ms unit 1 ppt.pdf

MODULE- 1
UNIT- 1: INTRODUCTION TO MANAGEMENT
Concepts of Management and organization- nature, importance and
Functions of Management, Systems approach to Management - Taylor’s
Scientific Management Theory, Fayol’s Principles of Management, Mayo’s
Hawthorne Experiments, Maslow’s Theory of Human Needs, Douglas
McGregor’s Theory X and Theory Y, Herzberg’s Two-Factor Theory of Motivation,
Leadership Styles, Social responsibilities of Management.

MANAGEMENT
“The art of getting things done through people”
“Management is the process of planning, organizing,
leading and controlling the efforts of organization
members and of other organizational resources to
achieve slated organizational goals”
 Definitions:
1) According to Taylor:- “Management is the art of
knowing what you want to do and then seeing that it is
done in the best and cheapest way.”
2) According to Lawrence:- “Management is the
accomplishment of results through the efforts of other
people.”
3) According to Henry Fayol:- “To manage is to forecast
and to plan, to organize, to co-ordinate and to control.”

Nature of Management
 Continuous Process
 Universal in Nature
 Multidisciplinary
 Management is a group activity
 Management is goal oriented
 Dynamic
 System of authority
 Management is an art
 Management is Science

IMPORTANCE OF MANAGEMENT
 Management meets the challenge of change: In the modern business
world, there are frequent changes. The changes place the business in a
dangerous position. Only an efficient management can save the business
from the dangers brought in by the challenges.
 Accomplishment of group goals: The achievement of objectives of a
business depends upon three factors. The proper planning of available
resources, adjusting possibility of business unit with existing business
environment and the quality of decision taken and control made by the
business unit are the factors responsible for achieving objectives.
 Effective utilisation of business: There are eight ‘M’s in the business. These
are said to be man, money, materials, machines, methods, motivation,
markets and management. Management is the topmost of all other ‘M’s.
Management has control over other remaining ‘M’s.

 Effective functioning of business: Ability, experience, mutual
understanding, co-ordination, motivation and supervision are some of
the factors responsible for the effective functioning of business.
Management makes sure that the abilities of workers are properly used
and co-operation is obtained with the help of mutual understanding.
 Management directs the organisation: The human mind directs and
controls the functioning of human body. Similarly, the management
directs and controls the functioning of an organisation.
 Integrates various interests: Each person has his own interests. These
interests are different in nature. Management takes steps to integrate
various interests to achieve the objectives of an organisation.

FUNCTIONS OF MANAGEMENT
 Planning : It includes forecasting, formation of
objectives, policies, programmes, producer and
budget. It is a function of determining the methods
or path of obtaining their objectives. It determines
in advance what should be done, why should be
done, when, where, how should be done. This is
done not only for organization as a whole but also
for every division, section and department.
Planning is thinking before doing.

 Organizing:- It includes departmentation, delegation of
authority, fixing of responsibility and establishment of
relationship. It is a function of providing everything useful
to the business organization. There are certain resources
which are mobilize i.e. man, machine, material, money,
but still there are certain limitations on these resources. A
manager has to design and develop a structure of various
relations. This structure, results from identification and
grouping work, delegation of authority and responsibility
and establishing relationship

 Staffing:- It includes man power planning, recruitment, selection,
placement and training. People are basically responsible for the progress
of the organization. Right man should be employed for right job. It also
involved training of personnel and proper remuneration.
 Directing:- It includes decision making, supervising, guidance etc. It
reflects providing dynamic leadership. When the manager performs
these functions, he issues orders and instructions to supervisors. It also
implies the creation of a favorable work, environment motivation,
managing managers, managing workers and managing work
environment. Communication:- Communication provides the vital link
in any organization. Every successful manager has to develop an
effective system of communication.

Communication means exchange of facts, ideas and information between two or
more person. It helps in building up high moral.
 Controlling:- It is a process of checking actual performance against standard
performance. If there is any difference or deviation then these differences
should be detected and necessary steps should be taken. It involves three
elements: 1. Establishing standard of performance. 2. Measuring actual
performance with establishment. 3. Finding out reasons for deviation
 Motivation:- In a well organization unforeseen problems are created. It
becomes necessary for the workers to have a leader, to whom they can consult
for the guidance. One must help the worker to solve their problems. The
manager is the leader for them. So he should accept the problems, should
appreciate the workers for the work done by them. He has to act as a well
motivation source for he workers.

