Duration (In

Unit Title/Topics Hours) Marks

Management in Indian Culture and Tradition, Role of Manager, Functions

I 18 20
and responsibilities of management, Principles of management, Schools
and thoughts of management.
Title/Topics Duration (In
Unit Hours) Marks
Planning: Process, Types and Significance, Planning v/s Forecasting,
II Objectives, Strategies, Policies, MBO, Decision-Making-Process and 18 20
Significance, Planning for Start-ups.
Duration (In
Unit Title/Topics Hours) Marks
Organization: Nature and Purpose of Organization. Importance and process
of organization, Departmentalization, Organizational structures: types and
III Relevance, Line & Staff relationship, Delegation of Authority, 18 20
Decentralization. Difference between Authority and power, Authority and
Responsibility
Duration (In
Unit Title/Topics Hours) Marks
Staffing and Directing: Meaning and Importance of staffing, Recruitment-
Sources, Selection, Training: Meaning, Importance and Methods Direction-
IV Nature and Purpose. Leadership: Meaning, Importance, Types of Leadership, 18 20
Leadership Styles. Motivation: Types & Significance, Maslow’s Need
Hierarchy, Theory X and Theory Y of Motivation.
Duration (In
Unit Title/Topics Hours) Marks

Controlling: Meaning and Concept, Definition, Characteristics, Need for

Controlling, Importance and Process of controlling, Effective Control
V 18 20
System, Techniques of control An overview of Strategic Management, SWOT
 REFERENCE BOOKS
 Neeru Vasishth, Vibhuti Vasishth, Principles of Management, Taxmann,
2022, Edition1
 T. N. Chhabra, Principles & Practices of Management, Dhanpat Rai & Co. (P)
Ltd, New Delhi, 2018
 LM Prasad, Principles of Management, Sultan Chand & Sons, New Delhi,
2019
 S.C. Saxena, Business Management, Sahitya Bhawan Publications, 2023

 Newman & Warren : The Process of Management : Concepts, Behaviour

and Practice, P.H.I.
 Diwan & Agrawal : Management, Principle and Practices, Excel Books.
 CONTINUED……
 Drucker F. Peter: Management.
 Rovwer J.C. & Daniel : Management & Practice,
 Koontz. H, Weihrich Heinz: Essentials of Management, 2001.
 Nolakha. R. L: Principles of Management: Ramesh Book Depot: 2009
 Sudha. G.S: Principles of Management, 2009.
 Shah and Tated: Management Concepts
 R.D. Agrawal, Organisation & Management, MC Graw Hill, New Delhi 1982
 S.M. Shukla, Principles of Management, Sahitya Bawan Publication, Agra
(UP)
 MANAGEMENT IN INDIAN CULTURE AND
TRADITION
 Culture is the backbone of the society. It refers to the cumulative deposit
of the knowledge, experience, beliefs, values, attitudes and religion.
 Indian culture and philosophy have a very strong foundation in the ethics, ethos
and values.
 India is a large nation of diverse cultures, religions and rituals. India is
famous for its unity in diversity.
 Indian culture is the way of living of the people of India. India’s languages,
religions, dances, music, architecture, food and customs differ from place
to place.
 Indian culture is highly influenced by the religious aspects they have been credited
with the shaping of the Indian philosophy, literature, music, art and music.
 There has been significant fusion of the cultures among Buddhists, Hindus,
Muslims, Jains, Sikhs, and various tribal populations in India.
 MANAGEMENT IN INDIAN CULTURE AND
TRADITION
 There are two main principles of Indian model of management, namely human
values and holism:
 Human values refer to the spiritual, ethical and moral values.
 Indian management is a spiritualistic model. It is based in the various
cultural aspects and the values enshrined in the culture.
 Holism is the resultant of rich cultural heritage on account of the four Vedas,
namely, Rig Veda, Yajur Veda, Sama Veda and Atharva Veda; the
Upanishads, the Bhagwad Gita, Ramayana and the teachings of
Buddhism & Jainism which has imparted precious ethics and ethos to the
Indian people and is being transmitted from generation to generation.
 Indian culture is the amalgamation of the several cultures and is also
influenced by the vast history of India. India is one of the oldest civilizations
 MANAGEMENT IN INDIAN CULTURE AND
TRADITION
 The Arthashastra (c. 300 BCE): The Arthashastra, written by Kautilya (also
known as Chanakya), is one of the earliest and most comprehensive treatises
on statecraft, economic policy, and military strategy.
 Key management concepts from Arthashastra:
 Organizational structure: It describes a hierarchical structure for kingdom
management, which can be compared to modern corporate structures.
 Human resource management: Details on recruitment, training, and
performance evaluation of officials.
 Financial management: Discusses taxation, budgeting, and economic
policies.
 Strategic planning: Emphasizes the importance of long-term planning and
intelligence gathering.
 KEY CONTRIBUTIONS BY KAUTILYA CHANAKYA IN MODERN
MANAGEMENT THOUGHTS
 Strategic Management: Kautilya emphasized the importance of long-term planning and
strategy formulation. His ideas align with contemporary strategic management practices,
such as SWOT analysis and scenario planning.
 Leadership and Governance: Kautilya outlined qualities of an effective leader and the
importance of ethical governance. These principles are relevant to corporate governance
and ethical leadership in today's organizations.
 Human Resource Management: Kautilya detailed methods for recruitment, training, and
performance evaluation. His ideas on merit-based selection and skill development are
fundamental to modern HR practices.
 Economic Policies: Kautilya proposed sophisticated economic policies, including taxation
and trade regulations. His economic theories can provide insights into fiscal policy and
economic governance
 Risk Management: Kautilya discussed various types of risks and strategies to mitigate
them. His risk classification is similar to modern enterprise risk management frameworks.
 KEY CONTRIBUTIONS BY KAUTILYA CHANAKYA
IN MODERN MANAGEMENT THOUGHTS

