Chapter

Introduction to
7 Management

What you will learn in this chapter ?

1. History of Management
1. Learn how management started in ancient civilizations (like Egypt, Rome, India).
2. Understand how management thinking developed over time and reached the modern
industrial era.

2. Meaning of Management
1. Clearly understand what management means.
2. Learn how different scholars have defined management in their own way.

3. Features of Management
1. Identify the main characteristics of management.
2. Understand why management is an important organizational activity (planning, organizing,
directing, controlling).

4. Nature of Management
1. Understand management as:
a) an Art (requires skills and experience),
b) a Science (has principles and theories),
c) a Profession (has standards and ethics).
2. Learn how all three work together, not separately.

5. Management Styles
1. Learn about the 10 main management styles.
2. Understand:
a) their principles,
b) where they are used,
c) which style is best suited for different types of organizations.

6. Practical Application
1. Learn how to apply management concepts to real-life business situations.
2. Connect theory with actual business decisions and problems.

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1. INTRODUCTION TO MANAGEMENT
1. Management is the most important factor deciding the success or failure of any organisation.

2. It is a dynamic process that converts disorganised resources into useful, goal-oriented results.

3. The word management comes from the Greek word ‘nomos’, meaning management or regulation.

4. Management mainly deals with people, whose behaviour is unpredictable, so coordination is

essential.

5. Management refers to:

a. The process of managing, and
b. The group of people who run and direct an organisation.

6. It is also a discipline and field of study that includes planning, organising and directing business
activities.

7. In simple words, management means “the art of getting things done.”

8. Different thinkers explained management differently:

a. Mary Parker Follett → Getting work done through people
b. F.W. Taylor → E iciency and cost reduction
c. Henri Fayol → Planning, organising, coordinating and controlling
d. Peter Drucker → Overall management of business and people

9. The main purpose of organisations is wealth creation, and the manager’s role is to add value to this
process.

Definitions of Management by Pioneers

Pioneer Definition Key Focus

Mary Parker Follett Management is the art of getting things done Human relations and leadership
through people.

F.W. Taylor Management is knowing exactly what you Efficiency and cost reduction
want men to do, and then seeing that they do (Scientific Management)
it in the best and cheapest way.

Henri Fayol To manage is to forecast and to plan, to Administrative functions

organize, to command, to coordinate, and to (Classical Management)
control.

Peter Drucker Management is a multi-purpose organ that Holistic, organisational role of

manages a business, manages managers, management
and manages workers and work.

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2. GENESIS OF MANAGEMENT (FROM VEDIC TO INDUSTRIAL ERA)
1. Management: An Ancient Concept
1. Management is not a modern concept created by the Industrial Revolution.
2. Though formal theories are recent, managerial practices are as old as civilization.
3. Activities like:
a) Building the Pyramids
b) Administering empires
c) Conducting large-scale trade
required organised management.

2. Management in the Ancient and Vedic Era

In ancient societies, management was closely linked with:
a) Governance
b) Military strategy
c) Large infrastructure projects

3. Vedic and Arthashastra Tradition

1. The Indian subcontinent offers early evidence of structured management systems.
2. Vedic texts (around 1500 BCE) describe hierarchical social and professional structures.
3. Kautilya’s Arthashastra (around 300 BCE) is the most authoritative ancient text on administration.
4. Arthashastra covered:
1. Public Administration – State finance, taxation, foreign policy, and judicial administration
2. Organisational Design – Departmental structure and roles of superintendents (Adhyaksha)
3. Resource Allocation – Efficient use, storage, and distribution of resources
5. These systems recognised:

a) Specialisation
b) Hierarchy
c) Accountability
which form the base of modern management theory.

Note to self

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4. Management in the Pre-Industrial Era
1) After the decline of empires, management practices were mainly seen in:
a. The Military
b. The Church

2) Roman Catholic Church

a. Developed a highly centralised and hierarchical administrative structure.
b. Used functional specialisation and clear communication lines.
c. Influenced early organisational thinkers.

3) Military Organisations
a. Developed concepts like:
i. Unity of command
ii. Chain of command
iii. Span of control
iv. Strategic planning
b. These principles were later adopted in business management.

