POM - Unit 1
POM - Unit 1
The term management can be shattered into three words- Manage, men, tactfully. Itmeans in management; the
organization have to tactfully manage the workmen so that they can reach to the organizational goal effectively.
Management can be defined as a process of getting things done through peoplewith the help of resources for
achieving the goals of an organization in an efficient and effective manner. It includes planning, organizing,
staffing, directing andcontrolling. Management focuses on getting maximum outcome by optimum resources
allocation.
Here are some definitions by different theorist, they are as follows:
Henri Fayol stated: "To manage is to forecast and to plan, to organize, to command,to co-ordinate and to control”.
Mary Parker Follett defined "The art of getting things done through people".
George R. Terry defined management as “Management is a distinct processconsisting of planning, organizing,
actuating and controlling performance to determine and accomplish the objectives by the use of people and
resources”
E.F.L. Brech specified that “Management is concerned with seeing that the job getsdone, it tasks all centre that
on planning and guiding the operations to it are going on the enterprise.”
S. George said “Management consists of getting things done through others. Manager is one who accomplishes
the objectives by directing the efforts of others.”
Nature/ Characteristics of Management
• Goal-oriented: Organization has predetermined goals which are to beaccomplished using minimum
resources in the best possible way.
• Continuous Process: Management is an ongoing process which continues tillthe company exists.
• Pervasive: Management is present everywhere whether it is small, medium or large-scale organization. It is
needed in all stages or levels of organization.
• Multidimensional: Management is a multidimensional activity as it includesmanaging people, capital, and
machineries.
• Management as Group Activity: Management prefers group performance rather than individual
performance for achieving organizational target adequately.
• Dynamic Function: Organizational activities are greatly influenced by internal and external factors. So,
they have to change and adopt new itself according to changed environment.
Theories of Management
Classical theories of management: During the late 19th century and early 20th centuries, new frameworks and
approaches of management emerged whose primary focus was on efficiency and productivity. These theories
formed the bases for formal structures of organization.Amongst all the classical theories of that time Taylor’s
Scientific Management Theory, Fayol’s Administrative Theory and Weber’s Bureaucratic Theory are threeof the
major classical theories of management.
1. Scientific Theory of Management: Frederick Winslow Taylor developed the scientific theory of
management in the late19th and early 20th century in order to improve the efficiency of the industries. He
chose to study them systematically and began optimizing the work process to improve the industrial
efficiency. Listed below are the components of Taylor’s scientific management theory:
• Scientific Job Analysis: Taylor advocated the idea of study each job in detail inorder to perform it. He
negated the idea of going with the flow or “Rule of Thumb” and insisted breaking down tasks into
smaller, simpler steps and put timestamps on them.
• Selection and Training of Workers: Taylor focused on the importance of selecting the appropriate
worker according to the job. These workers must possess the required skills and abilities for the job at
hand. He also proposed thatproper training must be provided to these workers in order to ensure they are
performing their tasks efficiently.
• Standardizing Tools and Procedures: According to Taylor, only having the required skills and abilities
was not enough. The workplace must be equipped with standardized tool and equipment along with a
proper work method in orderto achieve efficient performance consistently.
• Division of Labor: In his theory Taylor advocated for proper division of labourbetween the workers and
the management. He proposed that the primary role ofmanagers was to plan and organize the work that
needs to be done while the mainfocus of workers would be on executing those tasks. By doing so, he
wanted to ensure that each group know their job well and they could specialize and performtheir roles
more effectively.
• Time and Motion Studies: Taylor opted to conduct time and motion studies in order to identify the
most efficient ways to perform the tasks. Observing and recording the time taken for each element of a
job was important in order to redesign the job to eliminate unnecessary movements and reduce the time
required.
• Incentive Systems: In order to motivate the workers, Taylor implemented the incentive systems. The
intention was to encourage higher productivity andefficiency amongst the workers. Taylor’s proposal
involved differential piece- rate systems wherein workers were paid extra for meeting goals or exceeding
performance standards.
• Functional Foremanship: The concept of functional foremanship wasintroduced by F.W. Taylor.
He proposed that instead of a single supervisor overseeing all aspects of work being responsible for
the same, multiple specialistswith varied expertise must be brought in for different function. This
was done with the intension of improving the overall efficiency and effectiveness of the industry
and the workers.
The scientific theory of management by Taylor had a great impact on industrial practices. Its
significant increased productivity and efficiency in many industries. But since the primary focus
was on mechanical efficiency, at the expenseof human and social factors, the scientific theory faced
backlashes. It was criticizedfor dehumanizing workers by ignoring their need for creativity, job
satisfaction, and well-being. In spite of the criticism that came its way, Taylor's scientific theory of
management build the framework for the modern management practices. Many of its principles,
such as process optimization and the use of data to drive decision- making, are still relevant.