 Organizational Structure: Kautilya described a hierarchical structure for state

administration. This concept is reflected in modern organizational charts and reporting
structures.
 Intelligence Gathering: Kautilya emphasized the importance of information for decision-
making. His ideas align with modern concepts of market research and competitive
intelligence.
 Conflict Resolution: Kautilya provided strategies for managing conflicts and
negotiations. These principles are applicable in modern dispute resolution and negotiation
tactics.
 Resource Management: Kautilya discussed efficient use and allocation of resources. His
ideas relate to modern resource optimization and sustainability practices.
 Ethics and Corporate Social Responsibility: Chanakya emphasized the importance of
ethical behavior and the ruler's responsibility towards subjects. These concepts align with
 MANAGEMENT IN INDIAN CULTURE AND
TRADITION
 Ramayana happened in Treta Yuga (9582 BCE to 5694 BCE) and Mahabharata
happened in Dwapara Yuga (5694 BCE to 3102 BCE)
 Key management concepts from Bhagavad Gita (c. 200 BCE - 200 CE): While
primarily a spiritual text, the Bhagavad Gita contains numerous management lessons.
 Leadership: The dialogue between Krishna and Arjuna exemplifies mentorship and
guidance.
 Work ethics: Emphasizes the importance of doing one's duty without attachment to
results.
 Decision-making: Addresses the challenges of making difficult decisions under
pressure.
 Self-management: Stresses the importance of self-control and discipline.

Example: The concept of "Karma Yoga" or selfless action can be applied to modern
management practices, encouraging leaders to act for the greater good rather than
 MANAGEMENT IN INDIAN CULTURE AND
TRADITION
 Ramayana(7th century BCE–3rd century CE)
 Upholding ethics and morality: At the heart of the Ramayana, Lord Rama, as a
leader, is an epitome of ethical decision-making.
 Importance of team building: Hanuman's role in the Ramayana is a perfect example
of team building, strength and dedication.
 Decision making and responsibility: What we learn from Ramayana is Lord Rama's
commitment to duty and ethical principles. An important life skill involving decision
making is accountability.
 Crisis management: The abduction of Sita by Ravana was a pivotal crisis in the
Ramayana and Lord Rama's response to this dire situation was marked by remarkable
composure. Instead of panicking, he assessed the situation calmly and gathered
support from allies like Hanuman and the vanara (monkey) army.
 Strategic planning and execution: One of the most important life skills is strategic
 MANAGEMENT IN INDIAN CULTURE AND
TRADITION
 Panchatantra (c. 200 BCE - 300 CE): This collection of animal
fables/tales contains numerous management lessons.
 Key management concepts from Panchatantra:
 Strategic thinking: Many stories illustrate the importance of clever
problem-solving.
 Teamwork: Fables often demonstrate the power of cooperation.
 Leadership qualities: Characters often exemplify good and bad
leadership traits.
Example: The story of the crow and the water pitcher demonstrates
innovative problem-solving, which can be related to modern concepts of
creative thinking in management.
 MANAGEMENT IN INDIAN CULTURE AND
TRADITION
 Buddhist and Jain traditions: The ethical principles of Buddhism and Jainism
have had a profound influence on society, shaping attitudes, behaviors, and
cultural norms. Rooted in compassion, non-violence, truthfulness, and self-
discipline, these principles have not only guided individual conduct but also
contributed to the transformation of ancient Indian societies and their ongoing
impact on the Indian management thought.
 Key management concepts:
 Ethical business practices: Emphasis on right livelihood and non-violence in
business.
 Mindfulness: The practice of being present and aware, which is gaining traction
in modern management.
Example: The Buddhist concept of the "Middle Way" can be applied to
management as a principle of balanced decision-making, avoiding extremes.
 MANAGEMENT LESSONS FROM INDIAN CULTURE

 (a) Management Attitude – Top management having firm belief in value-oriented

holistic management. Profit is earned through service and satisfaction of all stakeholders
– employees, customers, shareholders and citizens. The concept of Shubh-Labh i.e.
the earning of Profits (Labh) should be through the practice of ethical ways of earning
profits to make it Shubh. Fulfillment of social responsibility must be ensured.
 (b) Humanizing the Organisation – Looking at the three aspects of humane
organisations, i.e., inter-personal relations, man-machine equation where man is the
prime concern and inner management through mental and spiritual growth of
individuals.
 (c) Interiorizing Management – Self management or management by
consciousness. When the soul manages the other four members of the human being,
namely, the body, mind, intellect and the heart, the conflict these four have amongst
them can be resolved. This is management by consciousness. The objective of self
management is to first know and manage oneself and then manage others.
 MANAGEMENT LESSONS FROM INDIAN CULTURE
 (d) Self-introspection – Embark upon self-study, self-analysis and self-
criticism to locate areas of friction and disharmony, a self examination of one’s
own thoughts, feelings, emotions, sensations and passions and a desire to
reduce and subdue the ego.
 (e) Brain-stilling – Keeping the mind calm and compose is necessary for
rational and enduring decisions. A perfect Mounum (calm mind enjoying
tranquility) is necessary. Brain-stilling or meditative silence is the most
reliable method to discover solutions to complex problems and difficulties to
be tackled by logical reasoning. While meditating, the inner mind or higher
consciousness called Chetana comes into calm mind leading to innovative
solutions.
 (f) Stepping Back (for a while) – Never decide anything, never speak a word,
never throw yourself into action without stepping-back. The stepping back from a
situation for a while enables one to control and master a situation.
 MANAGEMENT LESSONS FROM INDIAN CULTURE
(g) Self-dynamising Meditation – A dynamic meditation is meditation of
transformation of lower consciousness into higher consciousness and hence is
called transforming meditation. Through meditation, in a silent and calm mind,
one reaches a higher level of consciousness which offers guidance in the form
of intuitions to tackle a multitude of problems. This is called consciousness
approach to management.
(h) Role of Intuition – Intuition is the act of coming to direct knowledge or
certainty without reasoning or inferring. It is immediate cognition by the inner
mind and when fully developed, is efficient and effective for taking prompt and
sound decisions. Intuition skills enable one to cope with confidence the
fluctuating environment and rapid changes. Faith is a prerequisite to develop
and realize the power of intuition.
Managers and subordinates both can adopt the following practices in modern
 MANAGEMENT LESSONS FROM INDIAN CULTURE
 There should be religious and human touch in people.
 There should be feeling of social responsibility and obligations among the
people
 Actions should be taken to build character of the people.
 Development of personality through self confidence, and self respect
should be initiated.
 Ethical behaviour should be promoted by teaching of ethics.
 Respect for old culture and heritage should be ensured.
 There should be spirituality at workplace.
 Decision making should be based on moral judgements and standards.