4) Guild and Mercantile Systems

a. Introduced early forms of:
i. Quality control
ii. Apprentice training
iii. Standardised production

5. Industrial Revolution and Modern Management

1. The Industrial Revolution was the real trigger for modern management theory.

2. It marked a shift from:

a) Agrarian and manual production
b) To machine-based, factory production

3. Industrial Revolutions
1. First (1760–1840): Mechanisation and steam power
2. Second (1870–1914): Steel, electricity, internal combustion engines
3. Third (1950–1970): Electronics, computers, information technology
4. Fourth (2010–present): Integration of physical, digital, and biological technologies
5. Fifth (Emerging): Biotechnology, nanotechnology, and quantum computing

Note to self

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6. Features of Management

1. Goal-Oriented Process
Management works to achieve pre-determined organisational goals. All activities like planning,
budgeting, and coordination are directed towards objectives such as profit, growth, or service
delivery.

2. Universal Application
Management is required in all types of organisations, at all levels, and across all departments.
1. The basic functions—planning, organising, and controlling—remain the same in schools,
banks, sports teams, and companies, though techniques may differ.

2. Management exists at:

a) Top level (strategic planning)
b) Middle level (execution)
c) Supervisory level (operational control)

3. Multi-Dimensional
Management involves three dimensions:
1. Management of Work – deciding what work is to be done, how, and by whom.
2. Management of People – staffing, motivation, leadership, and conflict resolution.
3. Management of Operations – converting inputs into finished goods or services.

4. Continuous Process
Management functions—planning, organising, staffing, directing, and controlling—are performed
continuously. Managers plan, act, control, and re-plan in an ongoing cycle.

5. Group Activity
Management is a collective effort. It integrates the activities of individuals with different goals into a
common organisational objective.

6. Dynamic Function
Management operates in a changing environment—economic, political, social, and technological—
and must continuously adapt its policies and actions.

7. Intangible Force
Management cannot be seen physically, but its impact is visible through order, efficiency,
motivation, and timely completion of work. Poor management results in chaos, delay, and
wastage.
Note to self

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3. NATURE OF MANAGEMENT
1. A long-standing debate in management studies is whether management is an art, a science, or a
profession.
2. The accepted view is that management is a synthesis of all three—art, science, and profession.

3.1 Management as a Science

1. Meaning of Science
Science is a systematized body of knowledge developed through scientific methods, where
principles and relationships are discovered, tested, and established.

2. Scientific principles are not permanent and may change with new knowledge and discoveries.

3. Science includes:
a) Exact sciences such as physics, chemistry, and mathematics, and
b) Social sciences such as economics, sociology, and psychology, which deal with human
behaviour and are therefore variable.

4. Management deals with human behaviour, which is unpredictable, and hence is considered a
variable or social science rather than an exact science.

5. Management has developed a theoretical base with principles related to coordination, organisation,
and decision-making.

6. Although controlled experiments like natural sciences are not always possible in management, the
same limitation exists in disciplines such as economics and political science.

7. Hence, there is no valid objection to treating management as a science.

8. Management is still a growing and evolving field of study.

Arguments for Management as a Science

1. Systematized Body of Knowledge

Management has established principles and concepts such as unity of command, division of work,
motivation, and hierarchy.

2. Use of Scientific Methods

Managers use tools like operations research, statistical analysis, and simulation models for decision-
making.

3. Cause-and-Effect Relationship
Management principles attempt to identify relationships, such as low morale leading to low
productivity.

4. However, since human behaviour cannot be precisely measured or controlled, management

principles act as guidelines rather than absolute laws, making it an inexact science.

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3.2 Management as an Art
1. Meaning of Art
Art refers to the practical application of skill and creativity to achieve desired results.
2. Management focuses on how things are done, not just theoretical knowledge.

Arguments for Management as an Art

1. Personalized Application
Managerial success depends on individual skill, judgement, and style; different managers may apply
the same theory differently.

2. Creativity and Innovation

Management requires innovation in planning, strategy, and problem-solving, especially in new
situations.

3. Practice and Experience

Managerial skills improve through continuous practice, experience, and real-world decision-making.

3.3 Management as a Profession

A profession requires specialized knowledge, formal education, qualification, and adherence to a
code of conduct.

Evaluation of Management as a Profession

1. Well-Defined Body of Knowledge – Present

Management knowledge is extensive and taught through courses like MBA and BBA.

