Principle Of Managements

(POM) Notes

Mr. M.S.R Sneha

Associate Professor & Head of the Department MBA,

Gandhi Engineering College,

Bhubaneswar.

m-09160854468 & 07381054102

CONCEPT OF MANAGEMENT

Definition:

“Management is the art of getting work done through and with formally organised groups in order to accomplish organizational objectives.”

“Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.”

Nature & Characteristics of Management:

Multi-disciplinary. Dynamic Nature of Principles.(Flexible principles) Management is a continuous process. Relative, not Absolute Principles.(Situational) Management is a profession. Management is Universal Management is a Science in theory and an art in practice. Management is always directed towards resources. Management is objective – oriented. Management is action – oriented.

Significance or Importance:

Optimum Utilisation of Resources. To achieve objectives effectively.

Development of resources. To increase productivity. To Incorporate Innovations. To maintain harmony within the organisation. Stability in the society. Smooth functioning of an organisation. Integrating Various Interest Groups. Ensures Productivity, Efficiency and Effectiveness.

Roles of Managers: Proposed by Mintzberg.

Interpersonal Roles: The Figurehead Role The Leader Role The Liaison Role Informational Roles: The Recipient Role The Disseminator Role The Spokesman Role Decision Roles: The Entrepreneurial Role The Disturbance – Handler Role The Resource Allocator Role The Negotiator Role

Skills of a Manager: Proposed by Robert L. Katz.

Technical Skills: Knowledge and proficiency in designing and formation of Methods, Policies and Procedures.

Human Skills: Interpersonal Skills, Leadership Skills and so on. Conceptual Skills: Ability to recognise the relationship between

various elements of and organisation. Design Skills: Ability to foreseeing and solving problems.

Scientific Management (F. W. Taylor, 1910)

Principles of Scientific management:

Replace Rule-of-thumb with Science. (Time & Motion Study)

Co-operation between Labour and Management.

Harmony in Group Action.

Maximum Output.

Development of Workers.

Features of Scientific Management:

Separation of Planning and Doing. (Fig) Functional Foremanship. (Fig) Job Analysis. Standardisation. Scientific Selection and Training of Workers. Financial Incentives. Economy. Mental Revolution.

Modern Management Theory (Functional/ Process/ Administrative Theory) (Henri Fayol, 1910)

Fayol’s Principles of Management:

1. Division of Work.2. Authority & Responsibility.3. Discipline.4. Unity of Command.5. Centralisation.6. Unity of Direction.7. Scalar Chain.8. Subordination of Individual Interest to General Interest.9. Remuneration.10. Order.11. Initiative.12. Stability of Tenure. (Job Security)13. Equity.14. Esprit de Corps. (In Unity lies Strength)

Controlling Definition:

“Controlling is determining what is being accomplished, evaluating the performance and if necessary taking corrective action so that the performance takes place according to plan”

Nature of Control:

Control forward looking. Control is a continuous process.

Control is a coordinated integrated system. Control improves productivity. Control is a problem solving technique Control helps in better planning. Control helps in effective change. Control reduces unnecessary time and cost.

Uses of Control:

Adjustments in operations. Policy Verification. Managerial Responsibility. Psychological Pressure. Coordination in Action. Organisational Efficiency and effectiveness.

Process of Control:

Study of Objectives. Understanding Standards of Performance. Measuring Actual Performance. Comparison of Actual to Standard performance. Identification of deviation. Analysis of causes for deviation. Corrective action plan designing. Implementation of plans. Feedback & Review.

Concept of Planning

Definition:“Planning is the process of determination of a future course of action in order to achieve the organisational objectives”

“Planning is the process setting mission and objectives and selecting from alternative future courses of action in order to achieve them.”

Nature & Features of Planning:

Planning is the primary most Function Planning is a continous process. Planning is action - oriented. Planning is goal – directed. Planning exists at all levels of management. It involves choosing from alternate courses of action. Planning is flexible to accommodate unexpected alterations in

environment.

