Chapter 1 Ac: 400.

¢VIS&SCIENCE
.KIE ABI
COLLEGE FOR WOMEN,
GUDIYATTAM.

Management - Nature and Scope

establishment, a
The work donein any place - be it a household, a business
Legislative Assembly or the Parliament, requires proper planning, organisation,
direction, co-ordination and control. Planning helps to do the work in a systematic
manner. Organising helps to mobilise the necessary resources and
fix
responsibilities on individuals. Direction helps to supervise and motivate people
at work. Co-ordination establishes link between the various activities performed.
Control helps us to knowwhether the plan has been successfully implemented
and the objective laid down in the plan has been fully achieved.
Meaning of Management
Management is basically çoncerned with the performance of planning,
organising,directing, co-ordinating and controlling, which, in fact, are its main
functions. Management is also regarded as the art of getting things done through
others. It isnot possible for any individual to do all the work himself. The work is
always shared with others. In a household, for example, the head of the house -
the father earns for the family maintenance. The lady of the house manages the
kitchen and so on. Similarly, in a bank there are different individuals to look after
cash, savings bank account, fixed deposit, current account, recurring deposit
account and so on. The overall control lies with the Bank Manager. Thus, it
becomes clear that the work is assigned to many in any work place and
responsibilities are fixed on them. The person assigning the work, i.e., the manage,
knows howto get things done through others, i.e., subordinates. A manager
who is unable tomake his subordinates work cannot be a successful manager.
Definitions of Management
Management is the art of getting things done through people - Mary Parker
Follet.
To manage is to forecast and plan, to organise, to command, to co-ordinate,
and to control Henry Fayol.
Management is what a manager does -Louis Allen.
Managemnent is the process of geting things done through the agency of a
Community. The functions of management are the handling of a community with
a view to fulfilling the purposes for which it exists - Sir Charles Reynold.
 Principles of Management
1.2
the process of
decision-making and control over the 1.3
Management is simply Management - Nature and Scope
the expressed purpose of attaining predetermined independent, it has to work in proper co-ordination with the other departments.
actions of human being for achieved. Finally, the
goals -Stanley Vance. Only then, the overall objective of the business can be
Management is the art of knowing exactly what you want your men to do and success of the plan must be verified. Thus, it becomes clear that without applying
the cheapest way - F.W. Tawlo mind and intelligence, it isnot possible to practise management.
then seeing that they do it in the best and consisting of various
Management is a process of releasing and directung numan energies towarde 4. It is a process - Management is essentially a process
stages/functions. Planning is the starting point of management and control is its
attaining definite goal - Wilson. organising, directing and co
last stage. In between there are other functions like
Management is the process of optimising human, material and financial ordinating. Each of these functions will have to be done in the sequential order.
contributions for the achievement of organisational goals - Pearce and Robinson Control, for example can be done only at the end. Organising cannot precede
Management is the art of directing and inspiring people - Mooney and [Link].
Art-The practice of science needs
Management is the creation and maintenance of an internal environment in 5. Management is both a Science and an
formulae. On the otherhand. the practice
knowledge of the theory as well as the
an enterprise where individuals, working in groups, can perform efficiently and social science. It focuses attention on the
effectively towards the attainment of group goals. It is the art of getting the work of art requires skill. Management is a
behaviour of individuals and groups. It does
not believe in the methodology
done through and with people in formally organised groups - Koontz and may not help. In such a situation, the
O'Donnel. alone. Sometimes, theoretical knowledge For example, if the workers in a
come to his rescue.
skillof the manager will
Nature of Management to go on strike if their demand is not
factory demand more pay and threaten
An analysis of the nature of management will bring out the following salient conceded, the skill of the factory manager willhelp to avert the strike more than
manager,
features: becomes clear that to be a successful
his theoretical knowledge. Thus, it plus skill.
1. It is a Universal Activity theoretical background
Management is relevant in every sphere of one needs to have a strong
activity. It has relevance not only in business but also in household work, in in the previous point, management
6. It is a social process As mentioned
groups. In a work place individuals
army, in governmental activities and so on. The work can be done in a more deals with the behaviour of individuals and
systematic manner with the application of the techniques of management. The individual is bound tobe different while he
work as a team:The behaviour of an strike
material and human resources can be effectively handled and the goal individual worker may be forced to join a
can be is part ofa group. For example, an which he is a member, has taken the decision to
attained with maximum efficiency. For example, a student who has to programme because the union, of
hisboard exam can either study at random or prepare in a prepare for individual, is thus, influenced by the group
to
systematic manner. In go on strike. The behaviour of the group like the trade union or an
the latter case, the level of performance is bound to be much which he belongs. Such a group may be
a formal
in the former case. more superior to that other personal relationships. A marketer.
informal group based on friendship and
consumers.
2. It is goal oriented Management similarly, will study the behaviour of the
specific objectives. For example, abusinessfocuses attention on the attainment ol approach-The goal of an individual
employee and
7. It adopts an integratedsynchronise. In practice,it may not. A worker. for
This can be achieved in an effective may aim for a particular level of sales.
and efficient manner by adopting that of his organisation must realise that
techniques of management. By making a proper th during working hours and may not
forecast of the sales, by plannns example, may be wasting his time to his organisation.
production, by fixing targets for the salesmen and such an attitude on his part will
prove to be detrimental
may give certain
the activities, the targeted by properly co-ordinating regularly coming late for work and
level of sales can be achieved. Similarly, an employee may be will reconcile the individual goals
3. It is an intellectual Management practice
activity - The practice of management requires unacceptable reasons.
application of mind and intelligence. with those of his organisation. A stage
Management does not Management is a continuous process.
approach to work. Every
necessary resources havework needs to be properlyplannedaccept the hit or miSs
and executed. 1n 8, It isan on -going activity say that management is irelevant. Planning,
to be acquired. Work has to will not be reached where one can Management will exist as long as there are
individuals and responsibilities have to be be assigned to die organising etc., have unlimited
use.
activities is essential. For example, fixed on them. Properrco-ordination of human activities.
and marketing are the important in a manufacturing unit, production, finance
established to look after these activities performed. Separate departments are
activities. Although, each department is
 Principles of Management 15
|4 Management - Nature and Scope
inVIsible. It cannot be seen. But it can h
9, It is intangible -Managcment is comparison is made The differences hetween Administration and Management
may be tabulated as
tolk The ssenutheance of management will hccome clear if a shown below:
woTking at random and the performance ot
between the performance of a person manner. Administration Management
working in a more systematic
the same indiv ual
Medical, Law and Engineerine Allpolicy decisons are maie hy It Is concerned with the mplementation
10. Management is a Profession - Like profession. A peSon who h of the poicies. Certan outine decisons
Maragement has also come to he recognised
as a the administration

of Business Administration) from one of the Prermi may be made by the managers on less
obtatned his MBA (Master
Indian Institute of Managemeni
Institutes of Management in India like the
important matters

Ahmedahad, Bangalore. Kolkata and so on will be recognised as aManagement Administrators are the owners Managers are the paid employees of the
can prOVIde consultancy services to bUSinessmen on such of the concern.
Concern
Profess1onal He
area of Managers actually work for the
areas as Market1ng. Personnel or Finance depending upon his 3 Administration is basically
special1sat1on interested in results, i.e.. remuneration they get. They direct their

11. It is a Factor of Production -Management is also considered as afactot

efforts towards the attainment of the
profitability, sales, future
fact
of production just ike land. labour, capital and enterprise. Management, in prospects and so on. goal set by the adunistrat1on.
combine and co The managers are responsibie to the
gets an even morc prom1nent placc because it has to properly 4. Administrators do not take part
ord1nate all other available resources. administrators on the datly work
in the daily activities of the
Distinction between Administration and Management done in the concern.
Concem.