2. Restricted Entry – Not Fully Present

There is no legal requirement of a specific qualification to become a manager, though qualifications
are preferred.

3. Professional Association – Developing

Bodies such as AIMA exist, but membership is not compulsory.

4. Ethical Code of Conduct – Developing

Ethical codes exist but are not uniformly enforced by a central authority.

5. Service Motive – Present

Along with profit, modern management emphasizes social responsibility and customer focus.

Note to self

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4. TYPES OF MANAGEMENT STYLES
Meaning of Management Style
1. Management style refers to the manner in which a manager exercises authority, makes decisions,
and interacts with team members.
2. No single style is universally best; the appropriate style depends on the situation, such as the task,
team maturity, and time constraints.

1. Autocratic Management
1. Meaning
Autocratic management is a classical, top-down approach where the manager takes decisions
independently and expects strict compliance.

2. Principle
Complete centralization of authority. The manager decides work methods, assigns tasks, and
controls rewards.

3. When to Use
a) Crisis situations
b) When quick decisions are required
c) When managing inexperienced or low-skilled employees

4. Example
A Fire Chief during an active building fire, issuing rapid, non-negotiable commands without
discussion, where time and safety demand absolute authority.

5. Features of Autocratic Management

1. Centralized Decision-Making – Decisions are taken by the manager without subordinate
participation.
2. Limited Employee Participation – Employees are not involved in decision-making.
3. Chain of Command – Instructions flow from top to bottom and must be obeyed.

6. Merits
1. Quick decision-making in crisis situations
2. Clear chain of command and accountability
3. Effective for unskilled or temporary workers

7. Demerits
1. Low employee morale, creativity, and engagement
2. Risk of poor decisions if the manager lacks complete information
3. Creates a hostile or fearful work environment

Note to self

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2. Persuasive Management

1. Meaning
The manager retains final decision-making authority but attempts to convince employees of the
benefits of the decision.

2. Principle
The manager explains the reasons behind decisions to reduce resistance, even without taking
employee input.

3. When to Use
When the decision is critical, but employees need understanding and acceptance of the outcome.

4. Example
A manufacturing plant manager introducing a new time-tracking software explains how it improves
resource allocation and prevents future layoffs, persuading employees to accept the change.

5. Features of Persuasive Management

1. Final Authority with Manager – Decisions are not put to vote; explanation is the key
difference from autocratic style.
2. Emphasis on Communication – Clear and persuasive communication, including active
listening.
3. Rationale and Logic – Logic, evidence, and benefits of decisions are explained.
4. Trust and Relationship Building – Employee feedback is valued even if the decision is
unilateral.

6. Merits
1. Quick and efficient decision-making
2. Better acceptance due to clarity and understanding
3. Reduced resistance compared to autocratic style

7. Demerits
1. Still a top-down decision-making process
2. Weak reasoning may create distrust and resentment

Note to self

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3. Paternalistic Management
1. Meaning
The manager acts as a father figure, showing concern for employee welfare while expecting loyalty
and trust.

2. Principle
The manager provides support, security, and benefits, believing that happy employees are more
productive, and takes decisions for the “good of the team.”

3. When to Use
In stable, long-term organisations where loyalty is highly valued.

4. Example
The owner of a multi-generational family business providing generous benefits and support while
expecting loyalty, obedience, and adherence to traditions.

5. Features of Paternalistic Management

1. Leader as Authority – Final decisions taken by the manager as a guardian figure.
2. Welfare and Support – Extensive care for employees’ personal and professional well-being.
3. Expected Loyalty – Loyalty and obedience in return for benefits and security.
4. Reward and Discipline – Compliance rewarded; non-compliance disciplined as guidance.

6. Merits
1. High employee loyalty and low turnover
2. Clear and quick decisions
3. Harmonious work environment

7. Demerits
1. Employees may become over-dependent
2. Parent-child relationship reduces initiative
3. Organisational culture may collapse if the leader leaves

Note to self

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4. Democratic Management
1. Meaning
Democratic management is a style where decisions are taken based on majority rule, and the
manager acts as a facilitator, ensuring that all views are heard.

2. Principle
Authority is decentralized, with shared governance and high employee involvement, and the
manager trusts the team’s collective intelligence.