Planning also provides performance standards.

Significance of Planning:

Helps focus on objectives. Helps in co-ordination. To increase Organisational Effectiveness. To help in control. Planning increases productivity by reducing time and cost. Threats could be averted with proper planning. Planning facilitates effective delegation of authority.

Process of Planning:

Perception of Opportunities. Establishment of Objectives. Planning Premises. Identification of Alternatives. Evaluation of Alternatives. Choosing the Perceived Best Alternative. Formulating Support Plans. Sequencing Plans Based on Budgets and Process. Creating Channels for Feedback and Review.

Is Management is an Art or Science?

Management as an Art

Art involves the systematic application of theoretical knowledge and personal skills to achieve desired results. The function of art is to effect change and to bring about desired results through deliberate efforts. Art represents 'how' of human behavior because it is the know-how to accomplish concrete practical results.

Art is a personalized process as every artist has his own style. Art is essentially creative and the success of an artist is measured by the results he achieves. A carpenter making furniture out of wood and a goldsmith shaping gold into ornaments are examples of art.

Art prescribes how to do things and it can be improved through continuous practice. Art is result-oriented involving practical way of doing specific things.

It consists of bringing about desired results through the use of skills. Art involves practical application of theoretical knowledge.

Management is essentially an art because of the following reasons:

(a) The process of management involves the use of knowledge and skills. Every manager has to apply certain knowhow and skills while dealing with people.

(b) Management seeks to achieve concrete practical results, e.g., profits, service, etc. According to Prof. John F. Mee, "management is the art of securing maximum results with a minimum of effort so as to secure maximum prosperity and happiness for both employer and employee and give the public best possible service."

(c) Like any other art, management is creative. It brings out new situations and makes resources productive. In fact, management is one" of the most creative arts because it requires molding and welding the attitudes and behavior of people at work for the accomplishment of specific goals in a changing environment.

It is the art of securing desired response from people. Management makes things happen.

(d) Like any other art, management is a personalized process. Every manager has his own approach and technique depending upon his perception and the environmental conditions.

(e) As an art, management requires judgment and skills. The art of management can be refined with continuous practice of management theories and principles.

The art of management is as old as human civilization. The importance of management art has increased with rapid growth in the number size and complexity of organizations.

Management as a Science:

Science is an organized or systematized body of knowledge pertaining to a particular field of enquiry. Science is systematized in the sense that it establishes cause and effect relationship between different variables.

Such systematized body of knowledge contains concepts, principles and theories which help to explain past events and to predict the outcome of specific actions. These principles are capable of universal application, i.e., they can be applied under different situations.

They represent fundamental truths derived through empirical results. These principles or basic truths are developed through scientific methods of continuous observation, experiment and testing.

When generalizations or hypotheses are empirically verified for accuracy through continuous observation and experimentation they become principles. Science explains 'why' of human behavior.

Management is a science because it contains all the characteristics of science. Firstly, there is a systematized body of knowledge in manage-ment. Principles are now available in every function of management and these principles help to improve managerial effectiveness.

For instance, there are a number of principles which serve as guidelines for delegating authority and thereby designing an effective organization structure. Similarly, there are several techniques (ways of doing things) in the field of management.

Budgeting, cost accounting, ratio analysis, rate of return on investment, critical path method (CPM), programme evaluation and review technique (PERT) are some of these techniques which facilitate better management.

Secondly, principles of management have been developed through continuous observations and empirical verification. Thirdly, management principles are capable of universal application.

‘Management is an art of getting things done through and with people in formally organized grounds’. Comment and discuss the nature and functions of management.