SCIENTIFIC MANAGEMENT by F.W.Taylor
Scientific management is a part of early management
approaches. The chief contributor of scientific management
is F. W. Taylor. He is known as Father of Scientific Management
(1856 to 1915) was born in USA. He did most of his schooling in
France & Germany. He couldn’t finish his graduation & join
Midvale Co. (Steel Work). He worked there for 6 years. In 1884
he raised to the position of Chief Engineers, as mean while he
obtained Masters degree in Physics, Mathematics &
Engineering. In 1898, he joined Bethlehem Steel Co. where he
did his experiment to increase the loading capacity of each
worker with regards to material handling equipment.

At first one worker was engaged in loading 12.5 tones of iron.
But with the help of time & motion study he proved that one
man can load 47.48 tones because of the change in the size of
spade & systematic arrangement of instruments. With the help
of proper planning organization can earn more profit. Initially
the workers in that company are 500 to 600 because of this the
strength of workers reduce to 140 and profit increased by
78,000 dollars.
Definition:-Scientific management is concern with exactly
knowing what you want men to do & then see that they are
doing in best & cheapest way.

Separation of Planning & Doing:- Before Taylor’s scientific
management a worker used to plan about his work &
instruments necessary for that. Supervisors’ job was to see how
the workers were performing. This creates a lot of problems. So
Taylor has separated planning & doing authority.
Functional Foremanship:- Separation of planning from doing
resulted into development of supervision system. In this system
8 persons were engaged, out of that 4 persons were engaged
in planning department. They are time & cost clerk, routine
clerk, instruction card clerk & disciplinarian. In production
process 4 personnel were engaged, they are speed boss,
repair boss, supervisor & gang boss.

 Job Analysis:- It is related with finding out best way of doing. It means
that least movements in doing job. It will lead to complete production in
less time & lesser cost. It includes:-
A) Time Study:- It means determining time required to complete a job in
a particular time. The movement which takes minimum time is the best one.
B) Motion study:- It means study of movement while performing a job
i.e. elimination of wasteful movement in performing a job, only necessary
movements are engaged.
C) Fatigue Study:- It shows the amount & frequency of rest required,
while completing the work. After certain period of time workers feel
fatigue & can’t work with full capacity. Therefore they require rest in
between. When rest is allowed they start working with full capacity.

 Standardization:- As far as possible standardization should be
maintained in respect of instruments & tools, period of work, amount of
work, working conditions, cost of production etc. these all things are fixed
in advance on the basis of job analysis Scientific Selection & Training of
Workers:- Taylor has been suggested that worker should be selected on
scientific basis taking into account their education, work experience,
attitude & physical strength.

 Financial Incentives:- Financial incentives help to motivate workers
in maximum efforts. Higher wages lead to increase in efforts. He
applied differential piece rate system. According to him workers have
to complete the work within specified time and then only he will get
wages at higher rate per piece & one does not complete a job gets a
lower rate. Wages should be based on individual performance & not
on the position occupied.
 Economy:- Techniques of cost estimated & control should be
adopted. Waste should be controlled properly. Profit will be achieved
with elimination of wastage. He explained how resources are wasted.

14 principles of Management by Henry Fayol
 DIVISION OF WORK: Work should be divided among
individuals and groups to ensure that effort and attention are
focused on special portions of the task. Fayol presented work
specialization as the best way to use the human resources of
the organization.
 AUTHORITY: The concepts of Authority and responsibility are
closely related. Authority was defined by Fayol as the right to
give orders and the power to exact obedience. Responsibility
involves being accountable, and is therefore naturally
associated with authority. Whoever assumes authority also
assumes responsibility.