Although the terms Adm1n1stration' and 'Management' may appear to be The decisions made by the
5 The managers are empowered to take
decisions only on routine matters.
similar. they are actually d1fterent. Inour daily conversationwe use the two terms administrators are influenced

Interchangeably Adm1n1stration is concerned with laying down suitable policies They are usually guided by opinons,
by the availability of capita,
for the whole concern whercas management will simply execute these. Government regulations and values and beliets in making decisions.
Adm1n1strators are the owners of the business. Managers, on the other hand, are such other factors. They also act based on precedents,
the salaried employces of the concern. The basic difference between i.e.. past happenings.
adm1n1stratson and managenient is highlighted by means of a popular diagram 6. Management is not a static body
Administration is almost a
whuch is given beiow Managers may resign, retire or nay
permanent body. No major
even be removed from service.
change, therefore, takes place
in it.
Adm1nistration It is a lower-level function.
7. It is a top-level function. 7.

Manager
Distinction between an Entrepreneur and a
who makes efforts to establish a business
Managenent An entrepreneur is a person the success
enterprise and undertakes the
financial and legal responsibility for
on the other hand, is employed by the
Figure I.! - Basic Distinction between Administration and or failure of the same. A manager, of the objcctives of the tatter's business
Management entrepreneur to work for the
attainmnent
be tabulated
Administration Top level Function; distinction between an entrepreneur and a manager may
Munagement Lower Level Function venture. The
as follows:
 Principles of )
L.8
an experiment
of suchPsychology.
will be the
aSo
Manageme
same. Management is a
Management - Nature and Scope
1.9
Science
and like Sociology.
the outcome Economics and so on. Management scientig
needs men,
formulated
several principles that 2. Mobilisation of the necessary resources - Every business
theories and resources are required
have developed
many
functions. There are theories
on
guis
machines, materials and money. The extent to which these
are taken care of by
managers in
performing their
authority and so on. Motivation.
Motivatio and the proportion in which these are to be combined of
of management. Grouping
principles goverming
delegation
uelegati organising which is yet another important function of subordinates and
concepts.
similar activities, delegation of authority by a superior to his
essentially management
etc.. are the manager.
But unlike Physics or Chemistry where cause-effect relationship is certa
creation of accountability are some of the other tasks perforned by
and definite, in the case of Social Sciences no such definite relationship exis, for division of work
3. Division of work-Management recognises the need parts and
said with definiteness that financial rewards will motiy in any work place. The total workto be done is divided into different
For example. it cannot be individual. The advantage of division of
all the employees. The outcome of every experiment in management may aly each part is entrusted to a particular he does and it also
becomes a specialist in what
and from country to country. What is true in the case labour is that each individual
vary from place to place
workers in other countries may not be true in the case of Indian workers. Fo facilitates quick performance of the work.
example, workers in the westem countries work even beyond the working hoñ 4. Selection of the right man for the right job - Management gives utmost
right man for the right job. If an individual is
to show their protest whenever they have grievances. But the workers in In importance to the selection of the
show interest in work. On the other hand, if he is
only strike work to show their protest. SocialSciences focus on the behavine Over-qualified, he may not
individuals which is acomplex affair. On the other hand, in Physics or Chem:under-qualified, he cannot cope with the nature of work. Therefore, it becomes
the focus is on inanimate objects the behaviour of which can be accurate necessary to get the right person to do a particular job. The staffing function of
recruitment and selection of
predicted. management takes care of the issues concerning the

Art involves the use of personal skillof every individual. In fact, perfommane employees. have been selected for the
in art willvary from individual to individual in view of differences inskill. Fr 5. Manpower development -The candidates, who
the
Various jobs, may not have practical exposure to work. The skill of some of
eAanpie, 1T tWO persons are asked to draw the same picture the perfomn needs to be updated in tune
dns employees, already working in the organisation,
both will not look identical. Same is true with resnect to musi and technology. This necessitates training
other art forms. Performance in art is mainly influenced by such factors as skil with the advancement in science
technical knowledge, creativity and so on. To be a successful manager a which is again a management activity.
individual has to apply his knowledge, skill and creative ability. Knowledge d 6. Inducement of workers-Another important role played by management
the theory and the principles of management alone cannot help a manager is in the matter of motivating the employees of the organisation. Employees
ony nis dutes. For example, a manaoer whobac the clill Cannot be handled in the manner in which machines and materials are handled.
psychology of his workers may be able to get things done better than a manag Employees need to be constantly motivated. Motivation may be done by means
who knows only the theories and of monetary as well as non-monetary measures. Even a word of appreciation may
principles of
It is clear from the above discussion that management. moivate an employee to work harder.
an Art. management is both a Science nu 7. Stability of tenure-Management advocates stability of tenure for all in an
Importance of Management organisation and particularBy for the managerial personnel. If an employee is
Management enables a business to frequently shifted from one job to another or from one branch to another he will
It prepares the attain its goal in the most efficient manne. not be able to cope with such a change. This will also affect his efficiency.
Men, machines,employees to adopt a systematic
materials and money are, approach towards their work 8. Integration of business activities - In a business a number of activities
business. But, it is only no doubt, indispensable for every like purchase, production, marketing and sales take place. There are separate
resources effectively. management that makes it possible to utilise thest departments to look after these various [Link] what is important here is
The importance of other
1. Systematic management may be stated as folows: that the activities of every department influence the activities of the
Approach
functions of management, to work-Planning, important departments. For example, the production department will be able to produce
responsibilities provides for a systematicwhich is one of the
on individuals work. It fixes only if thê naterials needed by it are provided by the purchase department. The
and last minute rush. and approach to départment will be able to buy only if the finance department provides
departments. Planning helps to avoid delay purchase
the necessary funds. Thus, it is necessary that the various
depart1nents work in
proper co-ordination. Management takes care of this aspect also.
 Principles of Management
1.10 Management - Nature and Scope 1.11
every business to find out
9. Performance of control- It is necessary for of the plan period, Middle Management -It consists of the Heads of allthe Departments like the
the end
whether what has been planned has been achieved at Production Manager, the Finance Manager. the Marketing Manager and so on. It
realised, it becomes necessary to find out the
If the goal has not been fully also includes the deputy managers in all the departments. The functions of middie
performance. In other words, the
causes that have contributed to the shortfall in management are as follows:
Corrective action needs to be
deviations from the target need to be measured.
in future. Performance of control is also an () Formulation of suitable policies at the departmental level.
taken so that no such problem arises
important task of the manager. ) Production, Finance, Marketing and Sales planning and control.
10. Fulfilment of social obligations - Every business is part and parcelof the (üi) Periodical review of performance.
therefore, it
society. The business derives all the benefits from the society and (iv) Interaction with the subordinate staff.
owes certain duties towards the various sections of the society, namely, the
competitors and
Supervisory or Lower Management - It consists of such individuals as the
shareholders, the creditors, the consumers, the employees, the foremen, office manager, supervisors, etc. The supervisory management is
the Government. Management also focuses attention on the social obligations
concerned with the following functions:
of every business. () To plan the day-to-day work.
Levels of Management
() Toassign work to all the employees and undertake supervision.
Three levels of management have been recognised by management experts. (iü) To monitor the performance of the employees.
These are:
1. Top Management
(iv) To send periodical reports to the middle level managers.
2. Middle Management and
FUNCTIONS OF MANAGEMENT
The various functions of management Planning. Organ/sing. Staffing.
3. Supervisory or Lower Management
Directing. Co-ordinating and Controlling have been discussed brietly hereunder:
PLANNING
The first and the foremost function of managemeht is planning. Planning is
deciding in advance what should be done in future. It heips to work in asystematic
Top Management Middle Management Supervisory Management manner. With proper planning of the activities of the enterprise, it ispossible to
Board of Directors Producion Manager Office Manager make an optimum use of the available resources. Planning focuses on the
Chairman Finance Manager Foremen
Managing Director, objectives of the business. Weekly and monthly targetsare set for all and this
Marketing Manager, etc. Supervisors, etc.
etc. avoids work pressure particularly towards the end of the plan period. Plan
provides the basis against which the actual performance can be measured.
Figure 1.2 - Levels of Management Planning eliminates the iendency to work at random. It determines the priorities
of the business and tells what should be done first, what next and so on. The
Top Management -It consists of the Board of basic nature of planning may be stated as follows:
Managing Director and so on. The functions of Directors, the Chairman, the
the top management are as
follows: () It is goal-oriented.
) To lay down the basic (iü) It is an intellectual activity.
objectives of the business.
(ii) To frame major policies for (im) It is the primary function of management.
the business.
(iü) To organise the business (iv) It is all pervasive, i.e..present at all levels.
into different departments for
attainment of the enterprise goals. the efficient (v) It is a continuous process.
(iv) To appoint departmental (vi) It is forward looking.
heads and review their
() To represent the
business outside, particularly performance.
problems with the Government, trade in discussing
association and so on. business
 s of Managemem
L12
planning
consists of
the following stages: 1.13
process of Management - Nature and Scope
The environment.

