UNIT 1

Definition of commerce: Activities that relate to buying and selling of goods and services.

Exchange of goods or services for money or in kind, usually on a scale large enough to
require transportation from place to place or across city, state, or national boundaries.

Definition of management : management is getting things done through others.

Management in businesses and organizations is the function that coordinates the efforts of
people to accomplish goals and objectives by using available resources efficiently and
effectively.
Management includes planning, organizing, staffing, leading or directing,
and controlling an organization to accomplish the goal or target. Resourcing encompasses the
deployment and manipulation of human
resources, financial resources, technological resources, and natural resources. Management is
also an academic discipline, a social science whose objective is to study social organization.
Definition of economics : science concerned with the production, distribution and
consumption of goods and services.

Economy in general the art of providing for all the wants of a family, [so the science of political
economy] seeks to secure a certain fund of subsistence for all the inhabitants, to obviate every
circumstance which may render it precarious; to provide everything necessary for supplying the
wants of the society, and to employ the inhabitants ... in such manner as naturally to create
reciprocal relations and dependencies between them, so as to supply one another with
reciprocal wants.

Exchange of goods or services for money or in kind, usually on a scale large enough to require
transportation from place to place or across city, state, or national boundaries. Commerce is
the activity of buying and selling of goods and services, especially on a large scale or quantity.
The system includes legal, economic, political, social, cultural and technological systems that
are in operation in any country or internationally. Thus, commerce is a system or an
environment that affects the business prospects of economies.[not verified in body It can also
be defined as a component of business which includes all activities, functions and institutions
involved in transferring goods from producers to consumers. Some commentators trace the
origins of commerce to the very start of communication in prehistoric times. Apart from
traditional self-sufficiency, trading became a principal facility of prehistoric people, who
bartered what they had for goods and services from each other. Historian Peter Watson dates
the history of long-distance commerce from circa 150,000 years ago.

In historic times, the introduction of currency as a standardized money, facilitated a wider

exchange of goods and services. Numismatists have collections of these monetary tokens,
which include coins from some Ancient World large-scale societies, although initial usage
involved unmarked lumps of precious metal. The circulation of a standardized currency
provides a method of overcoming the major disadvantage to commerce through use of a barter
system, the "double coincidence of wants" necessary for barter trades to occur. For example, if
a man (or woman) who makes pots for a living needs a new house, he/she may wish to hire
someone to build it for him/her. But he/she cannot make an equivalent number of pots to
equal this service done for him/her, because even if the builder could build the house, the
builder might not want many or any pots. Currency solved this problem by allowing a society as
a whole to assign values[citation needed] and thus to collect goods and services effectively and
to store them for later use, or to split them among several providers.

During the Middle Ages, commerce developed in Europe by trading luxury goods at trade fairs.
Wealth became converted into movable wealth or capital. Banking systems developed where
money on account was transferred across national boundaries. Hand to hand markets became
a feature of town life, and were regulated by town authorities. Today commerce includes as a
subset a complex system of companies which try to maximize their profits by offering products
and services to the market (which consists both of individuals and other companies) at the
lowest production cost. A system of international trade has helped to develop the world
economy but, in combination with bilateral or multilateral agreements to lower tariffs or to
achieve free trade, has sometimes harmed third-world markets for local products, it has been
argued.

Economics vs Commerce

Economist is concerned with the economic system and its operation in the country; whereas,
the transfer of the results of production from producer to the consumer would be the key
concern in commerce. Commerce has been part of history. From trading using barter system to
selling and buying using currency, the activity of exchange of items of value between persons
and companies has been in existence. When a person trades in a country, the trader will be
concerned on the changes in the economic system of the country as this determines to a
certain extent whether the business achieves success or failure.

Economics

Being derived from an ancient Greek word, Economics is the social science analyzing
production, distribution and consumption of goods and services. It could further be stated that
economics is the study of the the forces of supply and demand and how that allocate scarce
resources. Economics can be subdivided broadly into microeconomics and macroeconomics.
Microeconomics study the behaviour of firms, consumers, and the role of government;
macroeconomics is the study of inflation, unemployment, industrial production, and the role of
the government in those. Resource availability and utilization are important in understanding
economics. As resources are limited it is essential to utilize these efficiently and effectively, and
the study of economics is based on this principle.

Commerce

Commerce could be illustrated as the activity of buying and selling, especially on a large scale
that makes up the business environment. With the traditional trading (barter system) to the
introduction of currency, which still makes exchange of goods and service possible, all revolve
around the buying and selling activity. In today’s world, commerce has a complex system,
where companies offer products and services at the lowest production cost and try to maximize
their profit. Thus, commerce is the exchange of items of value. The same principle is used in e-
commerce, where buying and selling of goods and services on the internet/world wide web.

What is the difference between Economics and Commerce?

Although both share similarities, the following differences could be highlighted.

• Economics is a broader study about how individuals, businesses and societies use the
resources, whereas Commerce involves the study of goods sold by producers to the consumers.

• Economics goes on to study the impact of businesses, government legislation, banks etc., as
opposed to Commerce, which doesn’t have a wide area of study.

• Commerce detains its scope to business, whereas economics explores not only the business
but also pubic policies and division of labour.

• Economics has a broad number of fields and areas to specialize in compared to commerce.
• Commerce examines trade and exchange, while economics examines this and extends its
study to production and consumption.

Conclusion

Economics and Commerce might have their differences, but in overall, as a trader is influenced
by the economic conditions in the country, commerce is affected by economics. Understanding
the economic forces helps to achieve a high return for the trader. Hence, it could be said that
commerce falls within the scope of economics but economics extends beyond commerce.

The Long-Run Relationship Between Commerce And Sustainable Development In Baltic And
Central And Eastern European Countries.

The paper investigates the long-run relationship between commerce intensity and a measure of
sustainable development for ten ex-communist countries that have recently joined the EU. The
originality of this paper consists in applying the co-integration testing techniques for panel data
regarding commerce and the “authentic” savings rate, an indicator of sustainable development,
which determines the productive base that will be inherited by future generations. Econometric
tests suggest a negative long-run relationship between commerce intensity and sustainable
development. This result is in agreement with conclusions of other studies that have
documented, in the region, an economic growth fueled by the adoption of unsustainable
western consumption ideals, a low public consciousness about ecological values and weak
institutions dealing with environmental issues at both government and civil society level. The
negative correlation that was found could be a symptom for an evolution stage towards an
economic and social maturity where commerce expansion is synchronized with accumulation of
wealth that will be inherited by future generations.

Commerce and management:-

Business administration’s is inherently based on the foundation of commerce thought it draws

upon a number of other branches of knowledge and especially on management science,
mathematics, psychology and law among others. It might be said that the object of business
administration is to apply the knowledge of commerce to running the business. Business
administration and management. However is also sometimes distinguished from commerce in
the following ways.

1- if it is assumed that a manager will be concerned with policy formulation , and

determination of the directing phase of a business enterprise , then commerce graduates and
required to process

The data and analyse the refine the same for managerial decision making.
2- while the M.B.A. program can continue to lay stress on the development of managerial skills,
the masters course in commerce should give the students in indepth knowledge of the various
areas of management which will enable them to areas of management .

The purpose of commerce and management is to promote an understanding of the managers

within organizations and the way that management is applied to commerce. Commerce and
management properly connected can create a mechanism of cohesiveness that produces
positive results that far outweigh the negative impact of its present mismanagement. It is to the
benefit of nations to establish governmental agencies with their own policies responsible for
the promoting and managing of commerce to enhance economic growth and the standard of
living for their citizens. It is virtually impossible not to see the correlation of commerce and
management as without Rochelle R. Dean / 65 proper management of commerce the world is
left in a state of global meltdown as we are seeing today. Commerce is the conduct of trade
amongst economic agents. Generally, commerce refers to the exchange of goods, services or
something of value, between businesses or entities. Management is the organization and
coordination of the activities of a business in order to achieve defined objectives. According to
Drucker the term management refers to both a title within an organization and a set of
functional skills. Ideally both descriptors should be effectively combined in performances of
managers however many adopt a mind set of entitlement in the rank and demonstrate poor
functional skills. It is clear that with so many governmental agencies committed to the fostering
and promotion of commerce and economic growth, there exists weak links between the
management of these agencies. Therefore we must take a closer look at the correlation of
commerce and management.

IMPORTANCE OF COMMERCE AND MANAGEMENT

Commerce and management are essential to profitability and sustainability. It is to the benefit
of nations to establish governmental agencies with their own policies responsible for the
promoting and managing of commerce to enhance economic growth and the standard of living
for their citizens. It is fundamentally important to see the correlation of commerce and
management as without proper management of commerce the world is left in a state of global
meltdown. Commerce management is important because it is imperative to maintaining good
relationships with other nations. It allows the growth of globalization and produces positive
economics. Commerce and management are important to the economic activity of all human
beings within their nations. PROBLEMS WITH COMMERCE AND MANAGEMENT It is clear that
with so many governmental agencies committed to the fostering and promotion of commerce
and economic growth, a detachment exists within the management of these agencies. Research
conducted by English statesman Sir Thomas More in the 16th century found that,“The practice
of modern management originated from the study of low efficiency and failures of certain
enterprises and that management generally consists of the interlocking functions of creating
corporate policy and then organizing, planning, controlling and directing the resources of an
organization to achieve the purposes of that policy.” According to More’s theory, management
has been distinctly created for corporate entities as in most instances the policies of many
organizations are 66/ The Correlation Between Commerce and Management levied within the
range of administration. Administration is not management. Therefore we I can conclude that
the reason why commerce and management is failing immensely is due to the fact that it is
generally left within the parameters of the government or organizations who have no proper
management structure and leaving no controls for governments to effectively manage
economic stability within nations. There is no general framework [standardization] for
management as the structure of management varies depending on its corporate ladder which
leaves corporate governance to be better structured. Government agencies only see the need
to administer instead of being innovators and bringing new ideas to the table to bring about
economic growth, sustainability and prosperity and effectively managing these ideas. Instead
governments have concluded to administer while the corporate world dictates to them.
Governments administer and in this capacity there is no competition whereas management
consists of competitive analytical thinking. This is the reason that governments have difficulty
as it relates to commerce and management and corporate governance is the leader in growth,
productivity and wealth. This allows the private sector to demand authority and influence
decision making within nations or becoming pragmatic in the same right. As a result of the
administration as opposed to proper management of commerce and management the global
economy is in a state of duress and we find that governments have concluded to either wait on
market forces while others have become ruthless and very aggressive in their conquests for
economic power and sustainability while corporate governance continues to control and lend
itself to dominance. As corporate organizations effectively administer, manage, produce and
grow.