MANAGEMENT FUNCTIONS(ELEMENTS OF MANAGEMENT PROCESS)

Elements of management process are known as managerial functions. Different experts have conceptualized managerial functions in different ways. Henri Fayol, who pioneered the management process approach, identified the functions of management as planning, organizing, commanding, coordinating and controlling. Ernest Dale classified managerial functions into planning, organizing, staffing, directing, controlling, innovation and representation. Luther Gullick used the acronym (keyword) POSDCORB which stands for the functions of planning (P), organizing (O), staffing (S), directing (D), co-ordinating (CO), reporting (R) and budgeting (B). Harold Koontz and Cyrill O’Donnell have adopted the conceptual framework of planning, organizing, staffing, directing and controlling. These five functions and their parts are given in table.

Managerial Functions and Sub-functions

Function Sub-functions

Planning Forecasting, decision making, strategy

formulation, policy making, programming, scheduling, budgeting, problem solving, innovation, investigation and research;

Organizing Functionalisation, divisionalisation,

departmentalization,delegation, decentralization, activity analysis, task allocation;

Staffing Manpower planning, recruitment, selection,

training, placement, compensation, promotion, appraisal, etc

Directing Supervision, motivation, communication,

leadership, activating, etc.

Controlling Fixation of standards, recording, measurement, reporting, corrective action.

Innovation implies creative thinking designed for change and improvement. It is a part of the broader function of planning because planning is carried out not only to ensure survival but progress of the enterprise too. Budgeting is also a sub-function of planning as it includes allocation of resources. Representation implies acting as a spokesperson of the company. It cannot be considered as a managerial function because only the chief executive has the authority to formally represent the company.

The functions of management which constitute the management process are described below:

Planning is the process of determining the organizational objectives and the formulation of strategies, policies and programmes for achieving them. Planning is future-oriented because it involves charting out the desired future direction for the organisation’s activities. Planning is mental or intellectual process. It provides a framework for performance. Plans become the guides by which (a) the organization obtains and commits resources required to reach its objectives, (b) members of the organization can pull together in the direction consistent with the organizational objectives, and (c) progress toward the objectives is monitored so that corrective action may

be taken if the progress is unsatisfactory. Plans may be long-term or short-term in nature.

Planning provides answers to the following questions: (i) Where are we now? (organisation’s strengths and weaknesses), (ii) Where we want to go? (objectives framed in the light of environmental opportunities and threats), and (iii) How are we going to get there? (plans designed to achieve the objectives). The planning process consist of the following steps:

1. Evaluating the environment and resources of the organization.2. Establishing organizational objectives.3. Developing strategies and other plans to achieve the objectives.

Organizing Once organizational objectives and the plans to reach them are established managers design and develop an organization that can successfully implement the established plans. Different objectives may require different types of organizations. Organizing is the process of designing the structure of organizational activities, authority responsibility relationships among the members. It consists of the following activities:

a) Determining and defining the activities required to achieve the established objectives;

b) Grouping these activities into logical and convenient units;c) Assigning the activities and duties to specific positions;d) Delegating adequate authority to the concerned persons;e) Fixing responsibility for proper performance; andf) Coordinating horizontal and vertical relationships throughout the

structure.

Staffing is the process of determining the manpower requirements of the organization and of filling the various managerial and nonmanagerial positions with competent people. It involves fitting the right person to the right job on a sustained basis and strengthening the human resources of the organization. As a managerial function staffing is concerned with deployment and development of the human resources essential for the effective use of physical and financial resources so as to achieve the organizational objectives. An organization requires people to assume predetermined roles, to carry out activities and to produce results in accordance with the established plans. Staffing was earlier considered to be a part of organizing. But in recent years, it has come to be recognized as a distinct function of management due to the key role of human resources in organizations. Staffing consists of the following activities:

1. Manpower Planning : It implies the estimation and determination of the manpower requirements of the organization. It serves as the basis of the staffing function. The manpower requirements of an organization are determined on the basis of the range of activities to be performed, production and sales budgets, production technology, the degree of differentiation, estimated employee turnover, etc. In addition to the number of personnel required, the quality of personnel in terms of their skills, knowledge, experience etc., is determined on the basis of job analysis.

