Management of an organization is the process of establishing objectives and goals of the organization periodically, designing the work system and the organization structure, and maintaining an environment in which individuals, working together in groups, accomplish their aims and objectives and goals of the organization effectively and efficiently (Narayan Rao). (3rd December 2008, Version 1 of this article)
MAJOR TASKS OF MANAGEMENT:
1) To decide the purpose and mission of organisation.
2) To make work productive.
3) To manage social impacts and responsibilities. (management principles and guidelines- Thomas n.duening ) ( mgt 1992 )
The definition implies the following.
(i) Management is a process.
(ii) Management applies to every kind of organization, government, profit making, or non-profit making.
(iii) It applies to managers at all levels in the organization.
(iv) Management is concerned with effectiveness and efficiency. Effectiveness is producing the product or service the customer wants in business context with the required functional benefits and product attributes at the price he is willing to pay. Efficiency is minimization of resources to produce the saleable output. (ARTICLE IN MANAGEMENT 1 )
WHY STUDY MANAGEMENT THEORY ?
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Theories are perspectives with which people make sense of their world experiences. Formally, a theory is a coherent group of assumptions put forth to explain the relationship between two or more observable facts. John Clancy calls such perspectives " invisible powers " to emphasize several crucial uses of theories.
SIGNIFICANCE OF THEORIES :
1) Theories provide a stable focus for understanding what we experience , it provides criteria for determining what is relevant.
2) Theories enable us to communicate efficiently and thus move into more and more complex relationship with other people.
3) Theories make it possible and challenge us to keep learning about the world.
( MGT 648 ) ( JAMES A.F STONER - MANAGEMENT )
MANAGEMENT IS A DISCPLINE:
If you are majoring in management, you are referring to the discipline of management. Basically classifying management as a discipline implies that it is an accumulated body of knowledge that can be learned. A management is a subject with principles, concepts and theories. A major purpose of studying management is to learn how to apply these principles, concepts and theories at the right time and under the right circumstances to produce desired results. (Thomas n. duening - management principles and guidelines) ( mgt- 1992)
EVOLUTION OF MANAGEMENT:
Management and organisations are products of their historical and social times and places. Thus, we all can understand the evolution of management theory in terms of how people have wrestled with matters of relationships at particular times in history. (Management - James a. f stoner) ( mgt 648)
The first known management idea was recorded in 5000 B.C when Sumerian traders developed written records for government and commercial use. The application of management is also evident in the Egyptian civilization as early as 4000-3000 B.C. The pyramids of Egypt and the Great Wall of China are the testimonials of a coordinated effort on an extremely large scale. Creation of such huge structures would have certainly required extensive planning, decision- making, organising men and materials and supervision. The codification of management thought got a boost with the spread of Arabic numerals between the 5th and 15th centuries and the development of double-entry book keeping.
EARLY WRITINGS ON MANAGEMNT:
Works of several writers in the area of governance of kingdom and man management created a literature that assisted in the development of modern management theories. Some early writings that subsequently influenced the development of managerial thought are described below:
SUN TZU'S THE ART OF WAR: This book on military strategy was written by Chinese general sun Tzu in the 6th century BC. The book recommends that success can be achieved by being aware of utilising the organisation's strengths and utilising them to exploit the weakness of the rival or enemy. The book emphasises the importance of discipline in order to get the things done through a coordinated group effort.
CHANAKYA ARTHASHASTRA: This treatise lays down the principles that should be taken into considerations by a leader while making the policies of governance, people management, the importance of creation of departments and the development of the detailed job profiles.
EFFECT OF INDUSTRIAL REVOLUTION ON MANAGEMENT:
Always on Time
Marked to Standard
The substitution of human power with machine power made it possible to manufacture goods in large numbers in factories more economically. The growing size and complexity of business organisations led to the requirement of managers to produce goods in an efficient and profitable manner and to handle various business-related tasks. To enable manager's discharge their multifarious activities, the need to develop literature on management practices was felt and thus scholars responded to this need by producing premier literature management.
18 TH CENTURY MANAGEMENT LITERATURE
(a) THE WEALTH OF NATION BY ADAM SMITH: The greatest contributions to management thought occurred during and after the 18th century. Renowned economist Adam smith in his management classics, THE WEALTH OF NATIONS ( 1776), described the economic advantages that can be deprived from the division of labour and the break-down of jobs into narrow and repetitive tasks and this led to the job specialisation.
(b) Innovators like Eli Whitney ( 1765-1825 ), James watt (1736-1819) and Matthew Boulton (1728-1809) developed elements of technical production such as standardisation, quality control procedures, cost accounting and work planning. These works helped the managers to perform their roles in an efficient and effective manner.