Development of commerce thought:-

Some commentators trace the origins of commerce to the very start of communication in
prehistoric times. Apart from traditional self-sufficiency, trading became a principal facility of
prehistoric people, who bartered what they had for goods and services from each other.
Historian Peter Watson dates the history of long-distance commerce from circa 150,000 years
ago. In historic times, the introduction of currency as a standardized money, facilitated a wider
exchange of goods and services. Numismatists have collections of these monetary tokens,
which include coins from some Ancient World large-scale societies, although initial usage
involved unmarked lumps of precious metal.

The circulation of a standardized currency provides a method of overcoming the major

disadvantage to commerce through use of a barter system, the "double coincidence of wants"
necessary for barter trades to occur. For example, if a man (or woman) who makes pots for a
living needs a new house, he/she may wish to hire someone to build it for him/her. But he/she
cannot make an equivalent number of pots to equal this service done for him/her, because
even if the builder could build the house, the builder might not want many or any pots.
Currency solved this problem by allowing a society as a whole to assign values[citation needed]
and thus to collect goods and services effectively and to store them for later use, or to split
them among several providers. During the Middle Ages, commerce developed in Europe by
trading luxury goods at trade fairs. Wealth became converted into movable wealth or capital.
Banking systems developed where money on account was transferred across national
boundaries. Hand to hand markets became a feature of town life, and were regulated by town
authorities.

Today commerce includes as a subset a complex system of companies which try to maximize
their profits by offering products and services to the market (which consists both of individuals
and other companies) at the lowest production cost. A system of international trade has helped
to develop the world economy but, in combination with bilateral or multilateral agreements to
lower tariffs or to achieve free trade, has sometimes harmed third-world markets for local
products, it has been argued.

Contributors to the development of Commerce.

F.W.Tailor

Henry Feyol

R.A.Simon

Maslow

Joseph A Schumpeter

Druker

Poeter

Hammer and Tom

Senge and Prahalad

INTRODUCTION OF MANAGEMENT:-

MANAGEMENT:- Art of getting things done through others

The organization and coordination of the activities of a business in order to achieve defined
objectives.

Management is often included as a factor of production along with‚ machines, materials, and
money. According to the management guru Peter Drucker (1909-2005), the basic task of
management includes both marketing and innovation. Practice of modern management
originates from the 16th century study of low-efficiency and failures of certain enterprises,
conducted by the English statesman Sir Thomas More (1478-1535).

Management is a universal phenomenon. It is a very popular and widely used term. All
organizations - business, political, cultural or social are involved in management because it is
the management which helps and directs the various efforts towards a definite purpose.
According to Harold Koontz, “Management is an art of getting things done through and with the
people in formally organized groups. It is an art of creating an environment in which people can
perform and individuals and can co-operate towards attainment of group goals”. According to
F.W. Taylor, “Management is an art of knowing what to do, when to do and see that it is done
in the best and cheapest way”.

Management is a purposive activity. It is something that directs group efforts towards the
attainment of certain pre - determined goals. It is the process of working with and through
others to effectively achieve the goals of the organization, by efficiently using limited resources
in the changing world. Of course, these goals may vary from one enterprise to another. E.g.: For
one enterprise it may be launching of new products by conducting market surveys and for other
it may be profit maximization by minimizing cost.

Management involves creating an internal environment: - It is the management which puts into
use the various factors of production. Therefore, it is the responsibility of management to
create such conditions which are conducive to maximum efforts so that people are able to
perform their task efficiently and effectively. It includes ensuring availability of raw materials,
determination of wages and salaries, formulation of rules & regulations etc.

Therefore, we can say that good management includes both being effective and efficient. Being
effective means doing the appropriate task i.e, fitting the square pegs in square holes and
round pegs in round holes. Being efficient means doing the task correctly, at least possible cost
with minimum wastage of resources.
Management can be defined in detail in following categories :

• Management as a Process

• Management as an Activity

• Management as a Discipline

• Management as a Group

• Management as a Science

• Management as an Art

• Management as a Profession

• Nature of management can be described as follows.

• Continuous Process: Management is a never ending process. It will remain the part
oforganization till the organization itself exists. Management is an unending process as
pastdecisions always carry their impact for the future course of action.

• Universal in Nature: Management is universal in nature i.e. it exists everywhere in

universewherever there is a human activity. The basic principles of management can be applied
any where whether they are business or non-business organization.

• Multidisciplinary: Management is basically multidisciplinary. Though management has

developed as a separate discipline it draws knowledge and concepts of various other streams
like sociology, psychology, economics, statistics etc. Management links ideas and concepts of all
these disciplines and uses them for good-self of the organization.

• Management is a group activity. Management is a vital part of group activity. As no

individual can satisfy all his needs himself, he unites with his co-workers and work together as
an organized group to achieve what he can not achieve individually.

• Management is goal oriented: Management is a goal oriented activity. It works to

achieve some predetermined objectives or goals which may be economic or social.

• Dynamic: Management is dynamic in nature i.e. techniques to mange business changes

itself over a period of time.
• System of authority: Authority is power to get the work done by others and compel
them to work systematically. Management can not perform in absence of authority. Authority
and responsibility depends upon position of manager in organization.

• Management is an art: Management is considered as art as both requires skills,

knowledge, experience and creativity for achievement of desired results.

• Management is Science. Management is considered as science. Science tells about the

causes and effects of applications and is based on some specific principles and procedures.
Management also uses some principles and specific methods. These are formed by continuous
observations.

Scope of Management

Although it is difficult to precisely define the scope of management, yet the following areas are
included in it:

1. Subject-matter of management: Planning, organizing, directing, coordinating and controlling

are the activities included in the subject matter of management.

2. Functional areas of management: These include: Financial management includes accounting,

budgetary control, quality control, financial planning and managing the overall finances of an
organization.

Personnel management includes recruitment, training, transfer promotion, demotion,

retirement, termination, labor-welfare and social security industrial relations.

Purchasing management includes inviting tenders for raw materials, placing orders, entering
into contracts and materials control. Production management includes production planning,
production control techniques, quality control and inspection and time and motion studies.
Maintenance management involves proper care and maintenance of the buildings, plant and
machinery. Transport management includes packing, warehousing and transportation by rail,
road and air. Distribution management includes marketing, market research, price-
determination, taking market- risk and advertising, publicity and sales promotion. Office
Management includes activities to properly manage the layout, staffing and equipment of the
office. Development management involves experimentation and research of production
techniques, markets, etc.
3. Management is an inter-disciplinary approach: For the correct implementation of the
management, it is important to have knowledge of commerce, economics, sociology,
psychology and mathematics.

4. Universal application: The principles of management can be applied to all types of

organizations irrespective of the nature of tasks that they perform.

5. Essentials of management: Three essentials of management are:

• Scientific method

• Human relations

• Quantitative technique

6. Modern management is an agent of change: The management techniques can be modified

by proper research and development to improve the performance of an organization.

Functions of management:-

Management has been described as a social process involving responsibility for economical and
effective planning & regulation of operation of an enterprise in the fulfillment of given
purposes. It is a dynamic process consisting of various elements and activities. These activities
are different from operative functions like marketing, finance, purchase etc. Rather these
activities are common to each and every manger irrespective of his level or status.

Different experts have classified functions of management. According to George & Jerry, “There
are four fundamental functions of management i.e. planning, organizing, actuating and
controlling”.

According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to
control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning,
O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for
Budgeting. But the most widely accepted are functions of management given by KOONTZ and
O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.
For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each
function blends into the other & each affects the performance of others.

Functions of Management

1-Planning:- It is the basic function of management. It deals with chalking out a future course of
action & deciding in advance the most appropriate course of actions for achievement of pre-
determined goals. According to KOONTZ, “Planning is deciding in advance - what to do, when to
do & how to do. It bridges the gap from where we are & where we want to be”. A plan is a
future course of actions. It is an exercise in problem solving & decision making. Planning is
determination of courses of action to achieve desired goals. Thus, planning is a systematic
thinking about ways & means for accomplishment of pre-determined goals. Planning is
necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is
an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.

2-Organizing: It is the process of bringing together physical, financial and human resources and
developing productive relationship amongst them for achievement of organizational goals.
According to Henry Fayol, “To organize a business is to provide it with everything useful or its
functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves
determining & providing human and non-human resources to the organizational structure.
Organizing as a process involves:

• Identification of activities.

• Classification of grouping of activities.

• Assignment of duties.

• Delegation of authority and creation of responsibility.

• Coordinating authority and responsibility relationships.

3-Staffing:-It is the function of manning the organization structure and keeping it manned.
Staffing has assumed greater importance in the recent years due to advancement of
technology, increase in size of business, complexity of human behavior etc. The main purpose o
staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round
holes. According to Kootz & O’Donell, “Managerial function of staffing involves manning the
organization structure through proper and effective selection, appraisal & development of
personnel to fill the roles designed un the structure”. Staffing involves:

• Manpower Planning (estimating man power in terms of searching, choose the person
and giving the right place).

• Recruitment, Selection & Placement.

• Training & Development.

• Remuneration.

• Performance Appraisal.

• Promotions & Transfer.

4-Directing:- It is that part of managerial function which actuates the organizational methods to
work efficiently for achievement of organizational purposes. It is considered life-spark of the
enterprise which sets it in motion the action of people because planning, organizing and
staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect
of management which deals directly with influencing, guiding, supervising, motivating sub-
ordinate for the achievement of organizational goals. Direction has following elements:

• Supervision

• Motivation

• Leadership

• Communication

• Supervision- implies overseeing the work of subordinates by their superiors. It is the act
of watching & directing work & workers.
• Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to
work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.

• Leadership- may be defined as a process by which manager guides and influences the
work of subordinates in desired direction.

• Communications- is the process of passing information, experience, opinion etc from

one person to another. It is a bridge of understanding.

5-Controlling It implies measurement of accomplishment against the standards and correction

of deviation if any to ensure achievement of organizational goals. The purpose of controlling is
to ensure that everything occurs in conformities with the standards. An efficient system of
control helps to predict deviations before they actually occur. According to Theo Haimann,
“Controlling is the process of checking whether or not proper progress is being made towards
the objectives and goals and acting if necessary, to correct any deviation”. According to Koontz
& O’Donell “Controlling is the measurement & correction of performance activities of
subordinates in order to make sure that the enterprise objectives and plans desired to obtain
them as being accomplished”. Therefore controlling has following steps:
Importance of management:=

1.It helps in Achieving Group Goals - It arranges the factors of production, assembles and
organizes the resources, integrates the resources in effective manner to achieve goals. It directs
group efforts towards achievement of pre-determined goals. By defining objective of
organization clearly there would be no wastage of time, money and effort. Management
converts disorganized resources of men, machines, money etc. into useful enterprise. These
resources are coordinated, directed and controlled in such a manner that enterprise work
towards attainment of goals.

