The Meaning of Management in Enterprises

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Management can be defined as creating the internal environment of an enterprise where individuals working together in groups can perform efficiently and effectively towards the attainment of group goal.

In the words of James L. Ludney, "Management is principally a task of planning, coordinating, motivating, and controlling the efforts of others towards a specific objective."

Management has effect on performance in the way that it affects the way people observe their work and how they actually perform the work.

Management functions are also inter-connected and overlapping.

Frederick . W . Taylor (1856-1915,Philadelphia)

Frederick Winslow Taylor was born on 20th March in the year 1856 in Germantown, Philadelphia, Pennsylvania . He was second of the three children of the Taylor family. Mr. Frederick Taylor was an American Mechanical Engineer who always aimed to improve industrial efficiency & was also known as the Father of Scientific Management and is also regarded as one of the first most successful management consultants. He is very well known also when it comes to his Time & Motion Study & the Piece Rate system that he introduced.

In the year 1911, he published "The Principles of Scientific Management", it is one of the best work accepted worldwide.

Elton Mayo (1880-1949)

Elton different tracks - workers 'logic of sentiment', managers motivated by 'logic of cost and efficiency'. Conflict was going to arise in such situations. Studying on new area Mayo was one of the key figures involved in Hawthorne Studies and his work put the foundation for the many later management and organisational thinking.

He researched in areas of motivation and commitment and worker - management relations. "the relation of working groups to management was one of the fundamental problems of ...industry."

He pointed to the importance of communication between management and the workers and mentioned the recent thoughts, that work satisfaction lay in recognition, security, and sense of belonging, rather than monetary rewards. Communication between managers and workers was the key - because of the problems caused when they didn't communicate well, he highlighted the understanding the need of individual's reactions and requirement for managers to have respect towards their staff and workers.

Management As A Science:

Although management as a discipline has some of the features of science but management is not an exact science as physics and chemistry. It deals with the behavior of human beings so it is a social science. According to Keynes "Science is a systematized body of knowledge which establishes relationship between cause and effect."

In order to be called as science, a subject should have the following characteristics:

A organized body of knowledge including concepts, principles and theories.

It should establish cause and effect relationship.

Methods of inquiry should be scientific.

Principles should be variable and universally acceptable.

Similar to other social sciences, management is also connected with human beings and it is not an exact science like physics or chemistry. Although inexact, management like social science is based on systematized body of knowledge; its practice depends on cause and effect relations and not on personal likes and dislikes of managers. Principles of management as in the case of science are derived from observations and experiments.

In early 20th century, Henry Fayol formulated following fourteen principles of management:

Division of work & responsibility Parity of authority


Unity of command Unity of direction Order

Subordination of individual interest to general interest

Fair remuneration of employees

Centralization and decentralization

Scalar chain

Stability of tenure of personnel Initiative

Esprit de Corps Equity

Concept introduced by Frederick Winslow Taylor, Scientific Management was a systematic method to optimize the way in which tasks were performed leading to an improvement in the productivity of labor. As Taylor had once said, " In the past man must have been first. In the future the system must be first" [ (source : ppt. page 5] .

The scientific method gives a rational structure for analyzing troubles. It essentially aids to define the problem, collect data, analyze/study the data, improve options, and choose the best option. Taylor was of the view that if the scientific method would be practiced then it would result in an efficient way of performing work. He believed that the practice of scientific management would be of advantage to both the employee and the employer via generation of larger surplus that would result in generating more income for the organization.

Principles of scientific management

The principles of scientific management according to F. W .Taylor were :


Taylor considered that simplification in work can be brought in scientifically. The Rule of Thumb was not a proper method of working out the problems. In the early years of Industrial Revolution, factory managers depended more on personal judgment in attending the problems they came across for want of proper theory of factory management . This is what is referred to as 'Rule of Thumb' . Therefore we come to this conclusion that Rule of Thumb is nothing but just a shortcoming as different managers have different thinking and a different approach to situations and problems which might not be so effective.


The factory structure of production points out that managers are mediators between the owners and the workers. Managers have to make sure to 'get work done' by the workers which has a possibility of a arguments between managers versus the workers. Therefore Taylor acknowledged this problem and concluded that neither workers not the management would benefit from this. Thus, he stressed that there should be complete synchronization between management and its workers. Both should understand that each one is important.


Taylor was of the view that instead of self interest there should be complete cooperation between labor and management. This principle is like an extension of 'Harmony, not discord'. Cooperation should replace competition. Both should realize that they are complimentary to each other. In this case, management should hear to suggestions given by employees. They should be rewarded for productive thoughts that provides economies of cost.