19 TH CENTURY MANAGEMENT LITERATURE
Economist john stuart mill (1806-1873) provided a theoretical background to resource allocation, production and pricing issues in the 19th century. By late 19th century, economist such as Leon walras, Alfred marshall and others succeeded in providing a theoretical background for further development in the 20th century.
Robert Owen (1771-1858) made the first social experiment in managing others by instituting performance enhancing interventions, like performance evaluation system, incentive-based pay system, safer working conditions and helping workers to acquire housing for themselves. In 1881, joseph Wharton becomes the first management scholar to offer a tertiary-level course in management.
20 TH CENTURY MANAGEMENT LITERATURES
The first major step toward developing a systematic managerial text was undertaken in early 1900s by the practising managers. They developed their theories on how to perform the managerial role on the basis of their practical experience.
The first textbook on management was written by J.Duncan in 1911. The discipline of management got a strong foundation when Harvard university became one of the first American university to offer a graduate degree in business management in 1908.
Scholars like Ordway tead(1891-1973), Walter Scott applied the principles of psychology to management in second quarter of 20th century.
Around world war 2, H.Dodge and thornton c.fry introduced mathematical and statistical techniques into management studies to give the management a more quantitative and scientific basis. Patrick blackett combined the statistical theories with microeconomic theory in 1940s, and laid the foundation of operation research in the "management science" to optimally solve management problems in the areas of logistics and operations.
Management literature in its present form is both a reflection of and a reaction to different management theories and approaches developed over a period of a time. These theories and approaches have their own share of useful application as well as limitations because no single theory or approach can capture multi-faceted discipline of management in it's entirely.
MANAGEMENT THOUGHT :
Academicians and practitioners from different eras focused on and wrote and about what they believed to be relevant aspects of good management practice. The schools of management thought are theoretical frameworks for the study of management. Each of the schools of management thought are based on somewhat different assumptions about human beings and the organizations for which they work. Over time, management thinkers have sought ways to organize and classify the voluminous information about management that has been collected and dispersed. These attempts at classification have resulted in the identification of management schools such as :
1) CLASSICAL SCHOOL
2) BEHAVIOURAL SCHOOL
3) MANAGEMENT SCHOOL
4) SYSTEM SCHOOL
5) CONTINGENCY SCHOOL (http://www.enotes.com/management-thought-reference/management-thought)
1 CLASSICAL SCHOOL :
The classical school is the oldest formal school of management thought, which started around 1900 and continued till 1925. This school is mainly concerned with increasing the efficiency of workers and organizations based on management practices. The classical management theory developed from efforts to find the "one best way" to perform and manage tasks. The classical school looks for universal principles of operation in the striving for economic efficiency. Important pioneers of the classical school are F.W. Taylor, Henri Fayol, Max Weber, and Mary Parker Follett. ( management principles,process and practise- mgt 2298) ( anil bhat, arya kumar )
The classical theory is based on the following three assumptions:
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1. The relationship between employees and management is defined by means of formal
structured communication process, defined tasks, defined accountability, and formalized
procedures and practices to avoid any conflict in their relationship.
2. Workers have been treated as economic man who can be motivated by means of money only.
3. The third assumption is that the workers have been considered as a product of means of production or as a cog in the wheel. (http://www.eurojournals.com/IRJFE_41_06.pdf )
The classical school includes scientific, bureaucratic and administrative management.
Scientific management focuses on the "one best way" to do the job.
In Taylor's (1911) book, The Principles of Scientific Management, he discussed what he called a struggle for control of production between management and labour. To control production, he developed methods for the measure and design of machining methods as part of a general plan for increasing the planning functions of management. (http://www.engr.sjsu.edu/pabacker/scientific_mgt.htm)
The Principles of Scientific Management, in which he described how the application of the scientific method to the management of workers greatly could improve productivity. Scientific management methods called for optimizing the way that tasks were performed and simplifying the jobs enough so that workers could be trained to perform their specialized sequence of motions in the one "best" way.
The theory of bureaucratic was designed by max weber (1864-1920), he conceived of a bureaucracy as a smooth functioning, highly efficient machines where each machine is exquisitely tuned to perform its function. According to weber, organisation to be arranged clear, hierarchical structures where each individual's role is well defined. In Weber's bureaucracy, people hold jobs based on their qualification and the managers should be controlled by rules and standard operating procedures (SOP). Weber believed that bureaucratic structure would also create a more harmonious and joyous workplace. ( mgt 1992 )
MANAGEMENT SCIENCE APPROACH:
This approach emerged during World War 2. It emphasises the use of quantitative techniques of mathematics and statistics to aid managers in making optimum decisions. A wide variety of mathematical models have been developed by management scientists for making rational decisions and they also help in developing optimum solutions. A famous economist Patrick Blackett combined the statistical theories with microeconomics theory in 1940, and laid the foundation of operations research in the "management science".