the organisation:
The following steps are involved in the. process of
Analysing
() of the necessary information.
performed for the accomplishment of
analysis
Collection and
() objectives. () Identification of the activities to be
Determination of the organisational goal.
(m) premisess or assumptions.
planning or divisions based on their nature.
(iv) Knowledge
of the
action (i) Grouping of activities into departments
alternative courses of the superiors.
(v) Knowledge of the (iüi) Assignment of duties to the subordinates by
alternative courses of
action totheir subordinates to enable
(vi) Evaluation of the (iv) Delegationof authority by the superiors
the latter to carry out the task.
(vii) Selecting aparticular course. subordinates answerable for the
plans. (v) Creation of accountability to make the
(vii) Preparation of derivative use of authority.
subordinate staff.
(x) Participation of the STAFFING
(x) Devising amechanism of continuous evaluation. The staffing function of management is concerned
with the performance of
Plans may be of two types - Single-use plans and Repeated-use the following activities:
Programmes and Budgets are examples of:fsingle-use plans. plans.
Objectives,
Procedures, Rules and Strategies are examples of repeated-use plans.
Policies, ) Recruitment and selection of employees
(i) Training
ORGANISING
(m) Wage and salary administration
After planning comes the organising function of management. (iv) Performance appraisal
the process of bringing together the necessary resources Organising is
of the objectives of the enterprise. Men, machines, for the accomplishment (v) Employee transfer, promotion, demotion and termination.
resources necessary for any organisation. Organisingmaterials and money are the kind of
Every organisation must employ the right number and the ight
is also concerned with the employees to do various jobs. If more employees are employed than the required
grouping of the activities of the enterprise into
marketing and so on. Each such group will be calledvarious types, e.g., production,
a department. Each department
number, the cost of operation will be more. Moreover, the potentials of the
will be headed by amanager. The employees cannot be fully utilised. On the other hand, if the number of employees
There willbe anumber of subordinatesmanager will be assisted by an assistant employed is less than the required number, it is not possible to cope with the
in every department to manager.
will assign some work. The whom the volume of work. Therefore, it becomes necessary tohave the right number of
out the work assigned subordinates will be given certain authoritymanager employees at any given point of time.
work done by them. to them. They are answerable to their to cay
superiors on the Recruitment of employees may be done from internal as well as external sources.
The characteristics of Transfer from branches having surplus staff, promotion etc., are some of the
) Itis concerned organising may be stated as follows: internal sources of recruitment. Newspaper advertisements, employment
with the exchanges, campus interviewS, etc., are some of the external sources of recruitment.
(ü) It divides the accomplishment of the enterprise godl.
total work into Once the source of recruitment is finalised, the next step is to complete the
known as division of different parts for better performance. This is selection process by holding tests and interviews.
(Gü) It provides for labour.
The selected candidates need to be trained to enable them to perform their
(iv) Its
activities authority-responsibility
depend relationships. jobs effectively. There are on-the-job and off-the-job training methods.
(v) Delegation of authoritytotallyby aon asuitable system of communication. Determination of the correct remuneration for the employees and payment of
feature of organisation. superior to his financial incentives are also part and parcel of the staffing function. The
(vi) subordinate is another notable
performance of the employees must also be periodically appraised or evaluated
Answerability accountability
for the work or so a_ to know whether they are efficient and effecive.
done is also an on the part
of ai subordinate to his superior
important characteristic
of organisation.
 I'in ipleNof Managcnent Manageent Nature anlSeope
bavcd on hcir CxpeicC. Lcalerhip styleN HTe ofdifferent types as
ntated below:
clipible o pootion buanch t a . . .
Inpoycex becoe ortasler romonc AutoCratie
'ployce arc also liable ()
and erfomawe scIVicC COitions [Link] cpove
onfomonc plwcloaothe
itthcin
showing ncglibeue
(i) DemCatic
pclomane on are lound (o be (i) LaiNNCz aie
who havc ot shown good fom tlhe present ositio), Thc sCrvitns
loweposition
Imay bedcotcd (scnt oa activitiCN ArC potouwd (iv) F'umetional
tcminatcd. Alhesc
of incftieicnt cwploycesmay also be (v) Institutional, and
uder stalling in manapcmcnt. (vi) Patemalistic
DIRECTING
CO-ORDINATING;
The dirccting function isconcencd with
the following ctiviticN:
departments in an cnterprise
Although the activitics perforned by the various
(i) Undcrtaking sucrvisiom. are dirccted towards the attainmcntof the overall
urc diffecrent, allNUch activitics
(i) Issuing onders and instructions pcrtaining lo work. purchase
finance, the
busincss objective. The finance department provides produces goods and
(ii) Popcr comunication rclationship bctwcen the nmanagcmcnt and the department buys raw materials, the production department
sales to enable the business
cmployces. the markcting department undertakes marketing and
to achicve its goal. The activities of the various departments are inter-dependent.
(iv) Leadership-to guide cmployecs. able to produce only if the
For examnple, the production department will be
The manager has to supervise the work done by the enployees. Hc must materials at the right time. The
offer help whennecded. This willbe possible only if the manager has the right purchase department buys the nccessary raw department provides
purchase department will be able to buy only if the finance
mumber of employces/subordinates under him. If a manager/superior is asked to betwcen
supervise more subordinates than the optimum number, he will not be able to do the necessary funds. It, therefore, becomes necessary to establish link
the various activities performed by these different departments. This is done by
his work effectively. On the other hand, if fewer subordinates are placed under a
superior, his potentials cannot be fully utilised. It, therefore, bccomes necessary the co-ordinating function of management.
to deternine accuratcly the optimum number of subordinates a
manager can Co-ordination may be achieved by meansof any of the following ways:
control. This is what is known as 'Span of Control' or 'Spanof Management'. () Planning
The manager often has to give orders and instructions to his
(ii) Rules and proccdures
pertaining to their work. This will not be possible without proper subordinates
Communication may be oral as well as written. It may be formalcommunication.
and informal.
(ii) Sound organisation - proper use of hierarchy
Formal communication takes place when the (iv) Effcctive communication
adhered to while conveying information. Herc, organisational hierarchy is strictly
the superior - subordinates (v) By having Liaison officers
relationship is not ignored. Informalcommunication, on the other hand, (vi) By seting up a task force comprising representatives from the interacting
the organisational structure or
any individual.
hierarchy. The information may be receivedignores
from departments
Lcadership is yet another (vii) Creation of a separate co-ordination departnent.
the ability of a manager to integral part of the directing function. Leadership is CONTROLLING
induce
goal. A leader is supposcd to his subordinates to work towards the common
possess certain qualities as If planning is 'looking ahead', controlling is 'looking back'. Control enables
() Physical fitness mentioned below: a business enterprise to know whether the plan has been successfully implemented
(ii) Mental vigour and its goal has been achieved. The process of control involves the following
(iii) Sense of judgcment stages:
(iv) Ability to motivate () Establishment of standards
(v) Communication skill, etc. (ü) Measurement of actual performance
 CIpies or Management
1.16
between the
actual performance and the
(üi) Making a
comparison
standard Management - Nature and Scope 1.17
set
actions
and taking corrective
Finding out deviations
(iv) Astandard is nothing but abasis against which the actual performance may
be measured. Standards may be bothtangible as well as intangible. Quantity of Contrlig Mangemnt
output to be produced
are examples of
or sold, production cost, turnover in terms of money et.,
tangible standards. Consumer
intangible standards.
satisfaction, employee
attitude Fina cial
etc., are examples of
Once the standards are set, the next step is to find out the actual performance.
Feedback information has to be secured at regular intervals from the different
departments on the work done. A comparison between the standard and the
actual performance may indicate whether the target has been
reached ornot Co-rdinatg Areas
Mangemnt Functioal
there is any shortfall in performance, the causes for the same must be found us
This will help the manager to decide on the remedial
FUNCTIONAL AREAS OF MANAGEMENT
(SCOPE OF MANAGEMENT)
measures.
Marketing MBANUSGIE T and
Management practices are applied in the following major functional areas of
business:
) Production - Production Management
Directng8 Functios
(i)
(ü)
(iv)
Personnel - Personnel Management
Marketing - Marketing Management
Finance - Financial Management
The relevance of the functions of management, namely, planning, organis1ing,
Personel Mangemnt Mangemt
directing, co-ordinating and controlling for the various functional areas, namely,
production, personnel, marketing and finance may be explained by means of a Organis g 1.3
-