 MANAGEMENT: MEANING & DEFINITION
 Management is an art of getting things done through others.
 Management is to plan, organize, direct and control the resources of the
organization for obtaining common objectives or goals. It is related with resources
like material, money, machinery, methods, manufacturing and marketing.
 Louis Allen‘s definition of management is one of the best, shortest, and
sweetest. According to him “Management is what a manager does.”
 Management is necessary for all types of organization to attain the following
objectives:
 Getting Maximum Results with Minimum Efforts
 Increasing the Efficiency of factors of Production
 Maximum Prosperity for Employer & Employees
 Human betterment & Social Justice
 CONTINUED…

 According to F. W. Taylor:- “Management is the art of knowing what you want to do

and then seeing that it is done in the best and cheapest way.”
 According to Henry Fayol:- “To manage is to forecast and to plan, to organize, to
co-ordinate and to control.”
 According to George R. Terry:- “Management is a distinct process consisting of
planning, organizing, actuating and controlling, performed to determine and
accomplish the stated objective by the use of human beings and other resources.”
 According to Harold Koontz :- “Management is the art of getting things done
through others and with formally organized groups. It is the art of creating an
environment in which people can perform and individuals can cooperate on the
attainment of group goals.”
 According to Lawrence:- “Management is the accomplishment of results through
the efforts of other people.”
 NATURE OF MANAGEMENT
 Management is a purposeful activity.
 Management is concerned with the efforts of a group.
 Management applies economic principles.
 Management involves decision making.
 Management is getting things done through others.
 Management is an integrating process.
 Management co-ordinates all activities and resources.
 Management is a universal activity.
 Management is dynamic not rigid.
 IMPORTANCE OF MANAGEMENT
 Management is goal oriented
 Management is associated with group efforts
 Management is intangible
 Management is situational
 Management is universal
 Management is concern with people
 Management is the combination of art, science and profession
 Management ensures optimum utilization of resources
 Management establishes sound organization
 Management helps in cost reduction
 FUNCTIONS OF MANAGEMENT
 Planning
 Organizing
 Staffing
 Directing
 Communication
 Controlling
 Motivation
 Decision Making
 Forecasting
 FUNCTIONS OF MANAGEMENT
 Planning: It includes forecasting, formation of objectives, policies,
programmes, producer and budget. It is a function of determining the
methods or path of obtaining there objectives. It determines in advance what
should be done, why should be done, when, where, how should be done. This
is done not only for organization as a whole but also for every division, section
and department. Planning is thinking before doing.
 Organizing: It includes departmentation, delegation of authority, fixing of
responsibility and establishment of relationship. It is a function of providing
every thing useful to the business organization. There are certain resources
which are mobilize i.e. man, machine, material, money, but still there are
certain limitations on these resources. A manager has to design and develop
a structure of various relations. This structure, results from identification and
grouping work, delegation of authority and responsibility and establishing
 FUNCTIONS OF MANAGEMENT

 Staffing:- It includes man power planning, recruitment, selection, placement and

training. People are basically responsible for the progress of the organization.
Right man should be employed for right job. It also involved training of personnel
and proper remuneration.
 Directing:- It includes decision making, supervising, guidance etc. It reflects
providing dynamic leadership. When the manager performs these functions, he
issues orders and instructions to supervisors. It also implies the creation of a
favorable work, environment motivation, managing managers, managing workers
and managing work environment.
 Communication:- Communication provides the vital link in any organization.
Every successful manager has to develop an effective system of communication.
Communication means exchange of facts, ideas and information between two or
 FUNCTIONS OF MANAGEMENT

 Controlling:- It is a process of checking actual performance against standard

performance. If there is any difference or deviation then these differences should be
detected and necessary steps should be taken. It involves three elements: 1.
Establishing standard of performance. 2. Measuring actual performance with
establishment. 3. Finding out reasons for deviation.
 Motivation:- In a well organization unforeseen problems are created. It becomes
necessary for the workers to have a leader, to whom they can consult for the guidance.
One must help the worker to solve their problems. The manager is the leader for them.
So he should accept the problems, should appreciate the workers for the work done by
them. He has to act as a well motivation source for he workers.
 Decision Making:- It is the process in which a lot of actions are involved and lot of
alternatives are available. A manager has to choose right alternative for attainment of
his goals. There are many decisions which include marketing decision, cost price
 FUNCTIONS OF MANAGEMENT
 Forecasting:- Correct sales forecasting is essential for
manufacturing organization. This helps in production, by making
available right workers and right material at right place and at
right time. It also helps manager for purchasing of raw materials,
equipments and labours.
 Many times production is made in advance to meet future
demands and forecasting is essential because of short supply of
raw material, lack of proper control, to fix up sales targets and to
meet future financial needs.
 It also helps to give ideas about expansion of business; and for
giving training to the personnel of the organization.
 MANAGEMENT IS AN ART