2. Recruitment : It means exploring the internal an external sources of manpower. Management must develop and nurture the sources from which prospective job incumbents could be selected for the organization.

3. Selection : It involves choosing the right candidates for each job. Job specifications, selection procedures and selection techniques are devised and administered for this purpose. Different jobs may require different techniques and procedures of selection. Tests and interviews are very

important techniques. But great care is essential for selecting candidates out of all the applicants.

4. Orientation : When the selected candidates join the organization, they need to be acquainted with the existing staff, policies and rules of the organization, etc. This familiarization and socialization process is known as orientation or induction.

5. Placement : It involves assigning specific jobs to the new employees. While placing employees on jobs, the job requirements should be matched with the knowledge, skills, experience and attitudes of the candidates.

6. Training and Development : Some of the new employees may be initially trained on the job or by rotating them among different jobs. Training and development programmes are designed and implemented to improve the knowledge, skills and attitudes of executive and non-executive employees.

Performance appraisal, compensation, promotion, maintenance, etc., are other parts of the staffing function. Staffing is a line function and it is the responsibility of every manager. However, in large organizations much of the staffing functions is handled by the personnel department which contains specialized and professional experts in the management of personnel. Modern experts prefer to call the staffing or personnel management function as Human Resource Management.

Staffing function has become increasingly important over the years. People represent the most important asset of an organization. An organization staffed with good quality human resources in terms of their skills, capabilities and attitudes enjoys a differential advantage over other organizations. Staffing policies and practices play a significant role in achieving such a distinctive or competitive advantage. Good executive talent is scarce in India. An imaginative and dynamic staffing can enable an

organization to face this problem to a large extent. Staffing expenditure constitutes a significant proportion of the total cost of an organization. Effective staffing enables the organization to obtain optimum return on the investment in staffing. The way staffing function is handled shapes the attitudes, orientations and performance of employees. Management must establish and institutionalize sound traditions on staffing so that the organization is always able to attract, develop and retain good quality human resources.

Directing It involves the implementation of plans by mobilizing individual and group efforts through motivation, communication, leadership and supervision. Directing may be defined as the process of activating the efforts of employees towards the achievement of organizational objectives. It involves working directly with people. For getting the employees to perform, management has to use several techniques.

Controlling It is the process of regulating the ongoing activities of the organization to ensure that they are in conformity with the established plans and produce the desired results. Through the controlling function, management can keep the organization on its chosen track. The process of control involves the following steps:

a) Establishing standards of performance.b) Measuring current performance.c) Comparing actual results with the established standards.d) Detecting deviations from the standards.e) Taking corrective actions for significant deviations.

2. Define Management ? Differentiate Between administration and Management with suitable examples.

MANAGEMENT AND ADMINISTRATION:

A) TERMINOLOGICAL CONFLICT

Before we proceed further to analyse the nature of management, it is desirable to resolve the terminological conflict between management and administration as there is often a terminological conflict between the two. Some authors suggest that there is no fundamental difference between management and administration, whatever difference between the two exists, it exists only in terms of their usage in different walks of life. Other authors suggest that these two terms are different and .involve different sets of activities. Therefore, resolution of this conflict is necessary.

At the initial level of development of management thought, no distinction was made between management and administration and both the terms were used interchangeably. In 1923, the terminological conflict between the two terms was raised by Oliver Sheldon in his book 'The Philosophy of Management' when he emphasised administration as decision-making function and management as execution function. After that, this distinction between the two terms was emphasised by many and the terminological conflict proceeded further. Various views expressed in this regard have led to the emergence of three approaches:

1. Administration is above management;

2. Administration is a. part of management; and 3. Management and administration are same.

Administration is Above Management

According to many classical thinkers, administration is above management so far as different functions in 'the organisation are concerned. They perceive that both administration and management activities are different though both of them may be performed by a single individual in an organisation. Prominent among them are Oliver Sheldon, William Spriegal, Milward, Lansberg, Ordway Tead, Florence, etc. The general view is that administration relates to policy formulation arid management relates to policy execution and these two activities are not the same. For example, Spriegal states that:

"Administration is that phase of a busihess enterprise that concerns itself with the overall determination of institutional objectives and the policies are necessary to be followed in achieving those objectives. Management, on the other hand, is an executive function which is primarily concerned with carrying out broad policies laid down by the administration.