diagram:
Figure

Plan i g
Production Mangemnt
 Principles of Manageme
1.18 L19
Production Management Management - Nature and Scope
In the case of a business manufacturing goods, production is an importan important decisions in
function. Production management is concerned with the proper planning.
(a) Product Planning - Itis concerned with certain
respect of the following:
organising, directing, co-ordinating and controlling the production activities product or a number of
followg: ) Product mix - whether to manufacture one
business may be stated as
The production activities of a products
) Creation of the factory
building (ii) Product modification - to alter outdated products
and machinery (iüi) Product elimination - to drop unsuccessful products
(i) Acquisition of the necessary plant to handle the various
Purchase and storage of raw materials (iv) Product life cycle - the measures to be adopted
(iü) growth, maturity
production phases of its life cycle consisting of introduction,
(iv) Attaining the targeted level of and decline stages
for the product
(v) Quality control. (v) Branding - selection of the most appropriate name
wrapper for the product.
Personnel Management (vi) Packng - determining the type of container or
This is also referred to as "Human Resources Management'. Personnel product is yet another
(b) Pricing Determining the right price for the that influence the
Management is primarily concermed with the management of the human resources important task of the marketer. There are so
many factors
is an important
of abusiness organisation. The following activities will come within the purview pricing policy of a business. Cost of production and
distribution
also influence its
of the business
of personnel management: determinant of price. The pricing objectives
objectives of a business may be mentioned
() Manpower Planning pricing decisions. Some of the pricing
as follows:
Ö Recruitment and Selection of employees
) Target return on investment
(ü) Employee training
(iv) Job analysis and evaluation (i) Maximising market share
(im) Meeting competition
(v) Determination of the correct remuneration for the workers
(iv) Preventing competition and so on.
(vi) Performance appraisal or evaluation marketers, include,
The different types of pricing, which are followed by
(vii) Promotion, transfer, demotion and termination
among others, the following:
(vii) Encouraging workers' participation in management and so on. () Odd pricing
Marketing Management (iü) psychological pricing
Marketing is the total system of interacting business activities designed to (i) Prestige pricing
plan. price, promote and distribute want-satisfying products and services to
present and potential customers. Selling is only a part of the marketing function. (iv) Monopoly pricing
Seling is concerned with the transfer of title from the seller to the buyer. Marketing, (v) Skimming pricing- setting a very high initial price
on the other hand, is concerned with the performance of all those
activities that (vi) Penetration pricing - setting a very low initial price
enable the seller to transfer the title to the buyer. Marketing starts various types of discounts
The marketer must also have knowledge of the
production. The philosophy of marketing is 'consumer satisfaction'. before and allowances offered to the middlemen and the
consumers.