2.Optimum Utilization of Resources - Management utilizes all the physical & human resources
productively. This leads to efficacy in management. Management provides maximum utilization
of scarce resources by selecting its best possible alternate use in industry from out of various
uses. It makes use of experts, professional and these services leads to use of their skills,
knowledge, and proper utilization and avoids wastage. If employees and machines are
producing its maximum there is no under employment of any resources.

3.Reduces Costs - It gets maximum results through minimum input by proper planning and by
using minimum input & getting maximum output. Management uses physical, human and
financial resources in such a manner which results in best combination. This helps in cost
reduction.

4.Establishes Sound Organization - No overlapping of efforts (smooth and coordinated

functions). To establish sound organizational structure is one of the objective of management
which is in tune with objective of organization and for fulfillment of this, it establishes effective
authority & responsibility relationship i.e. who is accountable to whom, who can give
instructions to whom, who are superiors & who are subordinates. Management fills up various
positions with right persons, having right skills, training and qualification. All jobs should be
cleared to everyone.

5.Establishes Equilibrium - It enables the organization to survive in changing environment. It

keeps in touch with the changing environment. With the change is external environment, the
initial co-ordination of organization must be changed. So it adapts organization to changing
demand of market / changing needs of societies. It is responsible for growth and survival of
organization.
6.Essentials for Prosperity of Society - Efficient management leads to better economical
production which helps in turn to increase the welfare of people. Good management makes a
difficult task easier by avoiding wastage of scarce resource. It improves standard of living. It
increases the profit which is beneficial to business and society will get maximum output at
minimum cost by creating employment opportunities which generate income in hands.
Organization comes with new products and researches beneficial for society.
UNIVERSALITY OF MANAGEMENT:-

The universality of management is an important concept to consider in modern management

thought. When describing management as universal, we refer to the widespread practice of
management in all types of organizations. As noted before, one cannot bring a group of people
together, regardless of the nature of the endeavor, and expect them to accomplish objectives
unless their efforts are coordinated. Among other things, plans must be outlined, task
identified, authority relationship specified, lines of communication established, and leadership
exercised. Management, therefore, is required before any organization can expect to be
effective.

Although management is universal, we should not assume that all managers are the same; if,
for no other reason, differences exist because no two individuals are alike. However, all
managers perform broad groups of duties that are smiliar. These groups of duties are the
functions of planning, organizing, actuating, and controlling. Although the responsibilities
associated with performing the functions vary among levels of authority, managers at all
material resources. Since the management functions must be performed to some degree in
order to achieve desired goals, we can say that there is, indeed, a universality of management.

The universal nature of management also implies that managerial skills are transferable from
one type of organization to another. If this is the case, a manager should expect to exverience
few problems in moving from one industry to another, from the military to business, from
business to government, from education to business, or from one department to another
within the same organization. There are certainly persons who have been successful in making
such moves. Other, however, have failed. For example. Laurence J.Peter cites numerous cases
that show promotions in an organization often accompliesh little beyond pointing out the in
competencies of those persons who have been promoted.

Although proven performance in one management position is no guarantee of success in

another, various issues should still be explored. First, managerial success depends on how well
managers do their jobs - that is, how well they perform the management functions in meeting
their responsibilities. Remember that manager is not a narrow technical specialist, but a person
who must plan, organize, actuate, and control. Again, this does not overlook the need for
technical information in the decision-making process. Technological, social, political, and
economic factors must be considered in most decisions. At the same time, managers must
recognize the importance of balancing the needs and goals various organizational members.
This, in turn, requires an ability to understand the overall nature of an organization's
operations.

A second factor to consider concerns to need for flexibility when adjusting to a new
organizational environment. All organizations have unique differences. Thus, for managers to
be successful in moving from one organization to another, they must be capable of adapting to
change. In addition, initiative, motivation to achieve, and the courage to accept and overcome
setbacks are important personal characteristics. When moving from large to smaller
organizations, these latter characteristics appear to be especially critical. Perhaps this is due to
the fact that smaller organizations do not have the technical specialists and staff support
groups found in their large counterparts. In any event, career movements from small
organizations to larger ones seem to present fewer problems.
LEVEL OF MANAGEMENT:-

The term “Levels of Management’ refers to a line of demarcation between various managerial
positions in an organization. The number of levels in management increases when the size of
the business and work force increases and vice versa. The level of management determines a
chain of command, the amount of authority & status enjoyed by any managerial position. The
levels of management can be classified in three broad categories:

1. Top level / Administrative level

2. Middle level / Executory

3. Low level / Supervisory / Operative / First-line managers

Managers at all these levels perform different functions. The role of managers at all the three
levels is discussed below:

1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is
the ultimate source of authority and it manages goals and policies for an enterprise. It devotes
more time on planning and coordinating functions.

The role of the top management can be summarized as follows -

a. Top management lays down the objectives and broad policies of the enterprise.
b. It issues necessary instructions for preparation of department budgets, procedures,
schedules etc.

c. It prepares strategic plans & policies for the enterprise.

d. It appoints the executive for middle level i.e. departmental managers.

e. It controls & coordinates the activities of all the departments.

f. It is also responsible for maintaining a contact with the outside world.

g. It provides guidance and direction.

h. The top management is also responsible towards the shareholders for the performance
of the enterprise.

2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They are responsible
to the top management for the functioning of their department. They devote more time to
organizational and directional functions. In small organization, there is only one layer of middle
level of management but in big enterprises, there may be senior and junior middle level
management. Their role can be emphasized as -

a. They execute the plans of the organization in accordance with the policies and directives
of the top management.

b. They make plans for the sub-units of the organization.

c. They participate in employment & training of lower level management.

d. They interpret and explain policies from top level management to lower level.

e. They are responsible for coordinating the activities within the division or department.

f. It also sends important reports and other important data to top level management.

g. They evaluate performance of junior managers.

h. They are also responsible for inspiring lower level managers towards better
performance.

3. Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists of
supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, “Supervisory
management refers to those executives whose work has to be largely with personal oversight
and direction of operative employees”. In other words, they are concerned with direction and
controlling function of management. Their activities include -

a. Assigning of jobs and tasks to various workers.

b. They guide and instruct workers for day to day activities.

c. They are responsible for the quality as well as quantity of production.

d. They are also entrusted with the responsibility of maintaining good relation in the
organization.

e. They communicate workers problems, suggestions, and recommendatory appeals etc to

the higher level and higher level goals and objectives to the workers.

f. They help to solve the grievances of the workers.

g. They supervise & guide the sub-ordinates.

h. They are responsible for providing training to the workers.

i. They arrange necessary materials, machines, tools etc for getting the things done.

j. They prepare periodical reports about the performance of the workers.

k. They ensure discipline in the enterprise.

l. They motivate workers.

m. They are the image builders of the enterprise because they are in direct contact with the
workers.

Managerial Skill:-

Much like a professional basketball player needs to know how to dribble and shoot a
basketball, or how a home builder understands the process of framing a house, managers also
need to have a specific set of skills in order to effectively perform their jobs. Managerial skills
are what the manager uses to assist the organization in accomplishing its goals. Specifically, a
manager will make use of his or her own abilities, knowledge base, experiences, and
perspectives to increase the productivity of those with whom they manage.
The toolbox for what a manager needs in order to perform their job effectively, typically, fall
into one of three categories: technical skills, human skills, and conceptual skills. To give you a
better understanding of these skills, let's take a look at how each of these skills are applied by
Manny the Manager and his employee Kelly the Financial Analyst.

Technical Skills:--

Technical skills are those skills needed to accomplish a specific task. It is the 'how to' skill set
that allows a manager to complete his or her job. These skills are the combination of formal
education, training, and on-the-job experience. Most employees expect their managers to have
a technical skill set above their own so that, when needed, an employee can come to their
manager to find out how to do something specific to their individual job.

For example, let's say that part of Kelly the Financial Analyst's job is to update a balance sheet
each week. Kelly is a novice financial analyst and is new to the company, so she's expecting her
manager, Manny, to show her how to perform this task initially, so that she can, eventually, do
it on her own. Therefore, it is essential for Manny to have the technical skills of how to update a
balance sheet so that he may, in turn, share that skill with Kelly. As a low-level manager,
technical skills are most important for Manny due to how close his role is to the general
workforce - in this case, Kelly.

Human Skills:--

The next type of skills a manager must have are human skills. These interpersonal skills are
what a manager will use to work with his or her employees. Some people are born with good
human skills; others must work much harder at it. Human skills are critical for all managers
because they work with people. Managers with good human skills understand their role inside
the manager/employee relationship and how important things, like trust, cohesion, fairness,
empathy, and good will, are to the overall success of the organization. Human skills help the
manager to communicate, lead, and motivate an employee to work towards a higher level of
productivity.

For example, let's go back to Kelly and Manny. Imagine Kelly's job description was changing to
include a greater deal of responsibility but for the same pay. Kelly is upset, and feels
overwhelmed by this change. Manny is a manager with good human skills, so he is able to
empathize and communicate his understanding of Kelly's frustration with the change to her.
Manny quickly works to find ways to motivate Kelly to continue to work at a higher level,
despite the additional workload being placed on her.
Conceptual Skills:--

Conceptual skills are the final type of skills a manager must possess inside their toolbox. The
level of analytical ability to envision both the parts and its sum directly translates into a
manager's conceptual skill set. Essentially, a manager's conceptual skills allow him or her to
solve problems in a strategic and calculated fashion. Conceptual skills are becoming increasingly
more important in today's chaotic business environment.

Managers are, continually, being challenged to think conceptually about their organizations to
develop action plans and harness resources to achieve organizational goals. A manager with
good conceptual skills can look at a problem, break it down into manageable pieces, consider a
variety of possible solutions, all before putting it back together again in a more effective and
efficient manner. Conceptual skills are most important for top managers but still important for
middle and low-level managers as well.

Task management:--

Task management is the process of managing a task through its life cycle. It involves planning,
testing, tracking and reporting. Task management can help either individuals achieve goals, or
groups of individuals collaborate and share knowledge for the accomplishment of collective
goals. Tasks are also differentiated by complexity, from low to high

Effective task management requires managing all aspects of a task, including its status, priority,
time, human and financial resources assignments, recurrency, notifications and so on. These
can be lumped together broadly into the basic activities of task management.