Similar view has been expressed by Milward when he states that:

"Administration is primarily the process and agency used to establish the objective ,or purpose which an undertaking and its staff are to achieve; secondly, administration has to plan and to stabilize the

broad lines or principles which will govern action. These broad lines are usually called policies. Management is the process and agency through which execution of policy is planned and super vised.

The basic approach of these authors is that administration determines the basic framework of the organisation within which managerial functions are undertaken. Since these sets of functions are different, different types of persons with different /sets of qualities are required.' Based on this approach, various authors have suggested the difference between administration and management as shown, in Table 1.1.

PRINCIPLES AND PRACTICE OF MANAGEMENT

TABLE 1.1: Difference between administration and management

Basis of difference Administration ManagementLevel in organisation Top level Middle and lower level

Major focus' Policy formulation and objective

determination

Policy execution for objective achievement

Nature of functions Determinative ExecutiveScope of functions Broad and conceptual Narrow and

operational Mostly internal

Factors affecting decisions

Mostly external Mostly internal

Employer-employee relations

Entrepreneurs and Owners

Employees

Qualities required Administrative Technical

The classical authors on management appear to be influenced by the fact that administrative process in non-business activities was well developed as compared to management. It can be seen in the next chapter that most of early contributors to management thought studied managerial process in the business organizations comparatively at lower levels whose primary responsibility was to execute what was decided by higher-level management. Therefore, they could perceive the functions of management as limited to lower levels only. The only exception came from Henry Fayol who studied the entire management functions and never distinguished between management and administration.

Administration is a Part of Management

There is another school of thought which treats management as more comprehensive function which includes administration also. For example; Brech has viewed management and administration in the following way:

"Management is a generic name for the total process of executive control in industry or commerce. It is a social process entailing responsibility for the effective and economical planning and regulation of the operation of an enterprise, in the fulfillment of a given purpose or task. Administration is that part of management which is concerned with the installation and carrying out of the procedures by which it is laid down and communicated, and the process of activities regulated

and checked against plans.

If this view is accepted, administration becomes a subordinate function to overall management functions. From this point of view, administration is concerned with day-to-day function and is a part of management. According to this approach, the previous analysis, that is, administration is above management, stands completely reversed.

Management and Administration are Same According to the third approach which is the most popular

and practical one, management and administration are same. Both involve the same functions, principles and objectives. For example, while speaking at the Second International Congress of Administrative Science, Fayol, one of the most important early thinkers on management thought, has said, "all undertakings require planning, organisation, command, coordination and control, and in order to function properly, all must observe the same general principles. We are no longer confronted with several administrative sciences but with one which can be applied equally well to public and private affairs." Thus there is no difference between management and administration. For example, McFarland, who made distinction between management and administration in an exaction of his book, revised his stand and viewed that it is difficult to make distinct between management and administration; both are· similar to each other. This, management and administration are synonymous; the difference between the two terms lies mostly in their usage in different

countries or different fields of human organizations. For example, Lepawsky has made observation that: "The British conception seems to be the general European usage in which management is given a broader meaning than administration. In American usage, administration includes management and organisation."

The distinction between the two terms may be drawn by analyzing the origin of the word administration. Its origin is found in the bureaucratic structure of government or in regulation of some laws. The government often uses the word administrator, instead of manager, to handle and manage its affairs. fu law also, administrators are appointed to look after the estate of a deceased person. While handling the government affairs, administrators are to execute the broad policies laid down by the government, though they may also participate in policy formulation. Similarly, the estate administrators keep intact the property and manage the estate according to some specific mandates of law. On the other hand, management is normally used in business sphere. However, whether administration is used in non-business fields and management is used in business field does not make a fundamental distinction. between the two because of similarity of the process involved in these. fu fact, even this distinction is also disappearing. For example many authors have written books under the title "Business Administration" which implies that these books would be used by persons acquiring knowledge to be utilized in handling business affairs. Similarly, many institutions offering management courses offer M.B.A. degrees for their management

graduates while others offer M.B.M. degrees for the similar type of students. Thus, in practice, the difference between the two is disappearing fast.