Marketing management is concerned with the their products through

(c) Physical distribution Most marketers distributeterm
organising, directing, co-ordinating and controllingperformance
the various
of planning
a network of middlemen. Physical distribution
is a wider which includes not
activities. The various marketing activities may be stated as marketing wholesalers, retailers and others
follows: only the channels of distribution comprising the
are vital in distribution.
but also storage and transportation which
take certain important decisions
(d) Promotion Finally, the marketer has to
would adopt to create demand for his
on the promotional measures that he
products. The various promotional tools are:
 121
N
Principles of ¡Manageme
Management - Nature and Scope his subordinates.
organisation include
contacts within the
L.20
has regular suppiiers ets.. are the
) Advertising Governnent officials,
so on.
fellow managers and frequent contacts.
(ü) Publicity whom the manager may have
outsiders with
supervise the Work of
his
(ii) Sales promotion Every manager has to necessary
and (ü) To supervise - the latter are doing their work and offer
Personal selling subordinates while undertaken to ensure
that the
(iv) also needs to be
(v) Public relations help. Supervision hours.
subordinates do not waste
their time during working
Financial Management under pressure most of
the time
business. Abusiness requires fize Managers may work case of
basic requirement of any (ü) To attain targets - This is particulariy true in the
Finance is the
fixed assetslike land andd
building, plant and machinery.
salaries and
.furnitur to achieve.
as they have targets managers who are the ine
managers.
capital to acquire
raw materials, pay wage production and sales by their
needs working capital to buy have to get things done
etc. It also routine expenses. delegate authority - Managers to the latter to
other (iv) To have to delegate authority
and to meet out all capital: subordinates. For this they managers must ensure
the sources offixed tasks assigned. The
The following are business enable them to perform the the duties by the
proprietor's own funds
- in the case of one-man is just sufficient to carry
out
) The that the authority delegated may be misuse of
company.
subordinates. If authority
exceeds responsibility there
partnership or a private subordinates
companjes authority is inadequate, the
of public and Government authority. On the other hand, if
(ü) Share capital - in the case out the task.
() Debenture capital may not be able tO carry hold meetings to
IDBI. the ICICLe Managers, often, may have to
(iv) Long-term loan from financial institutions like the (v) Tohold meetings - their subordinates. Such
meetings are also
as follows: putforth their views before subordinates on the
sources of working capital are information from the
The necessary to get feedback alsO may have
() Overdraft progress of their work. Managers
of different departments review
and to
secure proper co-ordination
(i) Cash credit to meet at regular intervals to
(i) Discounting of eligible bills progress.
leader, the manager has to set an
example to his
(iv) Trade credit from creditors, etc. (vi) To act as a leader -Asa honest and committed to his work.
subordinates. He must be sincere,
Financial management is concerned with the following important activities: and motivate the subordinates under
of the Only then, he will be able to guide
To find out the long-term and short-term financial needs
) him.
ensure that the
business. resources - The manager has to
(Vi) To ensure proper use of machines, materials and money are
) To identify and choose the right source of raising funds. organisational resources such as men,
(ü) To ensure proper utilisation of funds. optimally utilised.
(iv) To ensure safety of investments and also maximum returns on such there are conflicts between the employees
(viii) To resolve conflicts -Whenever expected to resolve all
investments.
Over certain organisational matters, the manager is
solution.
(v) To remain in the good books of the creditors, bankers and others by such conflicts and arrive at an amicable
maintaining the creditworthiness of the business. those in charge of sales, may
() To ensure the shareholders a reasonable return on their (x) To undertake trips - Managers, particularly and as a result they may not
holdings. have to undertake business trips frequently
same manner, the managers
Role of a manager be able to remain in hometown always. In the
hours. They may have to work
The role played by a manager in a business organisation may cannot work strictly according to working
be stated as view of a higher quantum of
follows: even beyond working hours sometimes in
) To have contacts - He has to estabish and work.
both within and maintain contacts with many
outside the business. The persons with
whom he
 Principles of Manageme 1.23
1.22 make certain routine decisjon Management - Nature and Scope
-Managers also have to motivated to perform better.
Motivation need
(1) To make decisions matters pertaining to the daily operations of th Workers need to be constantly Non-monetar me hods like
in connection with payment of wages, sanctioningB¢ not necessarily be in the form of monetary rewards.
wordcfappreciation
business. Purchase of raw
materials, uthority or even a
etc., are examples of such routine decisions. participation in decision-making, greater
leave to subordinate staff, motivate workers.
spokesman of h will certainly good in
- The manager also acts as a linates, the manager must be
(xi) Toact as aspokesman to the public whene To be able to get things done by subor
information
organisation and conveys certain understanding the human
behaviour.
with imaginative skillwill
necessary. that ma Imaginative skill - Only a manager who is blessed Age-old
manager is alsoexpected to handle
crisis Management is dynamic innature.
(xü) To handle crisis -The breakdown be able to conceive creative ideas. modern ideas. In the case of
organisation. Strike-call by the workers, practices need to be replaced by
arise in the conventional software as the
accident in the godown or in the workplace are examplest and example, most concerns these days use such
machinery, fire accounting, for system. Letter correspondence is
organisation at any time. In such the conventional accounting being advised through Internet
critical situations that may arise in any "Tally'in place of
and swiftly and find a remedy. Business clients are
situation the manager has to act wisely now considered outdated.
and Cell phones.
Skills expected of a manager the manager will enable him
to come out with innovative
The manager will le of
skill
Management is the art of getting things done
by others. The imaginative
ideas will help to bring out a
new product, to explore a
only if he possesses the followin [Link] innovative
able to get things done by his subordinates new market and so on.
skills: Review Questions
Technical knowledge and skillThe manager
must have technical skill fo SECTION A
have complete knowledge of the
the efficient performance of his work. He must
for example, must know the
technical aspects of work. Aproduction manager, 1. Define 'Management'.
the production process and the
type of raw materials to be used, the proportion,
'Administration'?
2. What is
A finance manager must have thorough
manner of handling the various machines. 3. Is management a
science or an art?
cost of capital, ratios, fund flow and
knowledge of working capital management, 4. What are the three levels of
management?
cash flow analysis and so on. management?
if he is technically 5. What are the functions of
The manager willbe able to guide his subordinates well only SECTION B
competent in his line of work.
of administration.
Knowledge of human relations - The manager must be capable 1. Distinguish
management from
profession?
human relations. Only then he will be able to motivate his be recognised as a
understanding 2. How can management
subordinates to work harder. Employees cannot be handled in the manner from a manager?
entrepreneur different
3. How is an organisation.
machines are handled. An employee is disturbed not only by the happenings in 4. Explain the role played
by a manager in a business
the work place but also by what happens in his personal life. The manager mus, 5. What are the functions of
the top management?
therefore, understand human psychology to be successful. He should not be SECTION C
harsh in his approach. If the work related problems of an employee are genuine,
the manager must help him to find a remedy. Counselling is recommended to 1. Explain the basic
characteristics of management.
enable the employees to get rid of their personal problems. importance of management in business.
2. Describe the
Inthe work place, the employees work as a group or team. The behaviour of various functions of
management.
an individual will be different when he is part of agroup. For example, an individual 3. Explain briefly the management? Write briefly about each
one.
are the functional areas of
worker may not strike work but if he is induced by the trade union, he may 4. What
participate in a strike programme organised to safeguard the interests of the
workers in general.
 2.2
Contributions of Experts to Management Thought
Chapter 2 management is also benefited as
aresult of increased output,
to output. As the workers and the management.
exists harmonious relationship between the
there and between
workers and the management
4. Co-operation between the workers work with
higher profits only if the
workers: Managementcan expect
Contributions of Experts to maximum efficiency. The workers
will be benefited only if
comes forward to reward them
the management
suitably. Scientific
recognises their efficiency and the workers
Management Thought managenent, therefore,
contemplates absolute co-operation
Co-operation bctween the workers
between
is also of paramount
and the management. inter-related and inter-dependent.
Many experts have made signilicant contributions to the growth o importance as the work done by them is maximum output
managenment over centurics. The contributions of some of the renown output: For the management
5. Maximum and notrestricted output enables
management thinkers have been givenin this Chapter. lower cost of production. Greater
would mean greater profits and management and the
remuneration. Thus, both thc
EW. Taylor (1856 - 1915) the workers to earn more under scientific management.
interested in maximising production
He is called the futher ef ScientificMunagement for his scientilic approach to workers are
solve management problems. He started his career as a machinist in a small Techniques of Scientific Management
techniques of ScientificManagement:
concern in the U.S and by his hard work, he could go up to the level of the chief The following are the important
engineer in the same concern within a short span of time. During his period of 1. Work Study
work, Taylor found that the workers were performing below their capacity, 2. Scientific task planning
Ignorance of the workers and the management on the best ways of doing the 3. Scientific selection, placement
and training of workers
work and the use of the trial and error or the rule of thumb method contributed to
wastage and inefficiency. Taylor conducted several experiments to replace the 4. Standardisation and simplification
5. Mental revolution
hitor miss approach by a scientific method.
According to Taylor, management is the art of knowing exactly what you Work Study
want men to do and seeing that they do it in the best and cheapest way'. His Under Scientific Management, the
Worksstudy aims at improving efficiency. working conditions is
ideas on scientific management were brought out as a book titled worker can do under standard
'Principles of amount of work an average determining
Scientific Management' inthe year 1911. objectively determined. This is referred
to as the 'fair-day's work'. In
Important aspects of Scientific Management studies are used:
the fair day's work, the following
The following are the important features of Taylor's () Time Study
1. Replacement of thumb rule method by a
Scientific Management:
(ii) Motion Study
scientific
management, the standard time required for doing any workone: In scientific
is determined. A (ii) Methods Study
worker willbe considered efficient only if
time. The working environment will be he does the work within the standard (iv) Fatigue Study 'standard
provided on scientific lines. The tools, the time study is to determine the
materials used, the methods used, etc., are all standardised. Thus, The objective of conducting the elements associated with
absolutely no scope for the hit-or-miss approach. job. For this, the various
there is time needed to perform every element is recorded.
taken to perform each such
2. Scientific selection, the job are identified and the time workers from one
Scientific management provides placement, training and development of know the movements of
for the selection of the right workers: Motion study is conducted to work. The idea is to
iob. Placement of workers
will man for the right another during working hours to perform their
the workers to perform be done based on their place to movements.
their duties with maximum capabilities. Training enables identify and eliminate
unnecessary and wasteful
3. Harmonious efficiency. appropriate method of doing
determining the most
Scientific managementrelationship between the workers and the Methods study aims at
enables efficient workers to management: any job.
earn more as payment is linked
 Principles of Managemes 24
2.3 physical and mental Management Thought
Contributions of Experts to
Fatigue study determines
the amount of
the task assigned. The idea
exhaustion theose workers not attaining
the standard output and
the performance of is te a lower rate applicable to those attaining or exceeting the
standard
caused to the workers by
when necessary so that the workers would not
fee the other ahigher rate applicable to Rs.2
hrgher rate is
provide for intervalbreaks
output. For example,if the lower
rate is Rs. 1.50 per unit and the
producing 8 unsts will
tired output is 10 units, a worker
per unit and the standard un1ts w1llget Rs 24 as
Scientific Task Planning receive Rs. 12 as remuneration
and another produCIng 12
and ensures their attainment. It ensures
It lays down production targets remuneration.