Managing multiple individual or team tasks may require specialized software, for example
workflow or project management software. In fact, many people believe that task management
should serve as a foundation for project management activities

Task management may form part of project management and process management and can
serve as the foundation for efficient workflow in an organization. Project managers adhering to
task-oriented management have a detailed and up-to-date project schedule, and are usually
good at directing team members and moving the project forward.

Roots management:

people are at the core of Christian development organisations:

■ These organisations exist to release people from material and spiritual poverty.

■ These organisations need people to carry out the work.

Without staff, organisations cannot exist. It is therefore vital that organisations do not take
their staff for granted. This book aims to help Christian development organisations consider and
improve how they recruit, develop and look after their staff. The term that is often used for this
is human resource management:

Human(s) – people with their experience, skills, knowledge and personal qualities. Human
resource – the people, and the policies and practices that affect them in the workplace. Human
resource management – the management of the people and the staff policies and practice that
enable an organization to carry out its work. This affects staff from the moment an individual
contacts the organization in response to a job advertisement, to the time they leave the
organization. Human resource management is about enabling staff to use their qualities in
order to fulfill their role and contribute to the organization’s mission and purpose. Good human
resource management is essential if organizations want to attract and retain good staff. If
people see that an organization values its staff, they are more likely to apply for a job with the
organization and more likely to stay once they are recruited. Good human resource
management means that an organization reduces risk to its staff and reputation. It can do this
by considering issues such as employment law, child protection and health and safety. Good
human resource management can also reduce costs for an organization. For example, good
recruitment policies and processes mean that organizations can efficiently recruit people who
will carry out their jobs effectively. Good systems for performance management mean that
organizations can ensure that they are getting the best from their staff. It should be noted that
volunteers are an important resource for many organizations. Some sections of this book, such
as salaries and employment contracts, are not relevant to volunteers. However, sections such
as benefits, performance management and staff development are relevant to volunteers.
Development organisations should consider carefully which policies and practices should also
be used with volunteers. Christian development organizations should base their human
resource management on Christian values. Staff is human beings made in God’s image and
therefore organizations should treat them fairly and with respect. Christian organizations
should be good stewards of their resources, enabling their staff to use the gifts God has given
them and investing in developing their potential. A Christian development organization that
claims to love the poor people it seeks to serve is unlikely to be effective unless it also
demonstrates the love of Christ to its staff. Staff who feels undervalued can lose their
motivation to love others and as a result, the organization’s direction and impact can be lost.
Human resource management is one area in which Christian development organisations can
model good practice to others.

Management During the Medieval Period

The medieval art of the Western world covers a vast scope of time and place, over 1000 years
of art in Europe, and at times the Middle East and North Africa. It includes major art
movements and periods, national and regional art, genres, revivals, the artists crafts, and the
artists themselves. Art historians attempt to classify medieval art into major periods and styles,
often with some difficulty. A generally accepted scheme includes the later phases of Early
Christian art, Migration Period art, Byzantine art, Insular art, Pre-Romanesque, Romanesque
art, and Gothic art, as well as many other periods within these central styles. In addition each
region, mostly during the period in the process of becoming nations or cultures, had its own
distinct artistic style, such as Anglo-Saxon art or Norse art. Medieval art was produced in many
media, and the works that remain in large numbers include sculpture, illuminated manuscripts,
stained glass, metalwork and mosaics, all of which have had a higher survival rate than other
media such as fresco wall-paintings, work in precious metals or textiles, including tapestry.
Especially in the early part of the period, works in the so-called "minor arts" or decorative arts,
such as metalwork, ivory carving, enamel and embroidery using precious metals, were probably
more highly valued than paintings or monumental sculpture.

Medieval art in Europe grew out of the artistic heritage of the Roman Empire and the
iconographic traditions of the early Christian church. These sources were mixed with the
vigorous "barbarian" artistic culture of Northern Europe to produce a remarkable artistic
legacy. Indeed, the history of medieval art can be seen as the history of the interplay between
the elements of classical, early Christian and "barbarian" art. Apart from the formal aspects of
classicism, there was a continuous tradition of realistic depiction of objects that survived in
Byzantine art throughout the period, while in the West it appears intermittently, combining and
sometimes competing with new expressionist possibilities developed in Western Europe and
the Northern legacy of energetic decorative elements. The period ended with the self-perceived
Renaissance recovery of the skills and values of classical art, and the artistic legacy of the
Middle Ages was then disparaged for some centuries. Since a revival of interest and
understanding in the 19th century it has been seen as a period of enormous achievement that
underlies the development of later Western art.

The Middle Ages saw a decrease in prosperity, stability and population in the first centuries of
the period—to about 800 AD, and then a fairly steady and general increase until the massive
setback of the Black Death around 1350, which is estimated to have killed at least a third of the
overall population in Europe, with generally higher rates in the south and lower in the north.
Many regions did not regain their former population levels until the 17th century. The
population of Europe is estimated to have reached a low point of about 18 million in 650,
doubling by 1000, and reaching over 70 million in 1340, just before the Black Death. In 1450 it
was still only 50 million. To these figures, Northern Europe, especially Britain, contributed a
lower proportion than today, and Southern Europe, including France, a higher one.[3] The
increase in prosperity, for those who survived, was much less affected by the Black Death. Until
about the 11th century most of Europe was short of agricultural labour, with large amounts of
unused land, and the Medieval Warm Period benefited agriculture until about 1315.

Scenes of courtly love on a lady's ivory mirror-case. Paris, 1300–1330.

The medieval period eventually saw the falling away of the invasions and incursions from
outside the area that characterized the first millennium. The Islamic conquests of the 6th and
7th century suddenly and permanently removed all of North Africa from the Western world,
and over the rest of the period Islamic peoples gradually took over the Byzantine Empire, until
the end of the Middle Ages when Catholic Europe, having regained the Iberian peninsula in the
southwest, was once again under Muslim threat from the southeast.

At the start of the medieval period most significant works of art were very rare and costly
objects associated with secular elites, monasteries or major churches, and if religious, largely
produced by monks. By the end of the Middle Ages works of considerable artistic interest could
be found in small villages and significant numbers of bourgeois homes in towns, and their
production was in many places an important local industry, with artists from the clergy now the
exception. However the Rule of St Benedict permitted the sale of works of art by monasteries,
and it is clear that throughout the period monks might produce art, including secular works,
commercially for a lay market, and monasteries would equally hire lay specialists where
necessary.

The impression may be left by the surviving works that almost all medieval art was religious.
This is far from the case; though the church became very wealthy over the Middle Ages and was
prepared at times to spend lavishly on art, there was also much secular art of equivalent quality
which has suffered from a far higher rate of wear and tear, loss and destruction. The Middle
Ages generally lacked the concept of preserving older works for their artistic merit, as opposed
to their association with a saint or founder figure, and the following periods of the Renaissance
and Baroque tended to disparage medieval art. Most luxury illuminated manuscripts of the
Early Middle Ages had lavish treasure binding book-covers in precious metal, ivory and jewels;
the re-bound pages and ivory reliefs for the covers have survived in far greater numbers than
complete covers, which have mostly been stripped off for their valuable materials at some
point.

Most churches have been rebuilt, often several times, but medieval palaces and large houses
have been lost at a far greater rate, which is also true of their fittings and decoration. In
England, churches survive largely intact from every century since the 7th, and in considerable
numbers for the later ones—the city of Norwich alone has 40 medieval churches—but of the
dozens of royal palaces none survive from earlier than the 11th century, and only a handful of
remnants from the rest of the period. The situation is similar in most of Europe, though the
14th century Pala is des Papas in Avignon survives largely intact. Many of the longest running
scholarly disputes over the date and origin of individual works relate to secular pieces, because
they are so much rarer - the Anglo-Saxon Fuller Brooch was refused by the British Museum as
an implausible fake, and small free-standing secular bronze sculptures are so rare that the date,
origin and even authenticity of both of the two best examples has been argued over for
decades.

The use of valuable materials is a constant in medieval art; until the end of the period, far more
was typically spent on buying them than on paying the artists, even if these were not monks
performing their duties. Gold was used for objects for churches and palaces, personal jeweler
and the fittings of clothes, and—fixed to the back of glass tesserae—as a solid background for
mosaics, or applied as gold leaf to miniatures in manuscripts and panel paintings. Many objects
using precious metals were made in the knowledge that their bullion value might be realized at
a future point—only near the end of the period could money be invested other than in real
estate, except at great risk or by committing usury.

The small private Wilton Diptych for Richard II of England, c. 1400, with stamped gold
backgrounds and much ultramarine.

The even more expensive pigment ultramarine, made from ground lapis lazuli obtainable only
from Afghanistan, was used lavishly in the Gothic period, more often for the traditional blue
outer mantle of the Virgin Mary than for skies. Ivory, often painted, was an important material
until the very end of the period, well illustrating the shift in luxury art to secular works; at the
beginning of the period most uses were shifting from consular diptychs to religious objects such
as book-covers, reliquaries and croziers, but in the Gothic period secular mirror-cases, caskets
and decorated combs become common among the well-off. As thin ivory panels carved in relief
could rarely be recycled for another work, the number of survivals is relatively high—the same
is true of manuscript pages, although these were often re-cycled by scraping, whereupon they
become palimpsests.
Development of management thought

Frederic Taylor's 4 principles of management:

• Develop a science for each element of an individual's work

• Scientifically select, train and develop the worker

• Heartily cooperate with the workers

• Divide work & responsibility equally between managers & workers

• Improve production efficiency through work studies, tools, economic incentives

DEVELOPMENT OF MANAGEMENT THOUGHTS

STAGES IN MANAGEMENT THOUGHT: STAGES IN MANAGEMENT THOUGHT The Classical

Theory of Management

1. Bureaucratic Model

2. Scientific Management

3. Process Management

II. The Neo-Classical Theory

1. Human Relations Movement

2. Behavioral Sciences Movement

III. The Modern Management Theories

1. Quantitative Approach

2. Systems Approach

3. Contingency Approach

Early Approaches to Management: Early Approaches to Management

VARIOUS APPROACHES OF MANAGEMENT: VARIOUS APPROACHES OF MANAGEMENT The

Classical Approach ( traditionally accepted views) : This approach emphasizes organizational
efficiency to increase organizational success. It believes in functional relationship, following of
certain principles based on experience, a bureaucratic structure and reward-punishment nexus.
The neo-classical approach: It emphasizes human relations, individual as well as group
relationships, and social aspects. This approach was pioneered by Mayo and his associates. This
was further extended to behavioural sciences approach pioneered by Maslow, Chris Argyris,
Douglas McGregor and Rensis Likert . Modern management thought: It combines concepts of
the classical school with social and natural sciences. It basically emerged from systems analysis.