The basic point of controversy between management and administration lies in terms of coverage of activities. The controversy arises because people call the various level management functions differently. For example, the contents of management functions in terms of policy formulation and execution can be presented as follows. Some call the formulation function as administration, others call it management. However, both are management functions, as shown in Figure 1.2.

3. Explain the contributions of Peter F. Drucker to Modern Management.

CONTRIBUTIONS OF PETER DRUCKER

Among the contemporary management thinkers, Peter Drucker outshines all. He has varied experience and background which include psychology, sociology, law, and journalism. Through his consultancy assignments, he has developed solutions to number of managerial problems. Therefore, his contributions cover various approaches of management. He has written many books and papers. The more important books are The Practice of Management (1954), Managing by Results (1964), The Effective Executive (1967, The Age of Discontinuity (1969), Management : Tasks, Responsibilities and Practices (1974) , and Management Challenges for 21st

Century (1999), The main contributionsof Drucker can be presented as follows;

1. Nature of Management. Drucker is against bureaucratic management and has emphasized management with creative and innovative characteristics. The basic objective of management is to lead towards innovation. The concept of innovation is quite broad. 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 ha sit s own tools, skills, techniques, and approaches. However, management is more a practice rather than a science. Thus, Drucker may be placed in ‘empirical school of management’. While taking management as a profession, Drucker does not advocate to

treat management as a strict profession but only a liberal profession which places more emphasis that managers should not only have skills and techniques but should have right perspective putting the things into practice. They should be good practitioners so that they can understand the social and cultural requirements of various organizations and countries.

2. Management Functions. According to Drucker, management is the organ of its institution. It has no function in itself, and no existence in itself. He sees management through its tasks. Accordingly, there are basic functions of a manager which he must perform to enable the institution to make its contributions 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. All these three functions are performed simultaneously within the same managerial action. A manager has to act as a administrator where he has to improve upon what already exists and is already known. He has to act as entrepreneur in redirecting the resources from areas of low or diminishing results to areas of high or increasing results. Thus, a manager has to perform several functions; setting of objectives, decision – making, organising and motivating. Drucker has attached great importance to the objective setting function and has specified eight areas where clear objectives setting is required. These are: market standing, innovation, productivity, physical and financial resources, profitability, managerial performance and development, worker performance and attitude, and public responsibility.

3. Organisation 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 organised for performance; (ii) it should contain the least possible number of

managerial levels ; and (iii) it must make possible the training and testing of tomorrow’s top mangers -giving responsibility to a manager while still he is young. He has identified three basic aspects in organizing ; activity analysis, decision analysis, and relation analysis. An activity analysis shows what work has to be performed, what kind of work should be put together, and what enphasis is to be given to each activity in the organization structure. Decision analysis takes into account the four aspects of a decision over other functions, number of qualitative factors that enter into it, and whether the decision is periodically recurrent or rare. Such an analysis will determine the level at which the decision can be made. Relation analysis helps in defining the structure and also to give guidance in manning the structure.

4. 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. It creates a new constitution and new ordering principle. He has emphasized the close links between the decisions adopted by the top management on the one hand and the autonomous unit on the other. This is just like a relationship between federal government and state governments. In a federal organization, local managements should also participate in the decisions that set the limits of their own authority. Federalism has certain positive values over other methods of organizing. These are as follows: (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; and (iv) it helps to resolve the problem of continuity through giving the managers of various units education in top management problems and functions while in an operating position.