A French mining engineer and management theorist, Henri Fayol developed a theoryof management
that became the foundation and framework of modern managementpractices. His theory is based
on his experiences as a managing director. While at work, he observed how an organization
functions effectively. Following are the principles he wrote in his study that is popularly known
as Fayol's 14 Principles of Management:
• Division of Work: Having specialization on certain areas, allows workers to bemore efficient.
Working on niche areas of expertise increases the proficiency of the workers in their jobs leading
to increased productivity.
• Authority and Responsibility: Managers must take on the responsibility for theproper functioning
of the organization by having the authority to give orders. Both authority and responsibility are a
part of manager’s job and they must perform them both equally.
• Discipline: An effective leadership can lead to good discipline within the organization. It is
essential that all individuals working in the organization must obey and respect the rules of the
organization. Fayol believed good discipline canbe achieved through effective leadership, clear and
fair agreements and using penalties judiciously.
• Unity of Command: Fayol proposed that a subordinate must receive orders fromonly one superior
as he believed this would help avoiding any kind of confusionor conflicts in instructions and
information.
• Unity of Direction: Fayol advocated that, in order to guide its workers and managers, an
organization must have only a single plan of action. He believed that this would clearly state the
primary objective of the organization and wouldhelp every individual work towards the same
organizational goal.
• Subordination of Interests: Fayol proposed that the goal of the organization must have the centre
stage. Under no circumstances, can the interests of an individual or group of individuals be put
before the overall goals and interests ofthe organization.
• Remuneration: Fayol argued that workers must be paid in accordance of the services they provide
the organization. He insisted for fair compensation that is satisfactory to both employees and the
employer, because he believed it would motivate and encourage them giving their all for the job
while will lead to high productivity of the worker.
• Centralization: Centralization stands for those structures if organizations wherein the power,
control and authority to make decision are in the hands of theindividuals or a small group at the
uppermost level of hierarchy. Fayol stated that the organization must determine the degree of
centralization or decentralization on the basis of circumstances and instances.
• Scalar Chain: Scalar chain is the line of authority that runs from the top-tier of the management
to its lowest positions. Fayol stated the hierarchy levels must beclear and under no circumstances,
can it be broken. In case of urgency, horizontalcommunication can occur in order to increase the
efficiency, but all the individuals working in the organization must communicate by following the
chain.
• Order: In order to ensure efficient use of resources, it is important that there should be a place for
everything and everything should be in its place. Fayol insisted to apply this to both materials and
people.
• Equity: Equity helps to build loyalty and devotion from employees. Fayol advocated that in order
to get things done, managers mustn’t forget humanities. They should be kind to their subordinates
and their judgements must be fair.
• Stability of Tenure of Personnel: Fayol proposed that providing job security and career
development opportunities promotes loyalty amongst the lower-levelemployees in an organization
and improves their performances. He believed that high employee turnover in an organization
shows the inefficiency of the management and creates a bad reputation of the organization.
• Esprit de Corps: Fayol believed that, in order to have harmony and unity withinthe organization,
the organization must promote team spirits. He emphasized the importance of teamwork and
communication in achieving the primary goalsof the organization.
Alongside the 14 principles, Henri Fayol also proposed five primary functions of management that are
crucial for running operations in an organization efficiently:
• Planning: Planning helps in goal-setting as well as determining the best course of action for
accomplishing them. Planning involves interpreting the future courses and conditions of external
and internal environment of an organization by analyzing trends and thus making decisions
accordingly.
• Organizing: Following a structured framework in arranging resources for the tasks, is mandatory
in order to achieve the objectives of the organization. This also includes providing a foundation
for roles and responsibilities.
• Commanding: Leading and directing employees so that they efficiently perform their tasks is
essential for the organization’s growth. This involves propercommunication channels, motivating
the employees and leadership to provide guidance to the individuals or teams in accomplishing
their goals.
• Coordinating: Fayol stated that it is essential that all the departments of an organization must
work harmoniously in order to achieve the overall goal of the organization. This requires
synchronization of activities and resources to ensuresmooth operations within the organization.
• Controlling: Evaluation of progress is crucial to monitor the work done towardsachieving the
organizational goals. This requires setting standards for performances, measuring the
performances that actually gets done, providing constructive feedbacks and taking necessary
actions accordingly.
Fayol’s theory is valid till today and has a lasting impact on modern management practices. His principles
are taught today in business schools and are being followedin organizations around the globe.
3. Bureaucratic Management: Max Weber, a German sociologist, proposed the bureaucratic theory
of management. Weber emphasized on a structured and formal network of relationshipsamongst the
levels of hierarchy within an organization. He proposed this theory in response to what he found as
the inefficiencies and favoritism in a traditional management system. He advocated for a model
completely based off of accurately defined roles and responsibilities. His theory proposed following
a strict hierarchy and a set of rules and procedures in order to ensure consistency and efficiency.