3. When to Use
o When team expertise is high
o When creativity is required
o When acceptance of decisions is critical for implementation

4. Example
A marketing team lead involves copywriters, designers, and media buyers to discuss, debate, and
vote on the final name and slogan for a new product.

5. Features of Democratic Management

1. Participative Decision-Making – Employees actively contribute ideas and perspectives.

2. Employee Empowerment – Employees freely express opinions, take responsibility, and
engage in achieving organisational goals.
3. Open Communication – Transparent communication exists between managers and
employees.

6. Merits
1. High employee morale and commitment
2. Better and more innovative decisions through pooled expertise
3. Development of employee skills and experience

7. Demerits
1. Slow decision-making due to discussions and consensus-building
2. Ineffective in crisis or high-pressure situations
3. Dominance of strong individuals in group decisions

Note to self

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5. Consultative Management

1. Meaning
In consultative management, the manager retains final decision-making authority but actively
seeks employee input before taking decisions.

2. Principle
The manager asks, listens, and then decides. Employee advice is valuable but not binding.

3. When to Use
When technical or specialized knowledge is required, but strategic control must remain with the
manager.

4. Example
A CEO considering an acquisition consults the CFO, Head of Legal, and Head of HR, listens to their
expert opinions, and then makes the final decision.

5. Features of Consultative Management

1. Final Decision by Manager – Authority and accountability remain with the manager.
2. Active Solicitation of Input – Managers proactively seek employee expertise through
discussions and open-door policies.
3. Two-Way Communication – Managers share the problem and options, while employees
provide suggestions.
4. Increased Employee Engagement – Involvement boosts morale, motivation, and job
satisfaction.

6. Merits
1. Combines decision-making speed with expert input
2. Employees feel valued and respected
3. Better-quality decisions due to informed perspectives

7. Demerits
1. Frustration if employee input is repeatedly ignored
2. Heavy dependence on the manager’s ability to synthesize advice

Note to self

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6. Transformational Management
1. Meaning
Transformational management focuses on inspiring and motivating employees to work beyond self-
interest for the good of the organisation and to achieve ambitious goals.

2. Principle
Based on idealized influence (charisma), inspirational motivation (vision), intellectual
stimulation (innovation), and individualized consideration (coaching).

3. When to Use
a) During major organisational change
b) During restructuring
c) When creativity and employee buy-in are essential for a new vision

4. Example
Elon Musk in the early days of SpaceX or Tesla inspired employees to achieve seemingly impossible
goals by challenging norms and linking work to a larger vision for humanity.

5. Features of Transformational Management

1. Visionary Leadership – Communicating a compelling future vision and aligning employee
efforts toward it.
2. Charismatic Leadership – Influencing employees through enthusiasm, energy, and
commitment to organisational values.
3. Intellectual Stimulation – Encouraging creativity, innovation, curiosity, and continuous
learning.

6. Merits
1. Highly engaged and high-performing organisational culture
2. Effective for driving major organisational change
3. Development of future leaders

7. Demerits
1. Requires high levels of managerial skill and charisma
2. Less effective in stable or routine environments
3. Results may take a long time to appear

Note to self

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7. Visionary Management

1. Meaning
Visionary management focuses on mobilizing people towards an inspiring future vision.

2. Principle
The leader articulates a clear, long-term direction, simplifies complex challenges into an
understandable narrative, and focuses on what is to be achieved rather than how.

3. When to Use
a) When an organisation lacks direction
b) After acquisitions or market disruptions requiring a new path

4. Features of Visionary Management

1. Inspiring Future Vision – The leader presents a bold, persuasive picture of the future that
creates shared purpose.
2. Empowerment and Autonomy – The destination is defined, but teams are given freedom to
decide how to reach it.
3. Innovation and Strategic Risk-Taking – Encourages creativity and challenges the status quo,
with comfort in uncertainty.
4. Focus on Long-Term Goals – Emphasizes long-term growth and alignment, though short-
term operational details may be overlooked.

5. Merits
1. Strong motivation and sense of purpose
2. Encourages innovation within the vision
3. Suitable for new, growing, or rapidly changing organisations

6. Demerits
1. Can fail without concrete, actionable steps
2. Teams may lose direction if operational guidance is insufficient

Note to self

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8. Coaching Management
1. Meaning
Coaching management treats employees as high-potential individuals and focuses on developing
their long-term strengths and capabilities.