Environmental Factors Influencing Management Thought: Environmental Factors Influencing

Management Thought Influences on Management Thought Economic Social Political Global
Technological

PowerPoint Presentation: Economic Influences Relate to the availability, production, and

distribution of resources within a society. Social Influences Relate to the aspects of a culture
that influence interpersonal relationships. Political Influences Relate to the impact of political
institutions on individuals and organizations . Technological Influences Relate to the advances
and refinements in any of the devices that are used in conjunction with conducting business.
Global Influences Relate to the pressures to improve quality, productivity, and costs as
organizations attempt to compete in the worldwide marketplace.

I. The Classical THEORY OF MANAGEMENT: I. The Classical THEORY OF MANAGEMENT

CONTRIBUTOR PIONEERING Robert Owen(1771-1858) He is called as the father of ‘Modern
Personnel Management’. He advocated the necessity of concern for the welfare of workers.
Charles Babbage(1792-1871) As an inventor and a management scientist, he built the practical
mechanical calculator, which is considered to be the basis of the modern computer. Andrew
Ure and Charles Duplin(1778-1857) They emphasizes the necessity of management education,
which further paved the way to professionalize management functions. James Watt Jr. &
Mathew Boulton (1796-1848) Both of them were the sons of a distinguished inventor of steam
engine. They were managing solo Engineering Foundary in Britain & developed a no. of
management techniques. Henry Robinson Towne(1844-1924) He emphasized the significance
of skills in running a business.

1. Max Weber (1864-1920) bureaucratic model: 1. Max Weber (1864-1920) bureaucratic model
A German Sociologist, was a teacher at Berlin University. He was the Chief exponent of the
Bureaucratic Model. Characteristics of Weber’s ideal Bureaucracy : Work specification and
division of labor Abstract rules and regulations: Impersonality of managers: Hierarchy of
organization structure
2. F.W. Taylor’s Scientific management : 2. F.W. Taylor’s Scientific management He is called as
the ‘Father of Scientific Management’ (1878). He started his experiment with the concept of
scientific management at Midvale Steel Co. He saw that the employees were deliberately
working at a pace slower than one capabilities . He found three reasons behind it: Fear of losing
their jobs if they increase their output Faulty wage systems Outdated methods of working. Two
major managerial practices: Piece-rate incentive system Time-and-motion study

PowerPoint Presentation: Principles of scientific management Replacement of Rule of Thumb

Co-operation Development of Workers Maximum Output Distribution of Work Elements of s
cientific management Work Study Standardisation of Tools and Equipment Scientific Selection,
Placement and Training Introduction of F unctional Foremanship Introducing Costing System
Mental Revolution

3. Henry Fayol’s administrative management (1841-1925) : 3. Henry Fayol’s administrative

management (1841-1925) He started his career as a junior engineer in a coal mine company in
France and became its General Manager in 1980. His contribution may be classified under three
categories: classification of business activities, functions of management, principles of
management. It focused on principles that could be used by managers to coordinate the
internal activities of organizations.

14 Principles of management: 14 Principles of management Division of labour : Division of work

leads to specialisation resulting in higher output. This principle recommends grouping of people
as per their area of specialization. If people are specialized at their work, they can perform their
task better. Authority : Managers must have the authority to issue orders and instructions to
the subordinates. Yet , formal authority alone may not help to compel obedience from
subordinates; managers must have the expertise to exert personal authority. Discipline :
Discipline means respect for rules and agreements. People working in an organization need to
comply with rules and agreements that govern the organization. Without discipline results
cannot be achieved.

PowerPoint Presentation: 4. Unity of command : There should be one boss for one subordinate.
Conflict will arise when one receives order and instructions from multiple managers. 5. Unity of
direction : All operations in an organization need to be directed towards one objective. Without
this achievement of goal cannot be ensured. 6. Subordination of individual interest to general
interest : If there is a conflict between the individual goals and organizational goals, preference
should be given to organizational goals, i.e., individual goals should not supersede the goals of
the organization. 7. Remuneration : There should be a fair system of remuneration that ensures
equal pay for equal work. It should be fair to both employees and employers. 8. Centralisation :
It refers to declining role of subordinates in the decision making. Though major decisions are
taken by the managers at the top level, but at the same time enough authority should be given
to the subordinates to do the jobs properly .

Henri Fayol (Istanbul, 29 July 1841 – Paris, 19 November 1925) was a French mining engineer,
mining executive,an author and director of mines who developed a general theory of business
administration that is often called Fayolism. He and his colleagues developed this theory
independently of scientific management but roughly contemporaneously. Like his
contemporary, Frederick Winslow Taylor, he is widely acknowledged as a founder of modern
management methods.

Fayol was born in 1841 in a suburb of Constantinople. His father (an engineer) was in the
military at the time and was appointed superintendent of works to build Galata Bridge, which
bridged the Golden Horn. The family returned to France in 1847, where Fayol graduated from
the mining academy "École Nationale Supérieure des Mines" in Saint-Étienne in 1860.

In 1860 at the age of nineteen Fayol started the mining company named "Compagnie de
Commentry-Fourchambault-Decazeville" in Commentry as the mining engineer. During his time
at the mine, he studied the causes of underground fires, how to prevent them, how to fight
them, how to reclaim mining areas that had been burned, and developed a knowledge of the
structure of the basin. In 1866 he was promoted to managing director. During his time as
director, he made changes to improve the working situations in the mines, such as allowing
employees to work in teams, and changing the division of labor Later, more mines were added
to his duties.

Eventually, the board decided to abandon its iron and steel business and the coal mines. They
chose Henri Fayol to oversee this as the new managing director. Upon receiving the position,
Fayol presented the board with a plan to restore the firm. The board accepted the
proposal.When he retired in 1918, the company was financially strong and one of the largest
industrial combines in Europe

Based largely on his own management experience, he developed his concept of administration.
In 1916 he published these experience in the book "Administration Industrielle et Générale", at
about the same time as Frederick Winslow Taylor published his Principles of Scientific
Management.

The control function, from the French contrôler, is used in the sense that a manager must
receive feedback about a process in order to make necessary adjustments and must analyse the
deviations. Lately scholars of management combined the commanding and coordinating
function into one leading function.

Principles of management:-
1-Division of work - The division of work is the course of tasks assigned to, and completed by, a
group of workers in order to increase efficiency. Division of work, which is also known as
division of labour, is the breaking down of a job so as to have a number of different tasks that
make up the whole. This means that for every one job, there can be any number of processes
that must occur for the job to be complete.

2-Authority and Responsibility - Authority is the right to give orders and obtain obedience, and
responsibility is the corollary of authority.

3-Discipline - Employees must obey and respect the rules that govern the organization. Good
discipline is the result of effective leadership.

4-Unity of command - Every employee should receive orders from only one superior or behalf
of the superior.

5-Unity of direction - Each group of organizational activities that have the same objective
should be directed by one manager using one plan for achievement of one common goal.

6-Subordination - The interests of any one employee or group of employees should not take
precedence over the interests of the organization as a whole.

7-Remuneration - All Workers must be paid a fair wage for their services.

8-Centralization - Centralization refers to the degree to which subordinates are involved in

decision making.

9-Scalar chain - The line of authority from top management to the lowest ranks represents the
scalar chain. Communications should follow this chain.

10-Order - this principle is concerned with systematic arrangement of men, machine, material
etc. there should be a specific place for every employee in an organization

11-Equity - Managers should be kind and fair to their subordinates.

Stability of tenure of personnel - High employee turnover is inefficient. Management should

provide orderly personnel planning and ensure that replacements are available to fill vacancies.

12-Initiative - Employees who are allowed to originate and carry out plans will exert high levels
of effort.

13-Esprit de corps - Promoting team spirit will build harmony and unity within the organization.
While Fayol came up with his theories almost a century ago, many of his principles are still
represented in contemporary management theories Many of today’s management texts
including Richard L. Daft's[10] have reduced the six functions to five

(1) planning;

(2) organizing;

(3) leading;

(4) controlling

(5) forecasting.

Daft's text is organized around Fayal’s six functions.

Neo-classical School-Human Relations approach

A Shift Away from Classical Management Theory

In the early 1920s, classical management theorists, such as Frederick Taylor, Henry Gantt, and
Frank and Lillian Gilbreth, spent their time researching how a specific job was done, what steps
were taken by an employee to complete the work, and the amount of time it took a worker to
complete a task using different methods. They then used this information to determine the
most effective way of completing a task. While these individuals focused on the science of
creating specialized work processes and workforce skills to complete production tasks
efficiently, critics began to scrutinize classical management theory for its potentially harmful
effects on workers.

It was not so much the methodology of finding the most efficient way to complete a task that
concerned critics, but the underlying assumption of classical management theorists that
managers and workers would meet halfway on their attitudes towards standardization.
However, many believed that placing too much emphasis on standardization of jobs and
workers had not created this 'mental revolution' that Taylor and his associates had hoped for,
but rather had inadvertently created an attitude among managers at the time that employees
were nothing more than an appendage to a machine. While machines and processes could be
standardized, critics argued that it was unrealistic to expect that standardization among
emotional beings; the two needed to be looked at individually. So, as Taylor and other classical
management theorists continued their work on standardization, others started to conduct
research on the worker, and thus, the neoclassical theory of management was born.

The Emergence of the Neoclassical Theory of Management

The neoclassical theory was an attempt at incorporating the behavioral sciences into
management thought in order to solve the problems caused by classical theory practices. The
premise of this inclusion was based on the idea that the role of management is to use
employees to get things done in organizations. Rather than focus on production, structures, or
technology, the neoclassical theory was concerned with the employee. Neoclassical theorists
concentrated on answering questions related to the best way to motivate, structure, and
support employees within the organization.

Studies during this time, including the popular Hawthorne Studies, revealed that social factors,
such as employee relationships, were an important factor for managers to consider. It was
believed that any manager who failed to account for the social needs of his or her employees
could expect to deal with resistance and lower performance. Employees needed to find some
intrinsic value in their jobs, which they certainly were not getting from the job that was highly
standardized. Rather than placing employees into job roles, where they completed one specific
task all day with little to no interaction with coworkers, employees could be structured in such
a way that they would frequently share tasks, information, and knowledge with one another.
The belief was that once employees were placed into this alternate structure, their needs for
socialization would be fulfilled, and thus they would be more productive.

