembly test room experiment was designed to determine the effect of changes in

various job conditions on group productivity.

3. Mass interview programme (1928-30)

During the course of experiments, about 20,000 interviews were conducted, to determine

employee’s attitude towards company’s supervision, promotion and wages. The interview

programme gave the valuable insights about the human behaviour in the company.

4. Bank Wiring Observation Room Experiment (1931-32)

This 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. There were

no significant changes in the two because of the maintenance of normal conditions.

The Bank Wiring Experiment included the following observation

1. Each individual was restricting output

2. The group had its own “unofficial” standards of performance.

3. Individual output remained fairly constant over a period of time.

4. Departmental records were distorted due to differences between actual and reported

output or between standard and reported working time

Criticism of human relations approach

The human relation approach has been criticised on the following grounds:

1. Lack of Scientific Validity

2. Limited Focus on Work

3. Over emphasis on group

4. Over stretching of human relations

5. Over-stress on Socio-psychological factors

6. Negative view of conflict

THE LEARNING ORGANIZATION

Many consultants and organizations have recognized the commercial significance of

organizational learning – and the notion of the ‘learning organization’ has been a central

orienting point in this. Writers have sought to identify templates, or ideal forms, ‘which real

organizations could attempt to emulate’ (Easterby-Smith and Araujo 1999: 2). In this sense the

learning organization is an ideal, ‘towards which organizations have to evolve in order to be able

to respond to the various pressures [they face] (Finger and Brand 1999: 136). It is characterized

by recognition that ‘individual and collective learning are key’.

The literature on organizational learning has concentrated on the detached collection and analysis

of the processes involved in individual and collective learning inside organizations; whereas the

learning organizations literature has an action orientation, and is geared toward using specific

diagnostic and evaluative methodological tools which can help to identify, promote and evaluate

the quality of learning processes inside organizations.

Three definitions of a learning organization

Learning organizations, where people continually expand their capacity to create the

results they truly desire, where new and expansive patterns of thinking are nurtured,

where collective aspiration is set free, and where people are continually learning to see

the whole together.- Senge

The Learning Company is a vision of what might be possible. It is not brought about

simply by training individuals; it can only happen as a result of learning at the whole

organization level. Learning Company is an organization that facilitates the learning of

all its members and continuously transforms itself. – Pedler

Learning organizations are characterized by total employee involvement in a process of

collaboratively conducted, collectively accountable change directed towards shared

values or principles. Watkins and Marsick

The following CHARACTERISTICS appear in some form in the more popular conceptions.

Learning organizations:

a) Provide continuous learning opportunities.

b) Use learning to reach their goals.

c) Link individual performance with organizational performance.

d) Foster inquiry and dialogue, making it safe for people to share openly and take risks.

e) Embrace creative tension as a source of energy and renewal.

f) Are continuously aware of and interact with their environment.

There are certain ARGUMENTS regarding the concept of learning organization, which are

listed below:

a) Focuses mainly on the cultural dimension: ‘Focusing exclusively on training activities

in order to foster learning… favours this purely cultural bias’

b) Favours individual and collective learning processes at all levels of the organization,

but does not connect them properly to the organization’s strategic objectives. It is,

therefore, imperative,

c) Remains rather vague. The exact functions of organizational learning need to be more

clearly defined.

CHARACTERISTICS OF A 21ST CENTURY MANAGER

Characteristics that result in the best performance of executive and senior level leaders

are identified along with the key skills, knowledge, and attributes of effective and

successful leaders which are then linked to a set of specific behaviours. Following an

executive summary, this manual provides an exploration of: managerial profiles; self

awareness; ethics and values; vision and mission; strategic thinking; managing the

external environment; power and influence; strategic planning and performance

measurement; collaboration; and team building.

CEOs responding to a recent survey by Chief Executive posit as an ideal a customer- and

quality-driven organization with a flatter management hierarchy. Also important, they

say, will be an organization's sense of vision - its ability to deploy a shared sense of

values in decision making - and its capacity to add significant value to products and

services.

''Breadth of training is important for the C.E.O. of the year 2000 in functions like

marketing, finance, production and human resource management.”

''Experience in diverse businesses as well as some work abroad,’’ is equally important for

an ambitious executive to perform his job effectively.

As for personal characteristics, the chief executive of tomorrow will be ''a leader, not a

boss,''- Dr.Fredrickson.

Unlike the former ITT Corporation chairman, Harold S. Geneen, an executive SHOULD

NOT be tough, autocratic, abrasive personality, which instill fear in subordinates.

The next century’s chief executive will need three characteristics - creativity, enthusiasms

and open-mindedness, the study said, and will also have a vision about the company's

strategic position in a global environment.

To convey ideas, this leader will have to be a good communicator, which means he or she

must learn the art of public speaking and develop a talent for dealing with the news

media.

The study stressed attitudinal differences among American, Japanese, European and Latin

American chief executives. The Japanese prefer future leaders with a technological

background; Americans play down foreign language ability while Europeans rank it

highly; Latin American executives expect that future company leaders should be talented

in international politics and the economics.

Aspects of business change in the 21st century. Environment of change. Business leaders know

they have to operate in this environment, where the only certainty is uncertainty. They see crises

as opportunities. Leadership in the 21st century is a collective task. There are no exceptional

individuals, just the ability to encourage good teams. Customer-oriented leadership and

transmitting that passion for the customer to the whole organisation. Experience-oriented

leadership. Appeal to emotions. Focus on innovation. Focus on a new concept of business, on

value-based management. Values are new business management tools that, unlike the classical

tools, commit and demand coherence of those who use them.