Management is an art because:

 It is creative in nature.
 It involves use of skill.
 It involves use of technical know how.
 It is directed towards getting results.
 It is personalized.
 MANAGEMENT IS A SCIENCE

Management falls in the area of social sciences as it deals with human beings
and it is very difficult to predict their behavior accurately.
It is a flexible science & that is why its theories and principles may produce
different results at different times and therefore it is a behavioral science.
Ernest Dale has called it as a Soft Science.
Science is characterized by following main features which are also visible in
management:
 Universally acceptance principles
 Experimentation & Observation
 Cause & Effect Relationship
 Test of Validity & Predictability
 MANAGEMENT IS A PROFESSION
Growing size of business units, separation of ownership from management,
growing competition etc. have led to an increased demand for
professionally qualified managers. The task of manager has been quite
specialized and several of the below mentioned attributes of a professional
are also visible in Corporate Managers.
 Systematic body of knowledge e.g. CA, Doctors, Lawyers, Architects etc
 Formal Education, Training & Specialization
 Social Responsibility/ Obligations, Code of Conduct
 Practice from Independent Office with license and charging consultancy
fees from the clients
Though Management fulfills several essentials of a profession, even then it
is not a full fledged profession.
 LEVELS OF MANAGEMENT

There are three levels of management:

 Top level management comprising of CEO, MD, BOD

 Middle level management comprising of Departmental / Branch Heads/ Sr.

officers

 Lower level management comprising of Supervisors/Foremen/ Junior officers

Administrative level consists of top or upper level of management. Operative

level consists of middle level and lower management. Lower level
management includes supervisor and foreman.

The level of management depends upon the size of the organization.

LEVELS OF MANAGEMENT
ROLES & RESPONSIBILITIES OF MANAGER
 INTERPERSONAL ROLES
 These cover the relationships that a manager has to have with
others. The three roles within this category are figurehead, leader
and liaison.
 A manager has to perform some duties as a figurehead. He may
receive the guests from outside or preside over a social function of
employees. He may have to sign some legal documents as head of
the organization. These are the roles played as figurehead.
 He has also to act as leader when he has to sort out the activities of
subordinates. He has not only to motivate the employees but is also
involved in hiring, firing and discipline employees.
 The third role in interpersonal roles is of liaisoning. He has to
contact outside agencies for collecting business related information.
 INFORMATIONAL ROLES
 Managers must collect, disseminate and transmit information and these
activities have three corresponding informational roles: monitor,
disseminator and spokesperson.
 All managers are required to perform informational roles. They have to
monitor and collect information from outside organizations and
institutions in market.
 Managers also play the role of disseminators when they supply
information to subordinates in the organization. This information is factual
as well as with interpretations for the benefit of users.
 A manager acts as a spokesperson when he represents the organization
to outsiders.
 Managers need not collect or disseminate every item themselves, but must
retain authority and integrity by ensuring the information they handle is
 DECISIONAL ROLES
 Mintzberg argues that making decisions is the most crucial part of any
managerial activity. He identifies four roles which are based on different
types of decisions; namely, entrepreneur, disturbance handler,
resource allocator and negotiator.
 According to Mintzberg a manager initiates and oversees new projects
for the improvement of organizational performance, this is the
entrepreneurial role played by him.
 As disturbance handler, manager takes corrective actions in
response to previously unforeseen problems.
 He also acts as resource allocator when he assigns and monitors the
allocation of human, physical, and monetary resources.
 He acts as a negotiator when he discusses and bargains with other
 KEY MANAGERIAL SKILLS

 Conceptual Skills  Computer Skills

 Diagnostic and Analytical  Interpersonal and
Skills Communication Skills
 Human Relation Skills  Critical Thinking Skills
 Administrative Skills  Decision Making Skills
 Technical Skills  Problem Solving Skills
 KEY MANAGERIAL SKILLS
1. Conceptual Skills:- Conceptual skills are the abilities to think about the creative
terms understand and visualize the future, to organize and translate observation into
ideas & concepts. Conceptual skills are essential to identify and diagnose the
problems. This will helpful in determining the goals.
2. Analytical Skills:- [Decision making] Analytical skills mean ability to work out a
complex problem or situation into component. Analytical skills are required for solving
problems and decision making. This is also helpful for evaluation of performance and
arriving at judgment.
3. Human Relation Skills:- Human relation skills represent the ability to understand
the behavior of people, their problems, their needs, working conditions and motivation
to people. These skills are essential in directing the people and for better coordination.
4. Administrative Skills:- It involves the implementation of plan and use of available
resources to get the desired output that is profit and to regularize a performance in
orderly manner. It is also helpful in co-ordination of activities.
 KEY MANAGERIAL SKILLS

5. Technical Skills:- These skills are essential for first line managers. He requires
knowledge of a job, ability to apply the methods and techniques of job. He is responsible for
providing technical guidance and instructions to subordinates.
6. Computer Skills:- Computer knowledge is essential for today’s manager i.e.
knowledge of hardware & software. Hardware is technical term & software is ability to adopt
the system in an organization to attempt goals. In modern days computer is widely used in
organization. Hence today’s’ manager should possess the knowledge of computer. This is
helpful in decision making. It also helps to increase the productivity in the organization.
7. Communication Skills:- Communication is systematic process of telling, listing and
understanding. This skill requires the ability of listening and speaking in an effective
manner. The manager is responsible for getting the things done by others. He should be
expert in oral and written communication. Communication skill is essential for getting
success. It is depend upon the manager who achieves the results with efforts of others. Co-
ordination can be attained with the help of proper communication.
 DEVELOPMENT OF MANAGEMENT THOUGHTS