Two Movements in the Neoclassical Theory

The neoclassical theory encompasses approaches and theories that focus on the human side of
an organization. There are two main sources of neoclassical theory: the human relations
movement and the behavioral movement. The human relations movement arose from the work
of several sociologists and social physiologists who concerned themselves with how people
relate and interact within a group. The behavioral movement came from various psychologists
who focused on the individual behavior of employees. To better understand these movements,
let's take a look at how the work of these various sociologists and psychologists influenced
management thought.

Human Relations Movement

The human relations movement was a direct result of Elton Mayo and Fritz J. Roethlisberger's
Hawthorne studies, which were designed to find ways to increase worker productivity at
Western Electric's Hawthorne Works factory by assessing working conditions related to things
such as lighting levels, rest periods, and the length of a work day. Those participating in the
experiments were watched closely by the researchers. During the experiment, productivity
levels of those participating in the experiment increased but not directly due to the conditions
that Mayo and Roethlisberger were imposing on them.
Because they could not correlate the increase in productivity to the working conditions that
they were controlling in the experiment, alternative causes were explored. Eventually, the
researchers attributed the increase in productivity to the higher morale that was witnessed in
the group during the experiment. This morale and productivity boost was indirectly caused by
the changes the researchers made to working

Behavioral Science approach

The behavioral science approach to management focuses on the psychological and sociological
processes (attitude, motivations, group dynamics) that influence employee performance. While
the classical approach focuses on the job of workers, the behavioral approach focuses on the
workers in these jobs. Workers desisted the formal and impersonal approach of classical
writers. Behavioral approach started in 1930.

This gave rise to the Behavioral science approach to management. Two branches contributed to
the Behavioral approach.

1. Human Relations Movements: The human relations movement refers to the approach
to management and worker productivity that takes into account a person’s motivation,
satisfaction, and relationship with others in the workplace. The human relations movement
grew from the Hawthorne studies.

2. Development of Organizational Behavior: Pioneers of the human relation movement

stressed inter-personal relations and neglected the group behavior patterns. This led to the
development of field of organizational behavior. It respects a more. Interdisciplinary and multi-
dimensional approach to worker behavior organization behavior involves the study of the
attitudes, behavior patterns and performance of individuals and group in an organizational
setting. It says that:

Man is not a social individual, he is a complex individual.

The role and contribution of organisation behavior in workers.

It discussed the psychological variables like motivations, leading etc.

Man is a self-actualizing being.

Classification of human needs by Maslow as under:

1. Physiological needs: these needs are related to the survival and maintenance of life.
These include food, clothing, shelter etc.
2. Safety needs: these consist of safety against murder, fire, accident, security against
unemployment etc.

3. Social needs: these needs include need for love, affection, belonging or association with
family, friends and other social groups.

4. Ego or esteem needs: these are the needs derived from recognition status,
achievement, power, prestige etc.

5. Self–fulfillment: it is the need to fulfill what a person considers to be his real mission of
life

Contributions of Behavioral Science Approach to Management

The behavioral science approach to management is concerned with the social and psychological
aspects of human behavior in organisation. Many of the conclusions of the Hawthorne studies
were reaffirmed by the subsequent research studies, but certain ideas were extended and
others highlighted by the behavioral scientists. Some of the important elements of the
behavioral science approach are highlighted below.

1. Individuals differ in terms of their attitudes, perception and value systems. Therefore,
they react differently to the same situation.

2. People working in an organisation have their needs and goals, which may differ from the
organisation’s needs and goals. Management should achieve fusion between organisational
goals and human needs.

3. Individual behavior is closely linked with the behavior of the group to which he belongs.
A person may be inclined to resist pressures to change his behavior as an individual. But he will
readily do so if the group decides to change its behavior. With work standards laid down by the
group, individuals belonging to that group will resist change more strongly.

4. Informal leadership, rather than the formal authority of supervisor, is more important
for setting and enforcing group standards of performance. As a leader (manger) may be more
effective and acceptable to the subordinates if he adopts the democratic style of leadership. If
the subordinates are encouraged to participate in establishing the goals, there will be positive
effect on their attitude towards work. Changes in technology and methods of work, which are
often resisted by employees, can be brought about more easily by involving the employees in
planning and designing the jobs.

5. By nature most people enjoy work and are motivated by self-control and self-
development. It is for the managers to identify and provide necessary conditions for the human
potential to be used in the service of the organisation. The manager’s attitude towards human
behavior should be positive.

The behavioral scientists have shown how human beings bring to their task aspects of behavior,
which the effective manager should profitably understand. After all, it is individuals and groups
with which a manager is concerned and while organisational roles are designed to accomplish
group purposes, people must fill these roles.

Thus, the behavioral sciences have provided managers with a ore systematic understanding of
one of the most critical factors in the process of management—the human element. Insights
evolving from that understanding have been used to design work situations that encourage
increased productivity. It has enabled organisations to formulate programmes to more
efficiently train workers and managers, and it has effects in numerous other areas of practical
significance.

Modern School-Systems approach

Modern Management Theory: Quantitative, System and Contingency Approaches to

Management!

The Modern Period (1960 to present). After, 1960 management thought has been turning
somewhat away from the extreme human relations ideas particularly regarding the direct
relation between morale and productivity. Present management thinking wishes equal
emphasis on man and machine.

The modern business ideologists have recognized the social responsibilities of business
activities and thinking on similar lines. During the period, the principles of management
reached a stage of refinement and perfection. The formation of big companies resulted in the
separation of ownership and management.

This change in ownership pattern inevitably brought in ‘salaried and professional managers’ in
place of ‘owner managers’. The giving of control to the hired management resulted in the wider
use of scientific methods of management. But at the same time the professional management
has become socially responsible to various sections of society such as customers, shareholders,
suppliers, employees, trade unions and other Government agencies.

Under modern management thought three streams of thinking have beers noticed since 1960:

(i) Quantitative or Mathematical Approach

(ii) Systems Approach.

(iii) Contingency Approach.

(I) Quantitative or Mathematical Approach or Management Science Approach:

Mathematics has made inroads into all disciplines. It has been universally recognised as an
important tool of analysis and a language for precise expression of concept and relationship.

Evolving from the Decision Theory School, the Mathematical School gives a quantitative basis
for decision-making and considers management as a system of mathematical models and
processes. This school is also sometimes called, ‘ Operations Research” or “Management
Science School’. The main feature of this school is the use of mixed teams of scientists from
several disciplines. It uses scientific techniques for providing quantitative base for managerial
decisions. The exponents of this school view management as a system of logical process.
It can be expressed in terms of mathematical symbols and relationships or models. Different
mathematical and quantitative techniques or tools, such as linear programming, simulation and
queuing, are being increasingly used in almost all the areas of management for studying a wide
range of problems.

The exponents of this school believe that all the phases of management can be expressed in
quantitative terms for analysis. However, it is to be noted that mathematical models do help in
the systematic analysis of problems, but models are no substitute for sound judgement.

Moreover, mathematics quantitative techniques provide tools for analysis but they cannot be
treated an independent system of management thought. A lot of mathematics is used in the
field of physical sciences and engineering but mathematics has never been considered as
separate school even in these fields.

The contributions of mathematicians in the field of management are significant. This has
contributed impressively in developing orderly thinking amongst managers. It has given
exactness to the management discipline. Its contributions and usefulness could hardly be over-
emphasized. However, it can only be treated as a tool in managerial practice.

Limitations:

There is no doubt that this approach helps in defining and solving complex problems resulting
in orderly thinking. But the critics of this approach regard it as too narrow since it is concerned
merely with the development of mathematical models and solutions for certain managerial
problems.

This approach suffers from the following drawbacks:

(i) This approach does not give any weight age to human element which plays a dominant role
in all organisations.

(ii) In actual life executives have to take decisions quickly without waiting for full information to
develop models.

(iii) The various mathematical tools help in decision making. But decision- making is one part of
managerial activities. Management has many other functions than decision-making.

(iv) This approach supposes that all variables to decision-making are measurable and inter-
dependent. This assumption is not realistic.
(v) Sometimes, the information available in the business for developing mathematical models
are not upto date and may lead to wrong decision-making.

Harold Knootz. Also observes that “it is too hard to see mathematics as a separate approach to
management theory. Mathematics is a tool rather than a school.”

(ii) Systems Approach:

In the 1960, an approach to management appeared which tried to unify the prior schools of
thought. This approach is commonly known as ‘Systems Approach’. Its early contributors
include Ludwig Von Bertalanffy, Lawrence J. Henderson, W.G. Scott, Denial Katz, Robert L. Kahn,
W. Buckley and J.D. Thompson.

They viewed organization as an organic and open system, which is composed of interacting and
interdependent parts, called subsystems. The system approach is to look upon management as
a system or as “an organised whole” made up of sub­systems integrated into a unity or orderly
totality.

System approach is based on the generalization that everything is inter-related and inter-
dependent. A system is composed of related and dependent element which, when in
interaction, forms a unitary whole. A system is simply an assemblage or combination of things
or parts forming a complex whole.

One of its most important characteristic is that it is composed of hierarchy of sub-systems. That
is the parts forming the major systems and so on. For example, the world can be considered to
be a system in which various national economies are sub-systems.

In turn, each national economy is composed of its various industries, each industry is composed
of firms; and of course, a firm can be considered a system composed of sub-systems such as
production, marketing, finance, accounting and so on.

The basic features of systems approach are as under:

(i) A system consists of interacting elements. It is set of inter related and inter-dependent parts
arranged in a manner that produces a unified whole.

(ii) The various sub-systems should be studied in their inter- relationships rather, than in
isolation from each other.

(iii) An organizational system has a boundary that determines which parts are internal and
which are external.
(iv) A system does not exist in a vaccum. It receives information, material and energy from
other systems as inputs. These inputs undergo a transformation process within the system and
leave the system as output to other systems.

(v) An organization is a dynamic system as it is responsive to its environment. It is vulnerable to

change in its environment.

In the systems approach, attention is paid towards the overall effectiveness of the system
rather than the effectiveness of the sub-systems. The interdependence of the sub-systems is
taken into account. The idea of systems can be applied at an organizational level. In applying
system concepts, organizations are taken into account and not only the objectives and
performances of different departments (sub-systems).

The systems approach is considered both general and specialized systems. The general systems
approach to management is mainly concerned with formal organizations and the concepts are
relating to technique of sociology, psychology and philosophy. The specific management system
includes the analysis of organizational structure, information, planning and control mechanism
and job design, etc.

As discussed earlier, system approach has immense possibilities, “A system view point may
provide the impetus to unify management theory. By definitions, it could treat the various
approaches such as the process of quantitative and behavioural ones as sub-systems in an
overall theory of management. Thus, the systems approach may succeed where the process
approach has failed to lead management out of the theory of jungle. ”

Systems theory is useful to management because it aims at achieving the objectives and it
views organization as an open system. Chester Barnard was the first person to utilize the
systems approach in the field of management.