The 21st century company is a great actor of social change. We have been able to

advance in the world partly because of business. Then, what can we do to improve the business

world? The executive profile has certain risks: Over-valuing fads. Generalising the executive

profile. Thinking of the executive as a hero. Do not forget a company's missions: To provide

goods and services that are valued by its customers. To develop persons. To develop economic

values. To integrate in society, contributing something the more.

Twenty-first century leadership is going to be different from that of the 20th century. At

the same time, however, it will keep some characteristics. It will change throughout the 21st

century. It will not be the same. The factors of continuity with the 20th century: Executives will

maintain their active role in their day-to-day activities. They will also continue to be reactive.

Leadership in sundry activities. Their capabilities will include interpersonal relationships, using

their emotivity, capacity of synthesis and constant innovation. The executive will have a greater

need of a positive attitude toward learning. Also a greater capacity to cooperate with other social

institutions. The emotional component will be a differentiating value. The radius of trust is

shrinking. To lead will require building trust and first legitimacy.

SOCIAL RESPONSIBILITIES OF MANAGERS

The term social responsibility refers to both socio-economic and socio-human obligations of

the business. Every business manager should try to strike a balance between the social power and

the social responsibility. Social obligation and responsibilities of management can be studied

under two heads.

1. Internal social responsibilities

Are concerned with assuring due process, justice, equity and morality in the

selection of employees, their training and education.

2. External social responsibilities

Refer to such actions as stimulating minority entrepreneurship, improving the

balance of payment or training and hiring hard-core unemployed.

The management owes social obligations to two groups of society. They are

a) Insiders: shareholders and employees

b) Outsiders: customers, suppliers, government and the society as a whole.

Obligations and responsibilities towards shareholders or owners:

1. Stability and growth of the company

It is the duty of a manager to set that financial position of the company is good

and stable and is improving day by day.

2. Declaration of reasonable dividend

Shareholders expect a high rate of dividend on the money invested by them.

Therefore, the company must announce a reasonable dividend every year.

3. Protection of assets of the company:

The assets of the company are normally purchased with the funds provided by the

shareholders. It is the duty and responsibility of the manager that these properties must be

safeguarded.

4. Trustee of shareholder

The management is the custodian and the trustee of shareholder’s funds.

Therefore, the assets should be used for the business of the company only and the policies

followed by the manager should increase the welfare of the shareholders.

5. Information regarding financial position of a company:

It is the responsibility of the management to keep the shareholders well informed

about the progress and financial position of the company

.

Responsibilities towards customers

1. To meet needs of the consumers:

To produce satisfying goods which are capable for the consumers to purchase.

2. To produce right quality of goods:

To make goods of the right quality available to the right people at the right time

and place at reasonable prices.

3. To give prompt service to customers:

To provide adequate and courteous service to customers and to handle their

grievances carefully.

4. To follow fair trade practices:

Avoid indulging into unfair hands, unethical practices like black marketing etc.

5. True and fair advertisement:

Avoiding false advertisement and other statements to attract customers.

6. Proper distribution of goods:

The distribution of goods must be made properly so that the customers do not

have to face any difficulty in purchasing.

Responsibilities and obligation towards workers and employees

1. Fair wages

Paying reasonable wages and salaries to the employees to make them lead a

comfortable life.

2. Paying attention towards the worker’s rights

Attention towards the worker’s rights to fair wages, to participate in decision

affecting their working life to allow them to form trade unions etc.

3. Cooperation

Efforts to win cooperation of the workers by creating the conditions in which the

workers are willing to put forward their best efforts towards the goals.

4. Better working conditions

It is necessary to maintain the health of the workers.

5. Adequate service benefits

Providing service benefits like housing, medical facilities, insurance and

retirement benefits etc.

6. Opportunities for their growth

Developing their capabilities through training, education and enjoyment of

freedom of the greatest possible extent.

Responsibility and obligations towards society and community

1. To achieve socio-economic objectives

Management must try to create goodwill and reputation in the market. It should

take into consideration or indulge in any practice which is not fair and just from the social

point of view.

2. Improvement of local environment

The manager should keep the healthy environmental conditions where the

production is being carried on. He should take all the possible measure to prevent water

and air pollution and should contribute to the community development activities.

3. Help in employment opportunities

To help in the increase of direct and indirect employment opportunities to workers

in the area where the industry is functioning.

4. Welfare activities of the community

The management must provide all possible facilities and held for the upliftment of

the weaker sections of the society.

5. Efficient use of resources

The manager should plan in such a way that capital, raw material, machines,

technical knowledge etc are best utilized.

6. Follow the ethics of business

Should not indulge into anti –social and unfair- trade practices like hoarding etc

which may destroy the goodwill of the firm.

Responsibilities towards government

1. To abide by the laws of the country

2. To pay government taxes honestly, fully and in time.

3. To avoid giving bribe to the government employees.

4. To encourage fair trade practices.

5. To discourage the concentration of economic power.

6. To discourage activities this is not in accordance with the business.

GLOBAL AWARENESS

• It is a desire to learn about and a willingness to respect people from other cultures.

• The understanding that everyone has a culture which affects the way we view ourselves

and the world.

• Global Awareness understands cultures, languages & traditions other than your own.

Why is global awareness important?

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