production, specialisation, optimum use

quality of output. Lower costs of Functional Foremanship
system of
the other objectives of scientific o factory work, Taylor suggesteda
resources, sales maximisation, etc., are For a better performance of the
involve th. of whotr
implementation of the production programme will system, there will be enght persons
planning. The functional foremanship. Under this in the factory and
planning department, four
following stages:
operations three willwork in the production
(i) Routing - concerned with the sequence of production one person to secure
proper co-ordination.
called
production planning depart1nent are
(1) Scheduling - prescribes deadlines for
each work The persons who will work in the
() Dispatching - concerned with issuing orders to carry
out the work by the following names: to be
determine the sequence of operations
(iv) Feedback - helps to check whether the work has been done as planned () Route Clerk - his job is to
performed in any work.
Scientific Selection, Placement and Training of Workers he will prepare the necessary
instructions
() Instruction card Clerk will perform ther
Taylor wanted the right man to be appointed for the right job in every work accordingly the workers
pertaining to the work and
place. The task of finding the right man should be entrusted only to specialists duties.
various
A number of tests should be conducted to find out whether the candidate frame the tine-table for doing the
(ii) Time and CostClerk -he will
possesses the required qualities. Taylor also stressed the need to train the workers jobs. He will also keep the necessary
records.
cost
in specific areas to secure good performance. In the absence of such a training. factory willbe identified by the
following
the workers wouldonly learn by trial and error and this would result in loss for The persons who willwork in the
the business. names:
that
all the materials and tools ready so
Standardisation and Simplification (i) Gang Boss - his duty is tokeep any delay.
the workers can start their work without
Under Scientific Management the product, the materials used for its that each job is done well in time.
manufacture, the tools and cquipment used, the methods used, quality, time and (ü) Speed Boss -he willensure factory in
the tools and machines in the
the working conditions are all standardised. Standardisation ensures uniformity (i) Repair Boss - he will keep all
and promotes efficiency. perfect working condition.
accordane with
ensure that the work is done in
Mental Revolution (iv) Inspector- his duty is to department.
Even during the days of Taylor, the problem confronting both the standard laid down by the planning
mentioned above, Taylor
and the workers was regarding the division of surplus. Taylorthe management To co-ordinate the work of all the seven persons
mental revolution on the part of both the management and contemplated name 'Disciplhnarian'
the workers on two wanted another person who is given the
issues
Evaluation of Taylor's Scientific Management Management:
i) To work sincerely towards increasing demerits of Taylor's Scientufic
the size of the surplus instead of The following are the merits and
quarrelling over sharing the surplus and
Merits
(i) Toadopt the scientific method of
work in place of the thumb-rule method. 1. Iteliminates the hit-or-miss approach.
Taylor's Differential Piece Rate System for each work. This prevents
go-slow tactics.
Taylor wanted the remuneration 2. It prescribes standard time working conditions,
outDut. He came out with payable to workers to be linked for standardisation of tools, methods,
a piece rate system to their 3. It provides
Sysiem'. Under thiS system, two called the 'differential piece etc. This promotesefficiency.
rates would be prescribed for rate
the workers -one 4. It enables efficient workers to earn
more.
2.5
Principlesol ManagenMeg 2.6
Thought
Demerits Contributions of Experts to Management
| Tbere is afeling among workers thal Scieniic Managenenl lorces then Managerial (Qualities and Training effective.
to work totheir maximumcapacity and this willIhhave an adverse ellecton manager should possess to be
Fayolprescribed cerlain qualities a
their health. These are
2. As everything is standardised, the workers do not have any scope for
(i) Physical health and vigour.
learn.
showing initiative. (ii) Mental to understand and initiative,
3. The scheme of functional foremanship separates planning from doin willingness to accept responsibility,
criticised.
(ii) Moral - energy, firmness,
and this has also come to be loyalty, tact anddignity.
matters not belonging
Scientific Management of Taylor has been appreciated by many managemen general acquaintance with
(iv) General eduçation -
thinkers of his time and it has also got him a unique place among the pioneers of exclusively to the functions performed.
functions performed.
management. (v) Technical - peculiar to the
Henry Fayol (1841-1925) (vi) Experience - from work.
Henry Fayol was a French engineer and industrialist. His contribution to General Principles of Management
management was brought out as a book in French titled "Administration of management. These are
Fayol developed 14 basic principles
Industrielle et Generale" in the year 1916 and was later translated into English. 1. Division of Work
The English version was given the title "General and Industrial Management"
and was published in 1949. 2. Authority and Responsibility
3. Discipline
The contributions of Fayol have been discussed under the following
headings: 4. Unity of Command
1. Classification of business activities, 5. Unity of Direction
Subordination of Individual Interest to Group Interest
2. Managerial qualities and training, 6.
Personnel
3. General principles of management and 7. Remuneration of
4. Elements of management. 8. Centralisation
9. Scalar Chain
Classification of business activities
Fayol classified business activities into six groups as given below 10. Order