This approach is very useful in select areas of management like inventory management, warehousing, transportation and assigning of manpower where a logical process can be applied to developed optimum solutions.
But this approach fails to provide solutions for the areas with high level of human element, like leadership, motivation etc.
I would like to say that management is not a pure science and hence cannot be completely modelled for all types of situations.
This approach, propagated in the early 1960, believed that organisation is an open system and its components are interrelated and interdependent, which are functioning as a whole. Business is composed of inputs transformed into finished goods , output of these finished goods offered to the environment and feedback taken.
According to this approach, an organised enterprise cannot exist in isolation, rather it is dependent on its external environment, it is a part of larger systems such as the industry, the economic system and the society to which it belongs.
The system theory focuses on the design of the whole system as distinct from the design of its components or subsystems. The system approach believes that the total effect is greater than the sum of the effects of the part taken independently.
The advantage of the system approach is that it lays emphasis on the interdependencies and interactions of systems and subsystems.
This approach studies the organisation at a philosophical level.
This approach treats all organisations as same.
It fails to bring in any new or innovative techniques into the field of management.
The contingency approach emerged in mid-1960s. This approach assumes that the managerial behaviour is dependent on a wide variety of elements.
The contingency approach emphasises the development of an appropriate fit between organisational processes and the characteristics of situation because there is no one best way to handle any management problem.
According to this approach, the behaviour of one subunit is dependent on its environment and its relationship with the other sub-units that have some control over the sequences desired by that sub-unit.
It stresses that there is no one best way of doing a thing. The conditions of contingency will determine which technique would be more suitable.
Managerial policies and strategies can be made more effective by adjusting them to the changes in the environment.
The approach fails to give one particular answer to a problem.
It requires a lot of creativity and thus can be very complex. (MGT-2332--- KARMINDER GHUMAN )
A behavioural approach is a management approach that emphasizes people and how the structure of an organization affects their behaviour and performance. The behavioral management theory is often called the human relations movement because it addresses the human dimension of work. Behavioral theorists believed that a better understanding of human behavior at work, such as motivation, conflict, expectations, and group dynamics, improves productivity.
The behavioural approach to management has two branches. The first is the human relations and second is the behavioural science approach.
THE HIMAN RELATIONS APPROACH
The term human relations refer to the manner in which mangers interact with subordinates. To develop good human relations, managers must know what psychological and social factors influence their subordinates. Human relations followers believe that management should recognize employees need for recognition and social acceptance.
Therefore, managers must be trained in human relation skills as well as technical skills.
THE BEHAVIORAL APPROACH
The behavioral approach concentrates more on the nature of work itself, and the degree to which it can fulfil the human need to express skills and abilities. Behavioral scientist believes that an individual is motivated to work for many reasons like to make money and making forming social relationships. These include recognition, making meaningful contributions to society or personal fulfilment.
Thus managers needed to act more from their knowledge of human behaviour than from their formal authority.
A research study conducted between 1924 and 1932 at the Hawthorne works of the western electric company helped to lend credence to the behavioral approach to management theory. The researchers found that whether they raise or lower the level of illumination , productivity increased and productivity only dropped when the level of illumination dropped so low that workers could no longer see well enough to perform their work. Researchers didn't expect these results and to understand the finding of the research, the investigators recruited Elton mayo, in his experiment he find that the presence of the researchers was effecting the results because the workers enjoyed the attention and produced the results they believed the researchers wanted.
The effect of increased productivity due to increased attention has come to be known as the Hawthorne effect. Management theorist indicated that workers attitude towards their managers affects the level of their performance.
FUNCTIONS OF MANAGEMNT
Henri Fayol (1841-1925) was the 1st to describe the 4 functions of management when he was CEO of large mining company in later 1800. The functions of management uniquely describe managers' jobs. The functions of management define the process of management as distinct from accounting, finance, marketing, and other business functions. All the management concepts, principles, theories and techniques can be grouped under the functions.
The process of management can be better understood by breaking it down into the four basic functions of a manager which are :
Staffing ( ENOTES.COM) http://www.enotes.com/management-functions-reference/management-functions
Planning encompasses defining the organizations objective or goals, establishing the overall strategy for achieving those goals, and developing a comprehensive hierarchy of plans to integrate and coordinate activities. (mgt-2498)
The need for planning arises when a business venture is undertaken and the success of organisation throughout its lifetime depends on the thoroughness of the business plan and its execution.