 DISCIPLINE: A successful organization requires the common
effort of workers. Penalties should be applied judiciously to
encourage this common effort.
 UNITY OF COMMAND: Workers should receive orders from
only one manager.
UNITY OF DIRECTION: The entire organization should be
moving towards a common objective in a common
direction.
SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL
INTERESTS: The interests of one person should not take priority
over the interests of the organization as a whole
REMUNERATION: Many variables, such as cost of living, supply
of qualified personnel, general business conditions, and
success of the business, should be considered in determining
a worker’s rate of pay.

 CENTRALIZATION: Fayol defined centralization as lowering the
importance of the subordinate role. Decentralization is increasing the
importance. The degree to which centralization or decentralization
should be adopted depends on the specific organization in which the
manager is working.
 SCALAR CHAIN: Managers in hierarchies are part of a chain like
authority scale. Each manager, from the first line supervisor to the
president, possesses certain amounts of authority. The President
possesses the most authority; the first line supervisor the least. Lower
level managers should always keep upper level managers informed of
their work activities. The existence of a scalar chain and adherence to it
are necessary if the organization is to be successful.

 ORDER: For the sake of efficiency and coordination, all materials and
people related to a specific kind of work should be treated as equally as
possible.
 EQUITY: All employees should be treated as equally as possible.
 STABILITY OF TENURE OF PERSONNEL: Retaining productive
employees should always be a high priority of management. Recruitment
and Selection Costs, as well as increased product-reject rates are usually
associated with hiring new workers.
 INITIATIVE: Management should take steps to encourage worker
initiative, which is defined as new or additional work activity undertaken
through self direction.
 ESPIRIT DE CORPS: Management should encourage harmony and
general good feelings among employees.

(HAWTHORNE EXPERIMENTS) by Elten Mayo
Elten Mayo can be called as the Founder of Human relations school. Mayo
conducted experiments at the Department of Industrial research of Harward.
The human relations movement was evolved during 1920’s in the U.S.A. Elten
Mayo (1880-1949) laid the foundations for the human relations approach.
Hawthorne experiments was conducted from 1924 to 1932 at a plant of
Western Electric Company, Chicago was manufacturing Telephone System
Bell. It employed 30,000 employees at the time of experiment.
The Hawthorne Experiment brought out that the productivity of the employees
is not the function of only physical conditions of work and money wages paid
to them. Productivity of employees depends heavily upon the satisfaction of
the employees in their work situation. Mayo’s idea was that logical factors
were far less important than emotional factors in determining productivity
efficiency.

The experiment was conducted in 4 phases.
I] Illumination Experiment :- (Physical conducting lighting effect) It was undertaken
to find out how change in the level of light & physical factor affects production. Higher
illumination will help in increasing the production; decrease in illumination will lead to
decrease in production.
II] Relay Assembly Test Room:- Under this study, two small groups of six female
telephone relay assemblers were put in separate rooms under close observation and
control. Frequent changes were made in working conditions such as working hours, rest
periods, hot lunch etc. Over the two years period, it was concluded that social or human
relationship among workers exercised greater influence on productivity of workers than
working conditions. This special attention and treatment given to workers developed a
sense of group pride and belongingness which motivated them to increase their
performance.

III] Mass Interview Program:- During the course of experiment about 20,000 interviews
were conducted from 1928 to 1930. For determination of employee’s attitude towards
company such as supervision, insurance plan, promotion, wages etc. & yes & no type of
questions were asked. During the course of interview it was discovered that workers
behaviour was influenced by group behavior. The programme indicated that productivity can
be increased if people allowed talking freely.
IV] Bank wiring observation room:- This experiment was carried from 1931 to 1932 with
a view to analysis functioning of small group & its impact on individual behavior. The
experiment was conducted to study a group of workers under conditions which were as close
as possible to normal. This group comprised of 14 workers. After the experiment, the
production records of this group were compared with their earlier production records. It was
observed that the group evolved its own production norms for each individual worker, which
was made lower than those set by the management. Because of this, workers would produce
only that much, thereby defeating the incentive system. Those workers who tried to produce
more than the group norms were isolated, harassed or punished by the group.