(i) Technical (concerning Production), 11. Equity

Personnel
(ü) Comnercial (involving buying, selling and 12. Stability of Tenure of
(i1) Financial (search for and optimum use
exchange), 13. Initiative
of capital),
(iv) Security (protection of property and 14. Esprit De Corps
persons), explained below:
(v) Accounting (costing and statistics) and These principles have been total work to be done is
(vi) Managerial (planning, organising, Work - By this we mean that the
1. Division of particular individual. To
commanding, co-ordinating and each entrusted to a
controlling). divided into small parts, number of activities
making of a shirt involves a
consider an example, the stitching, ironing,
the cloth, stitching, button
to be carried out like cutting performed by different individuals and not
willbe
etc. All these activities labour/work. As each
individual performs
under division of
by one person due course.
he becomes a specialist in
only a particular activity,
2.7
Principles of Manageme
2. Authority and Responsibility - Authority is the official right of Contributions of Experts to Management Thought 2.8
vitue of his official position.
manager. It comes to him by
.Responsibili
is the duty or obligation on the part of asubordinate to account for
piece-wage), it
Whatever be the method of wage payment (time-wage or individuals
working and committed
should be fair, should reward hard
work done by him. Authority can be delegated. Responsibility,
on the and should not lead to over-payment.
other hand. remains intact with each person. It is never
Superior is accountable to
[Link]
his own superior. Aperson to whom
sOmE centralisation and dispersal of authority in
at a particular place is
8. Centralisation - Concentration of authority different places of the
work is assigned should also be given the requisite authority tto cary ou organisation is what is known as decentralisation. The extent or degree of
his duty. Responsibility without authority willI make aperson ineffective organisation to organisation. Decentralisation
centralisation will vary from
On the other hand, authority without responsibility may lead to misuse as the manager's orders have to
of is popular with large business concerns, reaching the subordinates. Small
authority. pass through many intermediaries before
centralised set-up as the orders of the
3. Discipline - Fayol calls upon employees to adhere to the agreement concerns generally prefer to have a
subordinates. Subordinates
reached with the employer in the matter of discipline by being obeient superior can be directly conveyed to the
decentralised arrangement.
by applying themselves fully in the task undertaken, by being energetic generally have to play a greater role in a
and so on. Fayol does not consider discipline to be a one-sided affair H. 9. Scalar Chain -It is the chain of superiors ranging from the highest to the
communication should follow the
firmly believes that if the leader is inefficient and worthless, he cannot lowest level in the organisation. Every
example below:
enforce discipline. Fayol is also not in favour of using warnings, fines prescribed line of authority. This is explained with an
suspensions or dismissals to enforce discipline. A

4. Unity of Command - Acording to this principle, an employee shoud

receive orders from one superior only and is accountable to him alone!F B F
there are two superiors for an employee, he will not know whom he should
report to and whose orders he should carry out first. Dual command isa
perpetual source of conflict. It will undermine authority, endanger G
C
discipline and disturb order and stability.
5. Unity of Direction -This principle says that each group of
activities
having the same objective should have one head and one plan, It is H
different from the principle of unity of command, which says
that an
employee should get orders from one superior only. Unity of direction
means that the efforts of all the members of a I

towards the attainment of that departmental department must be directed

target.
6. Subordination of Individual Interest Gang Plank
to Common Interest-The interest
of the institution is often ignored in
such factors as selfishness, ambition,favour of individual interests due to Figure 2.1Scalar Chain
conflict the interest of the organisationlaziness, etc. When there is such a the line of authority in an
individual interest. Constant supervision,should be made to prevail ove In the diagram shown above, which shows
anything to I, the same will be
supervisors as role models will certainly fair agreement, firmness and organisation, if E wants to communicate
Iwants to convey any
interest prevail over individual interest. help to make organisational routed through DCBAFGH. In the same manner, if
pass through HGFABCD. In such an
7. Remuneration of information to E, the same will that the
possible
Personnel-Fayol holds the view that the
payable to the employees arrangement there is scope for delay. It
is also
should be fair and should. remuneration
satisfaction to both the employees communication may get distorted as it passes through
different persons.
the cost of living, and the emplovers. give maximum To avoid delay, E and I may establish direct contact with each other after
availability of personnel, the Factors such as superiors, namely D and H.
husiness and the general financial obtaining permission from their respective and I is what is referred to as
economic conditions will
influence
position of the Such a direct contact, as the one
between E
remuneration. 'Gang Plank' which is indicated by the
dotted line in the diagram.
 Principles of Managem 2.10
2.9 of Experts to Management Thought
10.
talks about two types
of order a Contributions
order, namely, 'material
Fayol By material order he means 'a place for everything
Order -order'.
'social It is concerned with the provision of
everything that is
2. Organising namely, raw materials.
everything in its place'. He explains social order by saying 'a place i needed to fulfil the objective of the enterprise,
necessary must be adequately
order is necessary to tools, equipment, staff, etc. The resources
everyone and everyone in
his place'. Material avo command. proper co-ordination and
keep the place of material neat a available. Fayolalso favours unity of
necessary to and minimum paper work.
loss of material. It is also
clean. Social order ensures the selection of the right man fort the right ja control, clear definition of duties, initiative