The Concept of Evolution of Management Thoughts

To understand the entire concept of evolution of the management thought, the topic is
divided into 4 major stages, which are as follows:
 Pre-scientific management era (before 1880)

 Classical management era (1880-1930)

 Neo-classical management era ( or behavior approach) (1930-1950)

 Modern management era (1950-onwards)

 DEVELOPMENT OF MANAGEMENT THOUGHTS

Pre-Scientific Management Period

As the industrial revolution occurred in the 18th century, there was a
huge impact on management. The scenario changed the method of raising
capitals, organizing labor, and goods’ production for the individuals and
businesses. Entrepreneurs then had access to production factors like
land, labor, and capital. The final step was only to make some effort to
combine these factors to achieve the target successfully.
But, after the industrial revolution, the newer dimension taken by
management is because of the involvement of certain notable
personalities who introduced some effective ideas and approaches
for giving management an acceptable and precise direction. Here is a
brief on some of the personalities and their theories:
 DEVELOPMENT OF MANAGEMENT THOUGHTS

Professor Charles Babbage of United Kingdom (1791 to 1871)

Prof. Babbage (Father of Computer, 1822)was a renowned Mathematics
Professor and Scientist at Cambridge University. He discovered that
manufacturers rely on guessing and suggesting and advised them for
utilizing science and mathematics to be more productive and accurate.
Robert Owens of United Kingdom (1771 to 1858)
Sir Robert is often regarded as father of British Socialism as his approach
focuses on employee welfare. He also introduced cooperate movement and
trade unionism. He mainly believed that employee welfare might determine the
performance to a larger extent. Sir Robert also encouraged the workers’
training, children’s education, ensuring canteens in the workplaces, shorter
working durations, and others.
 DEVELOPMENT OF MANAGEMENT THOUGHTS

The Classical Theory: Robert Owens, Charles Babbage, and other prominent personalities are
regarded as management’s pioneers. However, their contribution to the evolution of management
is lower. Further, by the last decade of the 19th century, the science of management began, and with
it, some professionals like H. L. Grant, F. W. Taylor, Emerson, and others entered for the
establishment of scientific management. Classical Management includes Scientific Management
School, Administration Management School, and Bureaucracy Management.
Further, during the classical period, management thought focused on standardization, job
content, labor division, and scientific approaches for the organization. It also related closely
to the industrial revolution and the rise of large-scale enterprises.
The Bureaucratic Model: Max Weber, a German sociologist, proposed the bureaucratic model. This
includes a system of labour division, rules, authority hierarchy, and employees’ placement
based on their technical capabilities.
The Neo-Classical Theory: This duration of the evolution of management thought is a better
version of classical theory. It is a modified version of classical theory with several improvements.
The classical theory focused mainly on the areas of job including physical resources and their
management, but Neoclassical theory focuses on employee relationships in the work ecosystem.
 DEVELOPMENT OF MANAGEMENT THOUGHTS

Max Webber (1864-1920) (Bureaucratic Model):- He was the chief exponent of the
Bureaucratic model. He emphasized on the recognition and exercise of authority is the
fundamental question. For answering this question he has classified authority structures
into three categories. They are Charismatic, Traditional and Bureaucratic.
A Charismatic leaders authority is expected by virtue of some exceptional innate
qualities.
The authority which flows from generation to generation or hereditary is called Traditional
authority.
The authority which comes from the position in the organization is called Bureaucratic
authority. This authority will have a clearly defined set of rules, procedures and roles.
This model includes the following: 1) There is clearly separation between superior and
subordinate. 2) There is a division of labour based upon competence and functional
specialization. 3) There is a clear divorce between personal and official matters. 4) There is a
system of rules, regulations and procedures. 5) There is a hierarchy in positions based on legal
authority and power.
 DEVELOPMENT OF MANAGEMENT THOUGHTS

Human Relations Movement:- This approach deals with the factors which encourage higher
performance on the part of workers. The productivity can be increased in the organization
by improving the working conditions, lowering of hours of work, by establishing social relations
among managers. The contributions of some thinkers in this area are discussed here:
Elton Mayo (1880-1949):- An Australian by birth, he was a professor of industrial research
at the Harvard Graduate School of Business Studies. Elton Mayo and his associates contributed
much to this approach. Mayo is called as father of human relations approach. He is
known for his work which is commonly referred as the Hawthorne studies. These studies
conducted to study the relationship between worker’s output and physical conditions in the
organization. This study revealed that an organization is not only a formal arrangement of men
and functions but also a social system which can be operated successfully only with the application
of the principles of psychology and other behaviour sciences. He observed that the
performance of workers in the organization can be improved by considering the following
factors: (1) Less restrictive methods of supervision (2) giving independence to workers (3)
allowing the formation of small cohesive sub-groups of the workers (4) creating good conditions
to improve themselves and (5) a good cooperation between management and workers.
 DEVELOPMENT OF MANAGEMENT THOUGHTS

Behavioral Sciences Movement:- Many sociologists and

psychologists like Maslow, Douglas McGregor, Resins Likert, Keith
Davis, Chester Bernard etc., have made contributions to the
development of this approach. This approach has concentrated on inter-
personal roles and responsibilities.
The basic features of this approach are:
(1) An organization is a socio-technical system.
(2) There should the relationship between organizational goals and
human needs
(3) Many factors will influence inter-personal and group behavior of
people in the organization
 MODERN MANAGEMENT THEORIES

QUANTITATIVE APPROACH OR MATHEMATICAL APPROACH

It is also known as Management Science approach or decision theory
approach. It was developed by W.C. Churchman and others. It focused on
use of mathematical and statistical techniques in management. It also
focused on finding right answers to management problems.
The basic features of this approach are :
(1) Management is a series of decision-making
(2) Mathematical models can be developed by quantifying various variables of
the problems
(3) Mathematical symbols can be used to describe managerial problems
(4) Organizations exist for the achievement of specific and measurable
economic goals.
 MODERN MANAGEMENT THEORIES