5. Management by objectives. Management by objectives (Mbo) is regarded as one of the most 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. According to Drucker, Mbo is not only a technique of management but it is a philosophy of managing. It transforms the basic assumptions of managing from exercising control to self-control. Therefore, in order to practise Mbo, the organization must change it self. Mbo has become such a popular way of managing that today it is regarded as the most modern management approach. In fact, it has revolutionalised the management process.

6. Organisational Changes. Drucker has visualized 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 organizations but not the rapid changes. Since rapid changes are occurring in the society, human beings should develop philosophy to face the changes and take them as challenges for making the society better. This can be done by developing dynamic organizations which are able to absorb changes much faster than static ones.

Drucker’s contributions have made tremendous impact on the management practices. His contribution have been recognized even by the management thinkers of Socialist Bloc. For example, Vishiani, a USSR management thinker, writes about Drucker as follows: “Drucker shows a certain foresightedness and understanding of the development prospects of modern production when he opposes the view that worker is no more than an appendage of machine. Moved by the desire to strengthen the position of capitalism, he endeavors to give due consideration also to some objective trends in production

management. Drucker, therefore, tells the industrialists not to fear a limited participation of the workers in the management of production processes. He warns them that if they do not abandon that fear, the consequences may be fatal to them”. Drucker is perhaps the only Western management thinker who has attracted so much attention of the communist world.

MASLOW'S NEED HIERARCHY

The behaviour of an individual at a particular moment is usually determined by his strongest need. Psychologists claim that needs have a certain priority. As the more basic needs are satisfied, an individual seeks to satisfy the higher needs. If his basic needs are not met, efforts to satisfy the higher needs should be postponed. A.H. Maslow, a famous social scientist, has given a framework that helps to explain the strength of certain needs.6 According to him, there seems to be a hierarchy. into which human needs are arranged as shown in Figure 23.5 (page :;74). 1. Physiological Needs. The physiological needs are at the top of the hierarchy because they tend to have the highest strength until they ,are reasonably satisfied. Until these needs are satisfied to the degree needed for the efficient operation of the body, the majority of a person's activities will probably be at this level, and the other levels will provide him with little motivation. A famous saying 'man can live on bread alone if there is no bread' suggests that human beings first try to acquire necessities for their survival.

2. Safety Needs. Once the physiological needs are satisfied to a reasonable level-it is not necessary that they are fully satisfied and degree of reasonableness is subjective-other levels of needs become important. In this hierarchy come the need for safety, that is need for being free of physical danger or self-preservation, In the industrial society, safety needs may take considerable importance in the context of' the dependent

relationship of employees to employers, As pointed out by McGregor, the safety needs may serve as motivators in such circumstances as arbitrary management actions, behaviour which arouses uncertainty with respect to continued unem-ployment and unpredictable administration of policy? Peter F. Drucker has suggested that one's attitude towards security is an important consideration in choosing a job. Organization can influence these security needs either positively through pension plan, insurance plan, etc.-or negatively by arousing fears of being fired or laid off, or demoted ..

3. Social Needs. After the first two needs are satisfied, social needs become important in the need hierarchy. Since man is a social being, he has a need to belong and to be accepted by various groups. When social needs become dominant, a person will strive for meaningful relations with others. If the opportunity for association with other people is reduced, men often take vigorous action against the obstacles to social intercourse. In the organization, workers form informal group environment. Such environment develops where the work is routine, tedious or over-simplified. This situation is made worse when workers are closely supervised and controlled, but have no clear channel of communication with management. In this type of environment, workers depend on informal groups for support of unfulfilled social needs such as affiliation.