He feels that the executive must steer through by keeping a balance between conflicting forces
and events. A high order of responsible leadership makes the executives effective. H. Simon
viewed organization as a complex system of decision making process.

Evaluation of System Approach:

The systems approach assists in studying the functions of complex organisations and has been
utilised as the base for the new kinds of organisations like project management organization. It
is possible to bring out the inter-relations in various functions like planning, organizing,
directing and controlling. This approach has an edge over the other approaches because it is
very close to reality. This approach is called abstract and vague. It cannot be easily applied to
large and complex organizations. Moreover, it does not provide any tool and technique for
managers.

(iii) Contingency or Situational Approach:

The contingency approach is the latest approach to the existing management approaches.
During the 1970’s, contingency theory was developed by J.W. Lorsch and P.R. Lawrence, who
were critical of other approaches presupposing one best way to manage. Management
problems are different under different situations and require to be tackled as per the demand
of the situation.

One best way of doing may be useful for repetitive things but not for managerial problems. The
contingency theory aims at integrating theory with practice in systems framework. The
behavior of an organization is said to be contingent on forces of environment. “Hence, a
contingency approach is an approach, where behaviour of one sub-unit is dependent on its
environment and relationship to other units or sub-units that have some control over the
sequences desired by that sub- unit.”

Thus behavior within an organization is contingent on environment, and if a manager wants to

change the behavior of any part of the organization, he must try to change the situation
influencing it. Torsi and Hammer tell that organization system is not a matter of managerial
choice, but contingent upon its external environment.

Contingency approach is an improvement over the systems approach. The interactions

between the sub-systems of an organization have long been recognized by the systems
approach. Contingency approach also recognizes that organizational system is the product of
the interaction of the sub systems and the environment. Besides, it seeks to identify exact
nature of inter-actions and inter-relationships.

This approach calls for an identification of the internal and external variables that critically
influence managerial revolution and organizational performance. According to this, internal and
external environment of the organization is made up of the organizational sub-systems. Thus,
the contingency approach provides a pragmatic method of analyzing organizational sub-
systems and tries to integrate these with the environment.

Contingency views are ultimately directed towards suggesting organizational designs situations.
Therefore, this approach is also called situational approach. This approach helps us to evolve
practical answers to the problems remanding solutions. NKast and Rosenzweig give a broader
view of the contingency approach. They say, “The contingency view seeks to understand the
inter-relationships within and among sub-systems as well as between the organization and its
environment and to define patterns of relationships or configurations of variables contingency
views are ultimately directed toward suggesting organization designs and managerial actions
most appropriate for specific situations.

Features of Contingency Approach:

Firstly, the contingency approach does not accept the universality of management theory. It
stresses that there is no one best way of doing things. Management is situation, and managers
should explain objectives, design organisations and prepare strategies, policies and plans
according to prevailing circumstances. Secondly, managerial policies and practices to be
effective, must adjust to changes in environment

Thirdly, it should improve diagnostic skills so as to anticipate and ready for environmental
changes. Fourthly, managers should have sufficient human relations skill to accommodate and
stabilize change.

Finally, it should apply the contingency model in designing the organization, developing its
information and communication system, following proper leadership styles and preparing
suitable objectives, policies, strategies, programmers and practices. Thus, contingency
approach looks to hold a great deal of promise for the future development of management
theory and practice.

Evaluation:

This approach takes a realistic view in management and organization. It discards the universal
validity of principles. Executives are advised to be situation oriented and not stereo-typed. So
executives become innovative and creative. On the other hands, this approach does not have
theoretical base. An executive is expected to know all the alternative courses of action before
taking action in a situation which is not always feasible.

Contingency approach and Contemporary Approach to Management –

The contingency approach to management holds that management techniques should be

dependent upon the circumstances. In this lesson, you will learn what the contingency
approach to management is and the key elements of contingency management.

Definition

A contingency approach to management is based on the theory that management effectiveness

is contingent, or dependent, upon the interplay between the application of management
behaviors and specific situations. In other words, the way you manage should change
depending on the circumstances. One size does not fit all.

Theory

The contingency approach to management finds its foundation in the contingency theory of
leadership effectiveness developed by management psychologist Fred Fielder. The theory
states that leadership effectiveness, as it relates to group effectiveness, is a component of two
factors: task motivation, or relation motivation, and circumstances. You measure task
motivation, or relation motivation, by the least preferred co-worker (LPC) scale.

The LPC scale asks the manager to think of the person they least liking working with and then
rate that person on a set of questions, each involving an 8-point scale. For example, a score of
one would be uncooperative, and a score of eight would be cooperative. Fielder believed that
people with a higher LPC score try to maintain harmony in their work relationships, while
people with a lower LPC score are motivated to focus on task accomplishment.

The theory states that task or relations motivations is contingent upon whether the manager is
able to both control and effect the group's situational favorability, or outcome. According to
the theory, you can assess situational favorability by three factors:

Leader-member relations - This factor addresses the manager's perception of his cooperative
relations with his subordinates. In other words, is the cooperation between you and your
employees good or bad?

Task structure - This factor relates to whether the structure of the work task is highly
structured, subject to standard procedures and subject to adequate measures of assessment.
Certain tasks are easy to structure, standardize and assess, such as the operation of an
assembly line.

Contemporary approach

Peter Ferdinand Drucker November 19, 1909 – November 11, 2005) was an Austrian-born
American management consultant, educator, and author, whose writings contributed to the
philosophical and practical foundations of the modern business corporation. He was also a
leader in the development of management education, he invented the concept known as
management by objectives and self-control, and he has been described as "the founder of
modern management.

Drucker's books and scholarly and popular articles explored how humans are organized across
the business, government, and nonprofit sectors of society.He is one of the best-known and
most widely influential thinkers and writers on the subject of management theory and practice.
His writings have predicted many of the major developments of the late twentieth century,
including privatization and decentralization; the rise of Japan to economic world power; the
decisive importance of marketing; and the emergence of the information society with its
necessity of lifelong learning. In 1959, Drucker coined the term “knowledge worker," and later
in his life considered knowledge-worker productivity to be the next frontier of management.
Peter Drucker gave his name to three institutions: the Drucker Institute and the Peter F.
Drucker and Masatoshi Ito Graduate School of Management, both at Claremont Graduate
University, and the Peter F. Drucker Academy.The annual Global Peter Drucker Forum in his
hometown of Vienna, honors his legacy.

Peter Drucker was of Jewish descent on both sides of his family,not in citation given] but his
parents converted to Christianity and lived in what he referred to as a "liberal" Lutheran
Protestant household in Austria-Hungary. His mother Caroline Bondi had studied medicine and
his father Adolf Drucker was a lawyer and high-level civil servant. Drucker was born in Vienna,
Austria, in a small village named Kaasgraben (now part of the 19th district of Vienna-Döbling).
He grew up in a home where intellectuals, high government officials, and scientists would meet
to discuss new ideas. These included Joseph Schumpeter, Friedrich Hayek and Ludwig von
Mises. Hans Kelsen was his uncle.

After graduating from Döbling Gymnasium in 1927,[ Drucker found few opportunities for
employment in post-World War I Vienna, so he moved to Hamburg, Germany, first working as
an apprentice at an established cotton trading company, then as a journalist, writing for Der
Österreichische Volkswirt (The Austrian Economist).Drucker then moved to Frankfurt, where he
took a job at the Daily Frankfurter General-Anzeiger. While in Frankfurt, he also earned a
doctorate in international law and public law from the University of Frankfurt in 1931.

In 1933, Drucker left Germany for England.In London, he worked for an insurance company,
then as the chief economist at a private bank. He also reconnected with Doris Schmitz, an
acquaintance from the University of Frankfurt, and they married in 1934. The couple
permanently relocated to the United States, where he became a university professor as well as
a freelance writer and business consultant.

In 1943, Drucker became a naturalized citizen of the United States. He then had a distinguished
career as a teacher, first as a professor of politics and philosophy at Bennington College from
1942 to 1949, then twenty-two years at New York University as a Professor of Management
from 1950 to 1971.

Drucker went to California in 1971, where he developed one of the country's first executive
MBA programs for working professionals at Claremont Graduate University (then known as
Claremont Graduate School). From 1971 until his death, he was the Clarke Professor of Social
Science and Management at Claremont. Claremont Graduate University's management school
was named the Peter F. Drucker Graduate School of Management in his honor in 1987 (later
renamed the Peter F. Drucker and Masatoshi Ito Graduate School of Management). He
established the Drucker Archives at Claremont Graduate University in 1999; the Archives
became the Drucker Institute in 2006. Drucker taught his last class in 2002 at age 92. He
continued to act as a consultant to businesses and non-profit organizations well into his
nineties.

Drucker died November 11, 2005 in Claremont, California of natural causes at 95. He had four
children and is the grandfather of tech entrepreneur Nova Spivack, one of six grandchildren.
Drucker's wife Doris died in October 2014 at the age of 103

Contingency and contemporary approach porter:

According to porter:

Contingency approach, also known as situational approach, is a concept in management stating

that there is no one universally applicable set of management principles (rules) by which to
manage organizations. Organizations are individually different, face different situations
(contingency variables), and require different ways of managing. Contingency approaches
remain less common than change management approaches.The Four Contemporary
Approaches to Management

According to Bateman and Snell (2013), sociotechnical systems theory implies that
organizations are satisfactory when their employees (the social system) have the right tools,
training, and knowledge (the technical system) to make goods and services that are valued by
customers (Bateman & Snell, 2013, p. 20). The term sociotechnical was invented by the
Tavistock Institute of Human Relations in Britain (Marshall 1998). (Marshall 1998) found that
“the Tavistock researchers argued that technology merely constrains human action, rather than
rigidly determining behavioral outcomes” (para. 2). Employees having the ability to choose can
build good interpersonal relationships in the workplace.

A quantitative management approach involves the use of mathematics to solve problems on

the job. According to Bateman & Snell (2013), “quantitative management helps a manager
make a decision by developing formal mathematical models of the problem. Computers
facilitated the development of specific quantitative methods” (p. 21). This particular
management approach may be used in the workplace when developing new products or even
resolving conflicts between employees.
Organizational behavior focuses on the relationship between managers and employees.
Organizational behavior draws from a variety of disciplines, including psychology and sociology,
to explain the behavior of people on the job (Bateman & Snell, 2013, p. 22). According to
Robbins & Decenzo (2001), “theorists believed that organizational behavior has its roots in the
Human Relations approach, which viewed happier employees were more productive” (ch.2).