SYSTEM APPROACH by Ludwig Von Bertalanffy

This approach is based on the generalization that an organization is a
system and its components are inter-related and inter-dependent.
The effectiveness of the system mainly depends upon the inter
dependence and inter-relatedness of the various sub systems. The
features of this approach are:
(1) An organization is a system consisting of several sub-systems
(2) All sub-systems are mutually related to each other
(3) All sub-systems should be studied in their inter-relationship rather
than in isolation from each other
(4) The organization is responsive to environment effect.
 MODERN MANAGEMENT THEORIES

CONTINGENCY OR SITUATIONAL APPROACH

This approach was developed by J.W. Lorsch and P.R. Lawrence. This is
new approach to management. The basic essence of this approach that
organizations have to cope with different situations in different ways. So
managers should develop variable methods, tools and action plans as per the
required situation.
Features:-
(1) Management is entirely situational so the application and effectiveness
of any technique is contingent on the situations.
(2) Policies and procedures should be according to environmental conditions
(3) Managers should understand that there is no one best way to manage.
They must not consider management principles and techniques universal.
 PRINCIPLES OF SCIENTIFIC MANAGEMENT

1. Science, not the Rule of Thumb-

 This rule focuses on increasing the efficiency of an organisation through
scientific analysis of work and not with the ‘Rule of Thumb’ method. Taylor
believed that even a small activity like loading paper sheets into boxcars can be
planned scientifically. This will save time and also human energy. This decision should
be based on scientific analysis and cause and effect relationships rather than ‘Rule of
Thumb’ where the decision is taken according to the manager’s personal judgement.
2. Harmony, Not Discord-
 Taylor indicated and believed that the relationship between the workers and
management should be cordial and completely harmonious. Difference
between the two will never be beneficial to either side. Management and workers
should acknowledge and understand each other’s importance. Taylor also suggested
the mental revolution for both management and workers to achieve total harmony.
 PRINCIPLES OF SCIENTIFIC MANAGEMENT

3. Cooperation, not Individualism-

 It is similar to ‘Harmony, not discord’ and believes in mutual
collaboration between workers and the management. Managers and
workers should have mutual cooperation and confidence and a sense of
goodwill. The main purpose is to substitute internal competition with
cooperation.
4. Development of Every Person to his Greatest Efficiency-
 The effectiveness of a company also relies on the abilities and skills of
its employees. Thus, implementing training, learning best practices
and technology, is the scientific approach to brush up the employee skill.
To assure that the training is given to the right employee, the right steps
should be taken at the time of selection and recruiting candidates based on
 PRINCIPLES OF SCIENTIFIC MANAGEMENT
1. Separation of Planning & Doing:- Before Taylor’s scientific management a
worker used to plan about his work & instruments necessary for that. Supervisors’
job was to see how the workers were performing. This creates a lot of problems. So
Taylor has separated planning & doing authority.
2. Functional Foremanship:- Separation of planning from doing resulted into
development of supervision system. In this system 8 persons were engaged, out of
that 4 persons were engaged in planning department. They are time & cost clerk,
routine clerk, instruction card clerk & disciplinarian. In production process 4
personnel were engaged, they are speed boss, repair boss, supervisor & gang boss.
3. Job Analysis:- It is related with finding out best way of doing. It means that least
movements in doing job. It will lead to complete production in less time & lesser
cost. It includes:-
A) Time Study:- It means determining time required to complete a job in a
 PRINCIPLES OF SCIENTIFIC MANAGEMENT

B) Motion study:- It means study of movement while performing a job i.e.

elimination of wasteful movement in performing a job, only necessary movements
are engaged.
C) Fatigue Study:- It shows the amount & frequency of rest required, while
completing the work. After certain period of time workers feel fatigue & can’t work
with full capacity. Therefore they require rest in between. When rest is allowed they
start working with full capacity.
D) Standardization:- As far as possible standardization should be maintained in
respect of instruments & tools, period of work, amount of work, working conditions,
cost of production etc. these all things are fixed in advance on the basis of job
analysis.
E) Scientific Selection & Training of Workers:- Taylor has been suggested that
worker should be selected on scientific basis taking into account their education,
 PRINCIPLES OF SCIENTIFIC MANAGEMENT
F) Financial Incentives:- Financial incentives help to motivate workers in maximum
efforts. Higher wages lead to increase in efforts. He applied differential piece rate
system. According to him workers have to complete the work within specified time and
then only he will get wages at higher rate per piece & one does not complete a job
gets a lower rate. Wages should be based on individual performance & not on the
position occupied.
G) Economy:- Techniques of cost estimated & control should be adopted. Waste
should be controlled properly. Profit will be achieved with elimination of wastage. He
explained how resources are wasted.
H) Mental Revolution:- Scientific management depends upon mutual co-operation
between workers & management. Taylor say’s great revolution takes place in the
mental attitude of two parties under scientific management. He has given systematic
design of work. Labour management, co-operation required a complete mental change
on the part of both parties. The workers have specific duties towards management &
 CRITICISM

 Taylor’s scientific management was related to production management and

neglected marketing, financial and decision making aspects completely.
 Scientific management is expensive and difficult for small scale organization as
it involves research, experiment & analysis.
 It was also argued that devices of work analysis, time study, motion & fatigue study
can’t be applied in the practical life.
 The idea of best way of doing a job was also criticized as everyone has his own
natural style of work & maximum efficiency will be attained by the group & not by
individual worker.
 Wages of workers are not increased in direct proportion of productivity,
leading to exploitation of workers.
 People are not ready to use the word ‘scientific’ as management is a social
 ADMINISTRATIVE MANAGEMENT BY HENRY FAYOL