2. Principle
Emphasis on dialogue, feedback, goal-setting, and skill development, with managers asking
questions instead of giving direct answers.

3. When to Use
a) With talented employees open to growth
b) In organisations focused on long-term talent development
4. Example
A consulting firm manager guides a junior associate by asking strategic questions about client
presentations to develop long-term thinking skills.

5. Features of Coaching Management

1. Guided Problem-Solving – Managers use questions to help employees discover solutions
independently.
2. Focus on Long-Term Capability – Priority is given to skill and potential development over
short-term task completion.
3. Empowerment and Self-Reliance – Builds confidence, accountability, and self-awareness.
4. Continuous Developmental Feedback – Regular feedback and active listening promote
learning and improvement.

6. Merits
1. Maximizes employee potential and skill development
2. Builds resilient, independent teams
3. High retention among motivated employees

7. Demerits
1. Time-consuming and requires sustained interaction
2. Ineffective with employees resistant to coaching or self-improvement

Note to self

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9. Servant Leadership

1. Meaning
Servant leadership prioritizes the growth, well-being, and empowerment of employees and the
community.

2. Principle
The leader is a servant first, focusing on trust, ethics, and meeting team needs; authority is earned
through respect, not position.

3. When to Use
a) Knowledge-based organisations
b) Non-profits
c) Environments where empathy, collaboration, and ethics are critical

4. Example
A restaurant kitchen manager supports staff with resources, fair treatment, and hands-on help
during peak hours to enable high-quality performance.

5. Features of Servant Leadership

1. Serving-First Mentality – Leadership begins with service to people and community.
2. Fostering Growth and Development – Commitment to personal and professional
development of employees.
3. Active Listening and Empathy – Deep listening and genuine understanding of employee
concerns.
4. Stewardship and Ethical Foresight – Responsible management of resources with ethical,
long-term decision-making.

6. Merits
1. High trust, loyalty, and morale
2. Productive and customer-focused employees
3. Strong ethical and collaborative culture

7. Demerits
1. Difficult to apply in rigid, hierarchical organisations
2. May be perceived as weak or overly soft in tough situations

Note to self

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10. Laissez-Faire Management

1. Meaning
Laissez-faire management, also called delegative management, gives employees almost complete
freedom to perform their work.

2. Principle
It follows a hands-off approach. The manager provides objectives and resources but allows
employees to decide their own structure, processes, and decision-making methods.

3. When to Use
1. With highly skilled and self-motivated experts
2. In teams such as R&D or creative professionals who thrive on autonomy

4. Example
A scientific research lab director managing experienced PhD researchers ensures funding and
equipment access, while giving them full freedom to conduct independent research.

5. Features of Laissez-Faire Management

1. Employee Autonomy – Employees decide how and when work is done.
2. Limited Supervision – Manager intervenes only when necessary or requested.
3. Trust in Employees – Strong belief in employees’ ability to perform without constant oversight.

6. Merits
1. High autonomy, creativity, and job satisfaction for skilled workers
2. Quick project completion when the team is competent
3. Allows managers to focus on high-level strategic issues

7. Demerits
1. Poor coordination and missed deadlines if discipline or clarity is lacking
2. Ineffective for new, inexperienced, or unskilled teams

Note to self

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1.

A factory has sufficient machines and money, but production is poor because departments are not
aligned. According to the meaning of management, this failure is mainly due to poor:

A. Resource availability
B. Coordination of human efforts
C. Capital planning
D. Technological efficiency

2.

An organisation restructures its raw materials, manpower, and capital to achieve fixed targets. This
best reflects management as a:

A. Static system
B. Administrative authority
C. Dynamic process
D. Control mechanism

3.

Which situation best explains why management mainly deals with people?

A. Machines require supervision

B. Capital must be protected
C. Human behaviour cannot be predicted with certainty
D. Labour laws require compliance

4.

A CEO says, “Management exists even if no formal theory is written.” Which idea from the genesis of
management supports this statement?

A. Management began in factories

B. Management is a post-industrial concept
C. Managerial practices are as old as civilisation
D. Management emerged after the Arthashastra

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5.

Large-scale construction of pyramids in ancient times proves that management existed because such
work required:

A. Labour unions
B. Industrial machines
C. Organised planning and coordination
D. Written policies

6.