(Bateman & Snell 2013) states that a “System Theory is a theory stating that an organization is a
managed system that changes inputs into outputs” (p. 22). A system is a set of interdependent
parts or elements that function as a whole in achieving certain goals or objectives (Robbins &
Decenzo 2001

Contribution of Hammer: he is known as the father of reengineering. His ideas on

management are:

Re- engineering

Re- assessing

Re- thinking

Improvements

Revolutionary change

Participative decision making

Tom Peters:

He gave ideas on solving business problems and empowering decision makers at multiple
levels of the company.

Contribution of porter:

Five forces model

1. Threats to new entrants

2. Bargaining power of buyers
3. Bargaining power of suppliers
4. Threats of substitute and alternatives
5. Existing rivalry
Management in perspectives:

Manager" redirects here. For other uses, see Management (disambiguation) and Manager
(disambiguation).

Management in businesses and organizations is the function that coordinates the efforts of
people to accomplish goals and objectives by using available resources efficiently and
effectively.

Management includes planning, organizing, staffing, leading or directing, and controlling an

organization to accomplish the goal or target. Resourcing encompasses the deployment and
manipulation of human resources, financial resources, technological resources, and natural
resources. Management is also an academic discipline, a social science whose objective is to
study social organization

What does it mean to be a manager? Being a manager is a complex and challenging activity.
This free course, Management: perspective and practice, introduces you to the role of the
manager. In this Open Learn course you’ll look at an array of activities including leadership,
human resources, finance, project management, change management, operations
management and stakeholder management.

After studying this course, you should be able to:

• appreciate how organizational structure and culture contribute to management control

in organizations

• think about how to analyze an organization in this respect

• understand an organization’s characteristics and how they might impact on

management practices.

In this free course, Management: perspective and practice, you will be studying different ways
to think about understanding organizations and approaches to managing the people who work
within them.

The theories and models in this course look at the organizational context (the ‘organization’,
the ‘context’ and the ‘wider environment’ of) and helps you to begin to answer the question:

How does my organization context and environment affect my management practice?

This course is comprised of:

Exploring ideas, Understanding organizations and Organizational culture

discussing ways that organizational theorists have characterized organizational structures and
cultures, and the impact of different national cultures on organizational practice and ways in
which managers might make sense of these

a short pre-reading activity asking you to think about a problem/opportunity situation in your
own context, to see how these theories and models are both relevant and irrelevant to your
own management practice.

1-Creative problem solving

developing your skills in creative problem solving by learning some techniques based on
systems theory

learning how to use case studies and their analysis to better understand and apply the ideas
you are studying.

2-Making connections

thinking more closely about your organization’s culture and how you can use metaphors to
better understand the way organizations work.

The features of management perspectives are:

1. Multi-disciplinary approach: Management has grown as a separate discipline drawing upon

the knowledge and skills of various disciplines like economics, commerce, cooperation, finance,
political science, sociology, statistics, demography, quantitative techniques, engineering,
ecology, geography, biology, etc.

Management uses the relevant information from these disciplines and integrates them to form
a multi-disciplinary and cross functional field of study and develops a broad-spectrum approach
in dealing with organizational problems.

2. Dynamic and relative principles: Management principles and systems are dynamic, open,
progressive and flexible in nature-not rigid, closed or absolute. They can be adapted or
modified to suit the requirements of different types of organizations and changed situations.

3. Organized activity: Management is not an isolated activity but is essentially a team-work in

formally organized groups.

4. Existence of objective: Determination of organizational objectives and their accomplishment

form the core of managerial activity.
5. Working with and through people: Management is essentially leading, guiding, developing
and motivating people to effective performance for attainment of common goals.

6. Integration of resources: Management is integrating and balancing of all resources- both

material and human-for their optimum utilization, so as to achieve effective results.

7. Management- Both a Science and an Art: Management is a science because it consists of an

organized knowledge and systematic body of principles. It is, however, a combination of social
sciences and behavioral sciences, not an exact science like the physical or natural sciences.

Management is also an art because it involves application of systematic knowledge and

scientific principles for achieving the desired results in actual work situations. Science teaches
on "to know" while art "to do". It may be said that management is the oldest of arts and the
youngest of sciences. Management is essentially a practice as it is performance oriented
creative action.

8. Management a profession: Management has now emerged as a profession as managers, to

be effective, must acquire the basic professional knowledge and skill in managing, through
formal management education or management training; develop the right managerial attitude,
sense of professional responsibility and service motive follow the professional code of ethics;
and associate themselves with professional management associations or institutions.

9. University of Management: The basic process and the principles of management are
applicable in all situations, in different organizations and countries, with such modifications as
deemed necessary.

10. Management both a technical and a social process: Management integrates, in all its
decisions and actions, the technical and the social aspects, the economic and the human
aspects of the organization.

11. Management includes administration: Although different authors have expressed different
views about the use of these two terms and many of them have mentioned several points of
distinction or difference between them, for all practical purposes, management and
administration are considered as the same - with regard to responsibilities, tasks and process.

12. Management a multi-purpose organ: Management is a "multi-purpose organ" of a business

enterprise (which is itself a specific organ of a industrial society") that "manages a business,
manages managers, manages workers and work" to quote the inimitable words of Peter
Drucker, "If one of them were omitted, we would not have management anymore and we also
would not have a business enterprise or an intestinal society"

.
Knowledge management (KM) is the process of capturing, developing, sharing, and effectively
using organizational knowledge. It refers to a multi-disciplinary approach to achieving
organizational objectives by making the best use of knowledge

An established discipline since 1991 , KM includes courses taught in the fields of business
administration, information systems, management, library, and information sciences. Other
fields may contribute to KM research, including information and media, computer science,
public health, and public policy. Several Universities offer dedicated Master of Science degrees
in Knowledge Management.

Many large companies, public institutions, and non-profit organizations have resources
dedicated to internal KM efforts, often as a part of their business strategy, information
technology, or human resource management departments. Several consulting companies
provide advice regarding KM to these organizations.

Knowledge management efforts typically focus on organizational objectives such as improved

performance, competitive advantage, innovation, the sharing of lessons learned, integration,
and continuous improvement of the organization. These efforts overlap with organizational
learning and may be distinguished from that by a greater focus on the management of
knowledge as a strategic asset and a focus on encouraging the sharing of knowledge.

Knowledge management efforts have a long history, including on-the-job discussions, formal
apprenticeship, discussion forums, corporate libraries, professional training, and mentoring
programs. With increased use of computers in the second half of the 20th century, specific
adaptations of technologies such as knowledge bases, expert systems, knowledge repositories,
group decision support systems, intranets, and computer-supported cooperative work have
been introduced to further enhance such efforts.

In 1999, the term personal knowledge management was introduced; it refers to the
management of knowledge at the individual level.

In the enterprise, early collections of case studies recognized the importance of knowledge
management dimensions of strategy, process, and measurement. Key lessons learned include
people and the cultural norms which influence their behaviors are the most critical resources
for successful knowledge creation, dissemination, and application; cognitive, social, and
organizational learning processes are essential to the success of a knowledge management
strategy; and measurement, benchmarking, and incentives are essential to accelerate the
learning process and to drive cultural change. In short, knowledge management programs can
yield impressive benefits to individuals and organizations if they are purposeful, concrete, and
action-orienta

A learning organization is the business term given to a company that facilitates the learning of
its members and continuously transforms itself. The concept was coined through the work and
research of Peter Senge and his colleagues.

Learning organizations develop as a result of the pressures facing modern organizations and
enables them to remain competitive in the business environment.

Characteristics

There is a multitude of definitions of a learning organization as well as their typologies. Peter

Senge stated in an interview that a learning organization is a group of people working together
collectively to enhance their capacities to create results they really care about.[4] Senge
popularized the concept of the learning organization through his book The Fifth Discipline. In
the book, he proposed the following five characteristics:

1-Systems thinking.

The idea of the learning organization developed from a body of work called systems thinking.[7]
This is a conceptual framework that allows people to study businesses as bounded objects.[6]
Learning organizations use this method of thinking when assessing their company and have
information systems that measure the performance of the organization as a whole and of its
various components.[7] Systems thinking states that all the characteristics must be apparent at
once in an organization for it to be a learning organization.[6] If some of these characteristics
are missing then the organization will fall short of its goal. However, O'Keeffe[3] believes that
the characteristics of a learning organization are factors that are gradually acquired, rather than
developed simultaneously.

2-Personal mastery.

The commitment by an individual to the process of learning is known as personal mastery.[6]

There is a competitive advantage for an organization whose workforce can learn more quickly
than the workforce of other organizations.[8] Individual learning is acquired through staff
training, development and continuous self-improvement;[9] however, learning cannot be
forced upon an individual who is not receptive to learning.[6] Research shows that most
learning in the workplace is incidental, rather than the product of formal training,[3] therefore
it is important to develop a culture where personal mastery is practiced in daily life.[6] A
learning organization has been described as the sum of individual learning, but there must be
mechanisms for individual learning to be transferred into organizational learning.[8]

3-Mental models.

The assumptions held by individuals and organizations are called mental models]To become a
learning organization, these models must be challenged. Individuals tend to espouse theories,
which are what they intend to follow, and theories-in-use, which are what they actually
do.Similarly, organizations tend to have 'memories' which preserve certain behaviours, norms
and values. In creating a learning environment it is important to replace confrontational
attitudes with an open culture that promotes inquiry and trust.To achieve this, the learning
organization needs mechanisms for locating and assessing organizational theories of action.
Unwanted values need to be discarded in a process called 'unlearning'. Wang and Ahmed refer
to this as 'triple loop learning'.

4Shared vision.

The development of a shared vision is important in motivating the staff to learn, as it creates a
common identity that provides focus and energy for learning. The most successful visions build
on the individual visions of the employees at all levels of the organization, thus the creation of a
shared vision can be hindered by traditional structures where the company vision is imposed
from above.Therefore, learning organizations tend to have flat, decentralized organizational
structures. The shared vision is often to succeed against a competitor;[8] however, Senge states
that these are transitory goals and suggests that there should also be long-term goals that are
intrinsic within the company.

5-Team learning. The accumulation of individual learning constitutes team learning.The benefit
of team or shared learning is that staff grow more quickly and the problem solving capacity of
the organization is improved through better access to knowledge and expertise. Learning
organizations have structures that facilitate team learning with features such as boundary
crossing and openness.[Team learning requires individuals to engage in dialogue and
discussion;therefore team members must develop open communication, shared meaning, and
shared understanding. Learning organizations typically have excellent knowledge management
structures, allowing creation, acquisition, dissemination, and implementation of this knowledge
in the organization.