The main conclusions of Hawthorne Experiments are as follows :
1) Social factor in output:- Worker is influenced by social factor & the behavior within the group. Man
is a social animal. Only monetary incentives are not sufficient to increase the production but non-
monetary incentives will also help to increase the production. Means, behavior within the group
will definitely increase the production. This acts as a motivating factor.
2) Group Influence:- Worker forms a group in the organization means, they develop informal
relationship. They try to change their behavior & manager is considered as a part & parcel for that
group & not as a manager.
3) Leadership:- Leadership is important for directing group behavior. But the formal relationship is not
accepted by the workers. Informal relationship which is express in relay assembly test room & bank
wiring observation room is lead to increase the efficiency of the workers.
4) Supervision:- Supervision is important for determining efficiency of output but friendly supervision
helps to increase the productivity of the workers in the organization.
5) Communication:- In every organization communication is very important. Workers participation in
the process of decision making helps in increasing the productivity. Workers must communicate
freely with managers to explain their problem. Better understanding between manager & workers
develops positive attitude.

A system is a set of interdependent parts which form a unit as a whole that performs
some function. An organization is also a system composed of four independent parts
namely, task, structure, people and technology
The Systems Approach to management Theory,
commonly viewed as the foundation of
organizational development, views an
organization is made up of closed systems and
open systems.
The systems approach implies that decisions
and actions in one organizational area will
affect other areas. For example, if the
purchasing department does not acquire the
right quantity and quality of inputs, the
production department won’t be able to do its
job.

Inputs - Raw Materials, Human
Resources, Capital, Information,
Technology
A Transformational Process -
Employee Work Activities, Management
Activities, Operations Methods
Outputs - Products or Services,
Financial Results, Information, Human
Results
Feedback - Results from outputs
influence inputs.
The Environment - These components
make up internal and external factors
that affect the system.
The system approach of the organization is made up five components:

The following are the chief characteristics of the System Approach to
Management:
 Sub-Systems - Each organization is a system made up of a combination
of many sub-systems. These sub-systems are inter-related.
 Holism - Each sub-system works together to make up a single whole
system. Decisions made in any subsystem affect the entire system.
 Synergy - The collective output of the whole system is greater than the
sum of output of its sub-systems.
 Closed and Open Systems - The whole organization is an open system
made up of a combination of open and closed sub-systems.
 System Boundary - The organization is separate from the external
environment made up of other systems.

Maslow’s Need Hierarchy Theory
Every person has a variety of
needs, some of these needs are
satisfied and others are unsatisfied.
An unsatisfied need is the starting
point in the motivation process.
When a person has an unsatisfied
need, he attempts to identify
something that will satisfy the
need. This is called as goal. Once
a goal has been identified, he
takes action to reach that goal
and thereby satisfy the need.

1. Physiological needs: These are the basic needs for sustaining human life
itself, such as food, water, shelter and sleep. Maslow took the position that
until these needs are satisfied to the reasonable degree necessary to
maintain life, other needs will not motivate people.
2. Security or safety needs: People want to be free of physical danger and
of the fear of losing job, property or shelter.
3. Social needs: Since people are social being, they need to belong, to be
accepted by others.
4. Esteem needs: Once people begin to satisfy their need to belonging, they
tend to want to be held in esteem both by themselves and by others. This
kind of need produces such satisfaction as power, prestige and status.
5. Self-actualization needs: It is desire to become what one is capable of
becoming-to maximize one’s potential and to accomplish something.

Theory X and Theory Y
Theory – X
 Workers dislike to work by themselves
 Workers are not ready to take
responsibility
 Workers prefer to be directed
 Workers are unambitious
 Workers by nature resist change and want
security
 Workers lack of creativity, fail to solve
organizational problems
 Focuses on lower needs
 Strict control is necessary
 Authority is not delegated
 Autocratic leadership is followed
Theory - Y
 Workers feel that work is as natural as play
 Workers are ready to accept responsibility
 Workers are directed by themselves
 Workers are ambitious
 Workers are ready to cope up with changes
 Workers have high degree of creativity and solve
organizational problems
 Focuses on higher level needs
 Workers exercise self control and self direction to
achieve organizational objectives
 Authority is delegated
 Democratic leadership is followed

Hertzberg’s Two Factors Theory
Fredrick Hertzberg and his associates have proposed a two
factors theory of motivation. In one group of needs are such
things as company policy and administration, supervision, working
conditions, interpersonal relations, salary, job security and
personal life. These are called as dissatisfies and not motivators. If
they exist in a work environment, they yield no dissatisfaction.
Their existence does not motivate but their absence result
dissatisfaction. Hertzberg called these factors as hygiene or
maintenance factors. The second group he listed certain satisfiers
and therefore motivators, which are related to job content. They
include achievement, recognition, challenging work,
advancement and growth in the job.