In ancient societies, management activities were closely linked to governance and military strategy
mainly because:

A. Trade was limited

B. Infrastructure projects were massive
C. Religion controlled administration
D. Education systems were centralised

7.

Kautilya’s Arthashastra is considered important in management history because it covered:

A. Only ethical leadership

B. Only military administration
C. State finance, structure, and resource allocation
D. Labour welfare systems

8.

Which modern management concept directly traces its roots to Arthashastra?

A. Motivation
B. Accountability and hierarchy
C. Employee participation
D. Democratic leadership

9.

After the decline of empires, management practices survived mainly in institutions that required:

A. Innovation
B. Discipline and command structure
C. Market competition
D. Profit orientation

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10.

Which modern business principle was directly borrowed from military organisations?

A. Division of labour
B. Unity of command
C. Profit maximisation
D. Employee welfare

11.

Guild systems contributed to management development mainly by introducing:

A. Large-scale automation
B. Financial planning
C. Quality control and skill training
D. Strategic leadership

12.

Why is the Industrial Revolution called the real trigger for modern management theory?

A. It created labour laws

B. It replaced trade with factories
C. It shifted production from manual to machine-based systems
D. It introduced professional managers

13.

Which change made management more complex during the Industrial Revolution?

A. Increase in population
B. Centralisation of religion
C. Factory-based mass production
D. Decline of trade

14.

Which Industrial Revolution is MOST associated with electronics and IT?

A. Mechanisation phase
B. Steel and electricity phase
C. Digital phase
D. Biological integration phase

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15.

The Fourth Industrial Revolution differs from earlier ones because it focuses on:

A. Speed of machines
B. Labour replacement
C. Integration of physical, digital and biological systems
D. Mass employment

16.

Management is called a goal-oriented process because:

A. Managers set personal targets

B. Activities are random
C. All actions are directed toward predetermined objectives
D. Profit is compulsory

17.

A school, a bank, and a sports team all require planning and control. This shows management has:

A. Limited scope
B. Departmental relevance
C. Universal application
D. Industrial bias

18.

Strategic decisions like expansion and mergers are usually taken at which management level?

A. Supervisory
B. Middle
C. Top
D. Operational

19.

Execution of plans and coordination between departments mainly happens at the:

A. Top level
B. Middle level
C. Supervisory level
D. External level

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20.

Deciding what work is to be done, how, and by whom relates to:

A. Management of people
B. Management of operations
C. Management of work
D. Management of strategy

21.

Resolving conflicts and motivating employees fall under:

A. Management of operations
B. Management of work
C. Management of people
D. Strategic management

22.

The conversion of raw materials into finished goods comes under:

A. Management of people
B. Management of work
C. Management of operations
D. Management of planning

23.

Management is considered a continuous process because:

A. Managers never stop working

B. Functions overlap and repeat
C. Goals change daily
D. Control is optional

24.

Why is management described as a group activity?

A. It is performed by committees
B. It integrates individual efforts toward common goals
C. It avoids individual responsibility
D. It eliminates hierarchy

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25.

Management is called a dynamic function because it must respond to changes in:

A. Only technology
B. Only economy
C. Social, political, economic and technological environment
D. Internal policies only

26.

Although management cannot be seen, its presence is felt through:

A. Written rules
B. Authority
C. Order, efficiency and motivation
D. Legal structure

27.

Poor management in an organisation is MOST likely to result in:

A. Profit decline only

B. Delay, chaos and wastage
C. Low employee salaries
D. Reduced hierarchy

28.

Mary Parker Follett’s definition highlights management’s focus on:

A. Authority
B. Technology
C. Human relations
D. Cost control

29.

F.W. Taylor’s view of management is MOST suitable for situations where the focus is on:

A. Creativity
B. Employee participation
C. Efficiency and cost reduction
D. Long-term vision

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30.

Peter Drucker’s definition suggests management is:

A. Task-oriented
B. Worker-oriented
C. A multi-purpose organisational function
D. Limited to production

Answer Key (No shortcuts — verify conceptually)

1. B

2. C

3. C

4. C

5. C

6. B

7. C

8. B

9. B

10. B

11. C

12. C

13. C

14. C

15. C

16. C

17. C

18. C
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19. B

20. C

21. C

22. C

23. B

24. B

25. C

26. C

27. B

28. C

29. C

30. C

25
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