Fayol found that activities of industries should be divided into

6 group’s i.e.
 Technical (production)
 Commercial (buying, selling and exchange)
 Financial (optimum use of capital)
 Security (protection of property)
 Accounting (including statistics)
 Managerial (all functions of management)
 FAYOL’S 14 PRINCIPLES OF MANAGEMENT
 1) Division of Work(specialization):- A business activity carried out by small scale may be
managed & controlled by proprietor. As business expands, activities grow & need more people
to control those activities. Organization is jointly managed by a group of person. Fayol has
advocated division of work to take the advantage of specialization.
 2) Authority & Responsibility:- Authority represents a power enjoyed by a person of his
position in the organization. It may be for taking decision, spending money or in many other
ways. Responsibility is obligation created upon a person for the use of authority, which is
entrusted to him. These two terms are co-related. Fayol suggested that there must be balance
between authority & responsibility.
 3) Discipline:- All the personnel serving in an organization must follow discipline. Discipline
is obedience, application of behavior & energy shown by an employee. Discipline may be self
employed or command discipline. Discipline can be obtained lower remuneration, dismissal,
demotion of position. While applying such circumstances proper proof should be taken into
 FAYOL’S 14 PRINCIPLES OF MANAGEMENT
 4) Unity of Command:- Each employee should receive order from single
superior. In the organization structure it should be clearly stated that who is
responsible to whom? & who should receive order from whom?
 5) Unity of Direction:- According to this principle each group of activity with
some objective must have one head. There is a difference between unity of
command & unity of direction. Direction is concerned with planning & unity of
command is concerned with reporting.
 6) Subordination of individual interest to general interest:- In an
organization individual interest should not be given any importance. The manager
should always keep organizational interest before him & should determine such
policies which will be beneficial to entire group & not just few personnel. It is
responsibility to management to create common understanding between all.
 FAYOL’S 14 PRINCIPLES OF MANAGEMENT
 7) Remuneration:- Every employee must be paid an adequate and fair remuneration for his
services. Personal factors such as demand for labor, position of the labor & competition as well
as cost of living index should be taken into account. General Economic Conditions should be
considered while deciding the remuneration of an employee. In any case exploitation of the
worker should be avoided.
 8) Order:- Fayol has suggested that at one position one person should be appointed. Each
person must have appropriated position in organization.
 9) Centralization:- It means the extent to which authority should be concentrated in the hands
of top level management. It may be centralized or decentralized. There are limitations of
complete centralization & complete decentralization. Therefore, there should be proper balance
between this two.
 10) Scalar Chain: - (Straight line & Command) It shows the straight line of authority from
highest level to lower level for communication. Scalar chain is the extract of organization chart &
 FAYOL’S 14 PRINCIPLES OF MANAGEMENT
 11) Stability of Tenure:- Effort must be made to keep the employee stuck to organization
so that the labour turnover can be low by keeping check on administrative cost of
organization. Care must be taken to satisfy the staff otherwise there will be bad effect & loss
of labour.
 12) Equity:- Equity is combination of justice & kindness; equity in treatment & behavior is
liked by everyone & it brings loyalty in the organization.
 13) Initiative:- Within the limits of authority & discipline manager should encourage their
employees for taking initiative. Initiative is concern with thinking. Thinking leads to
execution of plan. Initiative increases energy on the part of human being.
 14) Espirit De Corps:- This is a French term. It means manager is like a captain of a team
who is responsible to maintain high moral between all workers. It may be possible by
effective communication among all persons in organization. Participation of workers in the
process of decision making is important.
 COMPARISON CHART –

COMPARISON BETWEEN APPROACHES OF TAYLOR & FAYOL

Taylor’s Contribution Fayol’s Contribution

1. F.W. Taylor, father of Scientific Management 1. Henry Fayol, father of Functional Management
who developed four principles of management, who gave 14 principles of management for
for increasing overall productivity. improving overall administration.
2. [Link] stressed on the working of 2. Henry Fayol emphasized the working of top
production level management. level management.
3. Taylor’s,management theory applies to a 3. Fayol’s management theory has universal
limited number of organizations only. applicability.
4. Taylor’s
principles rely on observation and 4. The basis of formation of Fayol’s theory is the
experimentation. personal experience.
5. Taylor focused on production and engineering. 5. Fayol is oriented towards managerial function.
6. The system of wage payment determined by 6. Fayol stressed on sharing of profits with
Taylor is differential piece rate system. managers.
7. The approach of Taylor is termed as Engineer’s 7. In contrast, Fayol’s approach is accepted as
approach. manager’s approach.
 THEORY OF BUREAUCRACY BY WEBER
 Max Weber was a German sociologist. He contributed the theory of bureaucracy to management
thought. He considered bureaucracy as a universal social phenomenon. He used the word
bureaucracy to refer to a specific kind of administrative organisation. He is of the opinion that
bureaucracy is the most efficient form of organisation because it is handled by experts with
experience, qualification and competence. They are expected to perform in a disciplined way and
achieve organisational objectives.
 Weber has identified three types of legitimate authority. They are as follows