The first group of factors (the dissatisfies) will not motivate in the
organization, yet they must be present otherwise dissatisfaction will
arise. The second group or the job content factors are real motivators
because they have the potential of yielding a sense of satisfaction. It
means managers must give considerable attention to upgrading job
content.
Hygiene factors Motivators
Status Challenging work
Interpersonal relations Achievement
Quality of supervision Responsibility
Company policy and administration Growth in the job.
Working conditions Advancement
Job security Recognition
Salary

Difference between leaders and managers
Leaders
• Leaders do right things
• Leaders focus on what can be
accomplished
• Innovation
• Commitment
• Outcome oriented
• Energizes system
• Transformational
• Create change
• Vision, inspiration, &
encouragement
Managers
• Managers do things right
• Managers do how things
can be done
• Conformity
• Control
• Rules oriented
• Ensure stability of the
system
• Transactional
• Manage change
• Strategies, procedure,
objectives

Types of Leadership Style
1.Autocratic
2.Democratic
3.Laissez-Faire
4.Paternalistic

Autocratic:
• Leader makes decisions without reference to
anyone else
• High degree of dependency on the leader
• Can create de-motivation and alienation
of staff
• May be valuable in some types of business
where decisions need to be made quickly and
decisively

Democratic:
Encourages decision-making from different perspectives –
leadership may be emphasized throughout the organization
• May help motivation and involvement
• Workers feel ownership of the firm and its ideas
• Improves the sharing of ideas and experiences within the
business
• Can delay decision making

Laissez-Faire:
• ‘Let it be’ – the leadership responsibilities are shared by all
• Can be very useful in businesses where creative ideas are
important
• Can be highly motivational, as people have control over
their working life
• Can make coordination and decision making time-
consuming and lacking in overall direction
• Relies on good team work
• Relies on good interpersonal relations

Paternalistic:
• Leader acts as a ‘father figure’
• Paternalistic leader makes decision but
may consult
• Believes in the need to support staff

Corporate Social Responsibility
Corporate Social Responsibility (CSR) is a concept that suggests that
it is the responsibility of the corporations operating within society to
contribute towards economic, social and environmental
development that creates positive impact on society at large.
Although there is no fixed definition, however the concept revolves
around that fact the corporations needs to focus beyond earning
just profits. The term became popular in the 1960s and now is
formidable part of business operations.
CSR is the way companies manage their businesses to produce an
overall positive impact on society through economic, environmental
and social actions. Corporate social responsibility (CSR), also called
corporate conscience, corporate citizenship, social performance, or
sustainable responsible business/ businesses. Business depends for its
survival on long term prosperity of the society.

According to Michel Hopkins “Corporate Social Responsibility is concerned
with treating the stakeholders of a company or institution ethically or in a
responsible manner. ‘Ethically or in a responsible manner’ refers to treating key
stakeholders in a manner deemed acceptable according to international norms.”
1. Care for all stakeholder: It is responsibility of the corporate to take care the
interest of all stakeholders including Customers, shareholders, creditors,
supplier, employees, project affecting persons and of course the society where
it operates.
2. Ethical Functioning: Ethics are the values, behavior, nature, conduct of the
person or persons in any organization or society. The best Ethical practices are
also awarded. They should not engage in any abusive, unfair, anti-competitive or
corrupt language.

3. Respect for Worker’s Right and Welfare: The companies should
provide the workplace environment that is safe, hygienic and humane to
work. They should be taken care of the health issues arising out of the
work of the organization. It should conduct the training and development
program within the organization for the people of the organization.
4. Respect for Environment: The companies are required to utilize the
Planet i.e., Natural Capital in a well manner so that it cannot be wasted,
excess utilized which is also required for the other states or countries and
also requires to be preserve for the future generation.

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