Scientific management has always voted for worker development. According to Taylor, training was essential to learn the 'best method'. He believed that employees must b selected scientifically so that the work assigned should suit his/her physical, mental or intellectual capabilities .


As we know that management is inexact science and deals with human & organizational behavior therefore it is essential to study these aspects of management.

Organizational behavior is the study of knowledge about how people as individuals and as group act within organization. It strives to identify ways in which people can act more effectively. It is an applied science about effective practices in an organization.

Organizational behavior provides a useful set of tools at many levels of analysis. For example, it helps managers look at the behavior of individuals within an organization. Most sciences share four goals - to describe, understand predict and control some phenomena.

Four goals of organizational behavior are to describe, understand, predict and control.

Key forces affecting organizational behavior are people, structure, technology and environment.

Human Relations Management

Originally Human Relations (or HR) was initiated by Elton Mayo as a result of Hawthorne experiments in which Mayo argued representing the insufficiency of economic incentives of workers. After the Hawthorne experiment, Mayo disputed that the workplace environment was too economic and it failed to meet the social and emotional needs of workers that resulted in uncertain labor relations leading to overall inefficiency. The study of Hawthorne experiments and human relations made possible for Mayo to make certain inferences on how managers should behave in an organization. Through the development of human relations Mayo believed that:

Managers should be aware of these 'social needs' and cater for them to make sure that employees collaborate with the organization officially rather than working against it .

Individual workers cannot be treated in isolation, but must be treated as members of the group.

Good working conditions and monetary incentives are not as important as the need of belonging to a group.

Informal groups formed at work strongly influence the behavior of those workers in a group.

The classical school of management established by Fredrick Taylor and Henri Fayol spotlighted on principles of management, scientific selection and training, remuneration etc the human relations method stressed behavioral issues such as job satisfaction, group norms, supervisory style.

Theory X and Theory Y

These are concerned with two sets of belief about human behavior and nature that are concerned with the practice of management. Theory X tells a negative of human nature and theory Y represents positive view of human nature.

In 1950s, Douglas McGregor (1906-1964), a psychologist who taught at MIT, disparaged both the classical and human relations schools as insufficient in practical terms. He thought that theories followed by both the schools showed a negative view of human nature and that another theory with different assumptions was required.

McGregor drew upon the work of Abraham Maslow (1908-1970) to explain why Theory X assumptions led to ineffective management. Maslow argued against Maslow's proposition that needs are arranged in levels in that safety and physical needs at the bottom because he believed that most employees already had their physical and safety needs met and management needs to provide the upper needs to be met in the workplace. McGregor believed that theory Y assumptions would make management more effective. He stated different approaches like decentralization of decision making authority, delegation and participative management.


Scientific management gave stress to concern for task (output) i.e. it regarded a basic unit as individual worker of the organization.

While the Human relations management stress on need for relationships (people) i.e. informal group was the basis of the organization.

In case of scientific management, the role of a leader is to lay down work criteria and apply them on workers and the leader is considered as a symbol of high authority. In Human relations management, the work of a leader is to ease cooperation and coordination among the employees while giving opportunities and help for their 'personal growth and development'. The leader is also to be seen as an ' agent for intra and inter group communication"

'Informal groups' were avoided by Taylorism whereas human relations movement supported their extension. This is because Taylorism showed a worker as mechanical, passive, and a basic unit of the organization whereas the human relations movement believed that the continuance of such informal groups would provide the cooperation and communication among members and would assist in achieving organizational goals.

Workers under scientific management are treated as 'human machines'. 'Differential system' is used for motivating them. Workers contentment is the main aim of human relation management. According to human relations management, satisfied workers are charged workers and therefore effective workers.

According to Taylor , The 'Rule of Thumb' method of quantify work, failure on the part of management in addressing the workers to full efficiency, and workers curb on output in order to protect their interests were seen as difficulty to maximum productivity. According to Mayo, to attain maximum productivity, the organization must try to understand and respect the emotions, sense of recognition and satisfaction of the workers non-monetary requirements.


Though both, the scientific school of thought and the behaviorist/human relations school of thought were so different from each other in their approach, they shared a common goal - 'increased productivity'. Both strive for organizational excellence through increased efficiency. This excellence can be achieved in either of the two ways or both the ways. Thus, scientific management and human relations management can be portrayed as complimentary or none is superior to the other.