(a) Rational-Legal Authority: In this case the obedience to authority is established in all
organisations due to a legally established position or rank within the organisation.
(b) Traditional Authority: In this case obedience to authority is established as the person belongs
to a certain class or occupies a position traditionally recognized as possessing authority like a royal
family. Leaders are not chosen due to competence.
(c) Charismatic Authority: Here obedience to authority is developed on the followers’ belief that a
person has some special power or appeal. This authority is too emotional and irrational.
Weber’s theory has recognized only rational-legal authority as the most important type in
organisation.
 THEORY OF BUREAUCRACY BY WEBER
 According to Weber’s the characteristics of bureaucracy are:
 (i) There is high degree of work at both administrative and operative
levels of an organisation. This results in specialization of work.
 (ii) Bureaucratic structure is hierarchical in nature. It is like a
pyramid in which quantity of authority increases as one moves up the
ladder in the organisation.
 (iii) Thirdly, hierarchy of authority in the bureaucratic organisation
ensures unity of command throughout the organisation.
 (iv) The top administration establishes clearly the rules,
regulations and procedures. This results in standardization of
performance. The performance serves as receptacles of past learning
and they protect the incumbents and ensure quality of treatment.
 THEORY OF BUREAUCRACY BY WEBER
 (v) The essence of bureaucracy is total depersonalization which
guides the employee’s rules and regulations and ensures friction-
free and unbiased performance.
 (vi) The terms and conditions of employment is well laid and
well established. So this improves the morale of employees.
 (vii)In bureaucratic organisations the selection is based on
technical competence. Similarly the promotion is based on
qualification and performance.
 (viii) The filing system in bureaucratic organisation is excellent.
The decisions and activities are formally recorded and preserved
safely for future reference. The official records are considered as the
encyclopedia of the various activities of the organisation and serve
as the memory of the organisation.
 HAWTHORNE EXPERIMENT BY ELTON
MAYO
 Hawthorne Experiment started in 1924 at the Western Electric
Company, Chicago which were led by Elton Mayo, Fritz
Roethlisberger and a group of researchers of the Harvard Business
School. The experiment lasted up to 1932.
 The Hawthorne Experiment brought out that the productivity of the
employees is not the function of only physical conditions of work and
money wages paid to them. Productivity of employees depends heavily
upon the satisfaction of the employees in their work situation.
 Mayo’s idea was that logical factors were far less important than emotional
factors in determining productivity efficiency. Furthermore, of all the human
factors influencing employee behavior, the most powerful were those
emanating from the worker’s participation in social groups.
 The Hawthorne experiment consists of four parts. These parts are briefly
 HAWTHORNE EXPERIMENT BY ELTON
MAYO
1. Illumination Experiment:
 This experiment was conducted to establish relationship between output
and illumination.
 When the intensity of light was increased, the output also increased.
 The output showed an upward trend even when the illumination was
gradually brought down to the normal level.
 Therefore, it was concluded that there is no consistent relationship between
output of workers and illumination in the factory.
 There must be some other factor which affected productivity.
 HAWTHORNE EXPERIMENT BY ELTON
2.
MAYO
Relay Assembly Test Room Experiment:
 This phase aimed at knowing not only the impact of illumination on
production but also other factors like length of the working day, rest hours,
and other physical conditions. In this experiment, a small homogeneous
work-group of six girls was constituted. These girls were friendly to each
other and were asked to work in a very informal atmosphere under the
supervision of a researcher.
 Productivity and morale increased considerably during the period of the
experiment. Productivity went on increasing and stabilized at a high level
even when all the improvements were taken away and the pre-test
conditions were reintroduced.
 The researchers concluded that socio-psychological factors such as feeling
of being important, recognition, attention, participation, cohesive work-
 HAWTHORNE EXPERIMENT BY ELTON
MAYO
3. Mass Interview Programme:
 The objective of this programme was to make a systematic study of the
employees attitudes which would reveal the meaning which their “working
situation” has for them. The researchers interviewed a large number of
workers with regard to their opinions on work, working conditions and
supervision.
 Initially, a direct approach was used whereby interviews asked questions
considered important by managers and researchers. The researchers observed
that the replies of the workmen were guarded.
 Therefore, this approach was replaced by an indirect technique, where the
interviewer simply listened to what the workmen had to say.
 The findings confirmed the importance of social factors at work in the total
 HAWTHORNE EXPERIMENT BY ELTON
MAYO
4. Bank Wiring Test Room Experiment:
 The experiment was conducted to study a group of workers under conditions which
were as close as possible to normal. This group comprised of 14 workers. After the
experiment, the production records of this group were compared with their earlier
production records. It was observed that the group evolved its own production norms
for each individual worker, which was made lower than those set by the management.
Because of this, workers would produce only that much, thereby defeating the
incentive system. Those workers who tried to produce more than the group norms
were isolated, harassed or punished by the group. The findings of the study are:-
• Each individual was restricting output.
• The group had its own “unofficial” standards of performance.
• Individual output remained fairly constant over a period of time.
• Informal groups play an important role in the working of an organization.
 FINDINGS OF HAWTHORNE EXPERIMENT
 1. Lighting conditions have a limited effect on productivity. One of the initial aims of the experiments was to
investigate the effects of lighting on employee productivity. However, the researchers found that changing the
lighting conditions had little impact on productivity. This was surprising, as it was widely believed at the time
that better lighting would lead to increased productivity.
 2. Social factors are important in the workplace. The researchers found that social factors, such as the level of
supervision and the relationships between workers, had a significant impact on productivity. In particular,
workers who felt that their supervisors cared about them and were interested in their well-being were more
productive.
 3. The Hawthorne Effect is real. The researchers found that productivity increased not just when lighting
conditions were changed, but also when other working conditions were altered. This suggested that the
workers were responding to the fact that they were being observed, rather than any specific changes in their
working environment.
 4. The Hawthorne Effect can have negative consequences. While the Hawthorne Effect can be a useful tool for
improving productivity, it can also have negative consequences. For example, workers may feel that they are
being spied on or that their privacy is being invaded, leading to resentment and decreased productivity.
 Overall, the findings of the Hawthorne experiments highlight the importance of social factors in the workplace
and the role that the Hawthorne Effect can play in shaping behavior. While the experiments were conducted
almost a century ago, their insights continue to be relevant to contemporary organizations and managers.