Planning is an exercise that determines in advance:
The ends (what is to be achieved? )
The means (how it is to be done?)
The timing (when to do what?)
The responsibility and accountability (who should do what?)
The reason (why it should be done?)
CHARACTERISTICS OF PLANNING
The following are the characteristics of planning which are essential for every organisation to survive and grow in the dynamic environment:
Planning is a primary function of management.
Planning is a goal - oriented.
Planning is future - oriented and involves forecasting.
Planning is an intellectual process.
Planning needs to be dynamic in nature.
IMPORTANCE OF PLANNING
It is very important to have a planning because without planning, it becomes very difficult to understand the appropriateness of proposed actions and determine what is right or wrong. The consequences of the neglect of planning are there for everyone to see like huge time, cost over-runs and poor quality.
The advantages of planning can be understood by the following points :
A holistic picture of consequences.
No haphazard actions.
Economy in operations.
Promotion of teamwork.
Provision for control.
LIMITATIONS OF PLANNING
The planning process has to deal with many obstacles and constraints. Some of the drawbacks and limitations are:
Lack of accurate information.
Time consuming process
The word "organise" means placement of ideas, objects or people in a correct order so that are easily available for use when required.
The organising function represents all those activities that result in the formal assignment of tasks, authority and responsibility to groups and individuals and establishing coordination among them for achieving the goals and objectives of the organisation in an effective and efficient manner. The deployment of organisational resources is reflected in the division of labour into :
Specific departments and jobs
Normal lines of authority.
Mechanisms for coordinating diverse organisations tasks.
CHARACTERISTICS OF ORGANISING
Specialization and division of work
Orientation towards goals
Composition of individuals and groups
IMPORTANCE OF ORGANISING:
The basic purpose of the organising function is to ensure the best possible utilisation of organisation resources to achieve its goals and objectives.
The importance of organising from the following benefits that it leads to is:
Arrangement of positions and jobs in the form of an organisation structure presents a clear hierarchy of roles and responsibilities.
It facilitates the attainment of organisational objectives through optimum utilisation of different resources.
Classification of work and assigning it to different departments helps in bringing specialisation in managerial functions.
Organising is used as a strategy and a tool by organisations to improve the effectiveness and efficiency of their operations.
LIMITATIONS OF ORGAISING
As each function is separate and each departmental head is concerned with the performance of his department, conflicts may arise and the overall objectives of the organisation suffer.
In large functional organisations, taking quick decisions & coordination becomes difficult
It becomes difficult to hold a particular department accountable if any problem arises.
The success of majority of nations and organisations depends upon the quality of their leadership.
The word "leadership" has come from the word "lead". The term to lead has two meanings, firstly "to excel or to ahead" and "to guide, govern and command others or to head an organisation".
Leadership is the art of motivating the employees, directing the activities of the employees, resolving the conflicts between the employees and this all results towards the achievement of the group goals effectively and efficiently.
CHARACTERISTICS OF LEADERSHIP
Attainment of group goals
Changing the status-quo
Ability to influence the followers thoughts and actions
Situational or contextual leadership
Motivating the followers and making them confident
Self-confidence and emotional stability
IMPORATNCE OF LEADERSHIP
Leadership has become significantly important for the corporate sector. Leaders have not only to show the way but also to lead their followers on it. An organisation performance is a reflection of its leadership and this all reflects how much leadership is important.
The following attributes highlight the importance of leadership:
Controlling function refers to the process of measuring the actual performance against the established standards and then correcting significant deviations. The controlling function is used to ensure that the performance is in line with the established standards and it also ensures that the organisational objectives are achieved by implementing the plans devised to attain them.
Control refers to checking the current performance against predetermined standards contained in the plans to ensure adequate progress and satisfactory performance.
Controlling has two basic purpose:
It facilitates coordination
It helps in planning
CHARACTERISTICS OF CONTROLLING
The control system must be designed properly so that they are effective in ensuring that the controls are applied by the right level and at the right time. The characteristics of effective control system are as follows:
Establishing right standards
Guide for measurement
Realistic and flexible
Reflecting organisational pattern
IMPORTNACE OF CONTROLLING
The continuous flow of information about projects keeps the long range of planning on the right track and It helps in taking corrective actions in future if the performance is not up to the mark.
Control function guides the management in achieving pre-determined goals.
Controlling helps in coordination through unity of action.
Controlling system helps in improving the organisational efficiency.
Controlling helps in taking future course of action whenever there is deviation between standard and actual performance.(dailyojo.com) http://dailyojo.com/articles/what-is-the-importance-of-control-in-business.html
The control process in an organisation setting comprises the following steps:
Establishment of standards for performance
Comparing performance against standards
Developing a report
Taking a corrective action