3. Command- The manager, according manager to Fayol, shall strive to get optimurm
should be selected as per the requirements of the job. allhis subordinates. The will be able to perform his
The employces return from
ensures fairness, kindness and inst duties effectively only if he has intimate
knowledge of his staff, leadership
11. Equity - The principle of equity The managers shali motivate efficient employees.
the treatment of employees by their managers. qualities and the capacity to identify and
their subordinates. Equity will bel various departments of a
impartial in their dealings with 4. Co-ordination - Linking the activities of the
workers and the managem co-ordination. The activities of one
promote cordial relationship between the business is what is known as
to this principle, stabiliy. department affect those of another department.
For example, purchase of
12. Stability of Tenure of Personnel-According finance. If only the finance
tenure is necessary for all. It means that an
employee shall not be shi machinery depends upon the availability of
necessary funds. the production
unnecessarily from one job to another. An employee should be give department makes available the proper co
it requires. To secure
work. Only then he w department can get the machinery
enough opportunity to learn every aspect of his transferred fr ordination, every individual and department
shall work with proper
he is frequently
become an expert in his line of work. If understanding with others.
is in favour of stabil
one job to another, he cannot learn any work. Fayol due to the fact that the business wil!
of tenure for alland he says that it is even more important for manageni 5. Control -The need for control arises
failure of the plan. Control reveals
be interested in knowing the success or
personnel. problems encountered in its
the weakness of the plan and the
13. Initiative - The freedom to think and act is what is initiative accordingt implementation. This enables the management to take necessary corrective
Fayol. An cmployee who has the freedom to think and act in a action.
organisation willshow grcater interest in hiswork and this will lead to among management
higher levcl of job satisfaction. A manager, who encourages hi Fayol's principles of management are very popular
criticism that he has not paid adequate attention to
beconm thinkers. There is, however, a
subordinates to take initiative in doing their work, should also
the needs of the workers.
very popular.
Elton Mayo (1880-1949)
14. Esprit de corps-The work done in any organisation is teamwork. Tean leader of the team that conducted the
famous Hawthorne
spirit and co operation among the memtbers of an organisation are essentia Elton Mayo was theexperiments were conducted at the Hawthorne plant of
Experiments. These
lor its sucCess, Inlornal relationships among theemployees should b Western Electric Company in Chicago, U.S.A. Mayo was aprofessor ot industrial
Chcouraged. Such ol lhose cmployces who showgood performance mus psvchology at the Harvard Business School. "The Human Problem of an Industral
be suitablyrewarded. Thiswill induce them to work with oregler amou Morale', The Social Problems of an Industral
convictionthat the Civilisation', 'Management and
nhhi. e Cmployees should also have the brought out by Mayo.
manapement is really interested in their welfare. Organisation' are some of the books
These are given
Elenentsof Management Experiments were conducted in four stages.
The Hawthorne
Fayol has mcntionedthe following clements of management below:
objective of the illumination
Illumination Experiments - The main
I. Planning It is concerned with thinkjng about future
happenings au
1.
Cxperiments was to study the effect
of the quality of lighting in the
workers
also taking nccessary steps to handle them. The plan must take in workers. For this purpose, the
acCount he resources of the business, the workroom onthe efficiency of the inade to work in
One group of workers was
importance ot the wO
undertaken and also the future trends, Fayol favours were divided into two groups. other group was made to
lighting remained [Link]
On completion of that plananother plan shall start. one plan at a tins a room where
lhe pln must be nade flexible to sui the He further says tna
redict future changing nceds. It must asy
developments accurately.
 Principles of Manageme C o n t r i b u t i o n s
of Experts to Management Thought
with the provision of everything that is
2.10
29 - It is concerned
talks abouttwo types oforder, namely, 'material l order
Organising

Order -Fayol
10. 'social order'. By material order he means 'a place for everything anan 2. needed to fulfil the objective the enterprise, namely, raw materials,
of
equipment, staff, etc. The resources necessary must be adequately
everythingin its place'. He explains social order by saying 'a place fo tools,
Fayol also favours unity of command, proper co-ordination and
everyone and everyone in his place'.. Material order is necessary fo avoja available.
initiative and minimum paper work.
clear definition of duties,
loss of material. It is also necessary to keep tthe place of material |neat and control,

clean. Social order ensures the selection oftheright man for the right job. Command -The marnager, according to Fayol, shallIstrive to get optimum
3. from, all his subordinates. The manager will be able to perform his
selectedI as per the requirements of the job, return
The employees should be onlyifheihas intimate knowledge of his staff, leadership
dutiess effectively
equity ensures fairness, kindnesss and justice in andI the capacity to identify and motivate efficient employees.
11. Equity - The principle of managers shall b
qualities

the treatment of employees by their managers. The - Linking the activities of the various departments of a
C o - o r d i n a t i o n

impartial in their dealings with their subordinates. Equity will help to 4.

business is
what is known as co-ordination. The activities of one
nromote cordial relationship between the workers and the management affect those of another department. For example, purchase of
If only the finance
department

depends upon the availability of finance.

12. Stability of Tenure of Personnel-According to this principle, stabilitv of machinery
makes available the necessary funds, the production
employee shall not be shifted
tenure is necessary for all. It means that an
department

be given can get the machinery it requires. To secure proper co-

unnecessarily from one job to another. An employee should and department shall work with proper
department

individual
of his work. Only then he will ordination, every
enough opportunity to learn every aspect transferred from understanding with others.
work. If he is frequently
become an expert in his line of arisess due tothe fact that the business will
one job to another, he cannot learn any work. Fayol is in
favour of stability Control - The need for control plan. Control reveals
managerial 5. in knowing the success orrfailure of the
of tenure for alland he says that it is even more important for be
interested
of the plan and the problems encountered in its
weakness

This enables the management to take necessary corrective

personnel. the
according to
13. Initiative - The freedom to think and act is what is initiative act in an
implementation.

freedom to think and

Fayol. An employee who has the
action.

and this will lead to a of management are very popular among management
organisation willshow greater interest in his work Fayol's principles criticism that he has not paid adequate attention to
higher level of job satisfaction. A manager, who encourages his thinkers. There
is, however, a
subordinates to take initiative in doing their work, should
also become the workers.
the needs of
very popular. Elton Mayo (1880-1949)
Hawthorne
is teamwork. Team team that conducted the famous
14. Esprit de corps - The work done in any organisation Elton Mayo was the leader of the Hawthorne plant of
among the members of an organisation are essential experiments were conducted at the
spirit and co-operation Experiments. These professor of industrial
should be Mayo was a
for its success. Informal relationships among the employees Westem Electric Company in Chicago,
U.S.A.
of an Industrial
encouraged. Such of those employees who show good performance must School. "The Human Problem
nsvchology at the Harvard Business of an Industrial
be suitably rewarded. This willinduce them to work with greater amount Morale', "The Social Problems
conviction that the Civilisation','Management and
of enthusiasm. The employees should also have the brought out by Mayo.
Organisation' are some of the books
management is really interested in their welfare. conducted in four stages. These are given
The Hawthorne Experiments were
Elements of Management
- below: illumination
Fayol has mentioned the following elements of management The main objective of the
and 1. Illumination Experiments - lighting in the
1. Planning It is concerned with thinking about future happenings into experiments was to study the effect
of the quality of
workers
them. The plan must take workers. For this purpose, the
also taking necessary steps to handle workroom on the efficiency of the
of the work was made to work in
account the resources of the business, the importance One group of workers
undertaken and also the future trends. Fayol favours one plan at atime. were divided into two groups. group was made to
further savs that remained constant. The other
On completion of that plan another plan shall start. He a room where lighting
flexible to suit the changing needs. It must also
the plan must be made
predict future developments accurately.