4. Esteem Needs. The esteem needs are concerned with self-respect,: self-confidence, a feeling of personal worth, feeling of being unique and recognition. Satisfaction of these needs produces feelings of self-confidence, prestige, power and

control. The satisfaction of esteem needs is not always obtained through mature or adaptive behaviour. It is sometimes generated by disruptive and irresponsible actions. Some of the social problems have their roots in the frustration of the esteem needs. 5. Self-actualisation Needs. Self-actualization is the need to maximize one', potential, whatever it may be. This is related with the development of intrinsic capabilities which lead people to seek situations that can utilise their potential. This includes competence which implies control over environmental factors, both physical and social, and achievement. A man with high intensity of achievement needs will be restless unless he can find fulfillment in doing what he is fit to do. As Maslow has put it, "this need might be phrased as the desire to become more and more What one is, to become everything that one is capable of becoming."

Maslow suggests that the various levels are interdependent and overlapping, each higher-level need emerging before the lower-level need has been completely satisfied. Since one need does not disappear when another emerges, all needs tend to be partially satisfied in each area. When the peak of a need is Passed, that need ceases to be the primary motivator. The next level need then begins to dominate. Even though a need is satisfied, it still influences behaviour because of interdependent and overlapping characteristics of needs. This relationship among different needs has been shown in Figure 23.6.

HERZBERGS MOTIVATION HYGIENE THEORY

Need priority, to a great extent, characterizes the types of behaviour. It will be either directed towards achieving certain desirable positive goals, or conversely, towards avoiding other undesirable, negative consequences. Thus, a question may arise as to what variables are· perceived to be desirable goals to achieve, and conversely, undesirable conditions to avoid. In this connection, a research study was conducted by Frederick Herzberg and associates of Case-Western Reserve University.9 This study consisted of an intensive analysis of the experience and feelings of 200 engineers and accountants in nine different companies in Pittsburg area, U.s.A. During the structured interview, they were asked to describe a few previous job experiences in which they felt 'exceptionally good' or 'exceptionally bad' about jobs. They were also asked to rate the degree to which their feelings were influenced-for better or worsec-by ead1 experience which they described.

On analysing the information from the interview, Herzberg concluded that there were two categories of needs essentially independent of each other affecting behaviour in different ways. His findings are that there are some job conditions which operate primarily to dissatisfy employees when the conditions are absent, however, their presence~ does not motivate them in a strong way. Another set of job conditions operates primarily to build strong motivation and high job satisfaction, but their absence rarely proves strongly dissatisfying. The first set of job conditions has been referred to as maintenance or hygiene factors and second set of job conditions as motivational factors. Hygiene Factors

According to Herzberg, there are ten maintenance or hygiene factors. These are company policy and administration, technical SUpervision, interper~onal relationship with supervisors, interpersonal relationship with peers, interpersonal relation_ ship with subordinates, salary, job security, personal1ife, Working conditions and status. These are nQt intrinsic parts of a job, but they are related to condition under which a job is performed. They produce no growth in a Worker's output; they only prevent losses in worker's perfotmance due to work restrictions. These maintenance factors are necessary to maintain at a reasonable level of satisfaction in employees. Any increase beyond this level will not provide any satisfaction to the employees; however, any cut below this level will dissatisfy them. As such, these are also called as dissatisfiers. Since any increase in these factors will not affect employee's level of satisfaction, these are of no use for motivating them.

Motivational factors

These factors are capable of having a positive effect on job satisfaction and often resulting in an increase in one's total output. Herzberg includes six factors that motivate employees. These are: achievement, recognition, advancement, work itself, possibility of growth, and responsibility. Most of these factors are related with job contents. An increase in these factors will satisfy the employees; however, any decrease will not affect their level of satisfaction. Since, these increase level of satisfaction in the employees, these can be used in motivating them for higher output.

Herzberg maintains that potency of various factors is not entirely a function of the factors themselves. It is also influenced by the personality characteristics of the individuals. From this point of view, individuals may be classified into two groups-motivation seekers and maintenance seekers. The motivation seekers generally are individuals who are primarily motivated by the 'satisfiers' such as advancement, achievement and other factors associated with work itself. On the on the other hand the maintenance seekers tend to be more concerned with factors surrounding the job such as supervision, working conditions, pay etc.