• Formal Rules and Regulations: Weber proposed that an organization must havetheir own set
of rules, regulations and procedures to govern its employees. Theserules are curated to promote
consistency amongst employees and organization asa whole.
• Impersonal Relationships: Weber stated that personal preferences or relationships must not
come in the way of making decisions. Decision-making must be based on rules and rationality.
This helps to reduce favouritisms and ensures that all employees are being treated equally and
fairly.
• Specialization and Division of Labor: Weber believed in diving tasks into smaller, specific
roles. These roles are performed by individuals who possess therequired skills and expertise for
it. This specialization helps to increase efficiencyand effectiveness.
• Hierarchy of Authority: Weber advocated for a clearly defined hierarchy within the
organization. He insisted that each level of authority must have clearly defined roles and
responsibilities as this will ensure accountability and providesa clear chain of command.
• Formal Selection and Promotion: According to Weber, employees must be promoted on the
basis of their technical qualifications and performance. The merit system of selection and
promotion ensures that only qualified individuals occupy the positions of authority.
• Career Orientation: In a bureaucratic organization, employment is seen as a career with
prospects for advancement. Weber stated that employees must be
encouraged so that they develop and enhance their skills in order to get promotedwithin the
organization.
• Written Documentation: Weber advocated for keeping written records of all administrative
actions, decisions and rules as it will provide a clear understandingof the activities within the
organization and decision-making and will ensure transparency and accountability.
Weber’s theory proposed clear division of labor and specializing roles in order to increase the
productivity and efficiency. Having formal rules andprocesses ensures efficiency and effectiveness of the
decisions made. However, there were a lot of criticism regarding the bureaucratic theory of management.
This theory was often found extremely rigid and inflexible due to its strict adherence to rules and
regulation as it believed to decrease the motivation for creativity and innovation. The impersonal nature
of the bureaucratic organizations led to a lack of personal connection and motivation among employee
thus making them feel like a machine than individuals. Irrespective ofthat Weber's bureaucratic theory
has a significant influence on the development of modern organizational theory and management
practices. Many of its principles like clearly defined hierarchy are still widely used in both public and
private sector organizations.
Neoclassical theory: The Neoclassical Theory of Management is a human centered approach that focuses
on social and psychological aspects in the workplace, welfare of employees. The limitations of Classical
Management Theories made the emergence of neoclassical theory. Classical theories were focused on
efficiency, structured formal hierarchies that results in efficient output. While neoclassical theory gives
emphasis on human relation, benefit at workplace, morality, job satisfaction and motivational factors of
employees. Neoclassical theory focuses on following factors like-
• Informal Organization: The informal group is formed by the employees within the organization
which is based on personal relationship that influencework outcomes, employee behavior, and
overall organizational efficiency.
• Employee Motivation: Employees get motivated if their ideas, suggestions are valued. Gradually
their morality, loyalty will be enhanced if they are allowed to participate in vital activities like
decision making. All theseultimately improve the quantity and quality of production. Employees
also getmotivated when they are recognized, rewarded and empowered.
• Decentralization: Decentralization is a process where employees can participate in decision
making process and power is delegated to them. It is not concentrated only on the manager or
higher authority as in case of centralized and autocratic system.
• Communication: Healthy work environment can be made through positive interpersonal
communication. Open and transparent communication channels influence in this regard. It also
helps in proper circulation of information. It enhances cohesiveness among the team members.
Neoclassical Theory of Management can be broadly categorized intotwo main types which focuses on
human factors. They include:
• Human Relations Theory: - Human Relations Theory emphasized on interpersonal relationship,
employee’s well-being, social need, motivation. This theory identified that only monetary incentives
cannot always makes the employee motivated, non-monetary benefits also stimulate employees.
Human Relation theory was broadly described in Hawthorne study conducted by Elton Mayo.
▪ Hawthorne Studies: This study was introduced by Elton Mayo and his colleaguesin 1920s. He
focused on revealing the fact that productivity of employees not only depends on financial
incentives rather it is influenced by social factor, participation, attention workers receive from
management. This experiment was done in four phases, which are described below.
▪ Illumination Studies (1924-1927): This experiment was done to identify whether intensity of light
has an impact on productivity or not. For this workerare divided into two group where one group in
control room. The hypothesisof the experiment was that productivity will increase with increase in
intensityof light. However, it is found that productivity remain same in both the experiment and
control room. So it is concluded that illumination of light do not affect productivity, rather there is
some other factor that influence productivity.
▪ Relay Assembly Test Room Studies (1927-1932): This experiment was done with six female
workers focused on understanding the effects of various workconditions, such as rest breaks, work
hours, and incentives, on productivity and fatigue. It is found that productivity gradually changes,
regardless of changes in the variables. This experiment concluded that increase in productivity
was due to the social environment, sympathetic supervisor and the sense of importance and
participation the workers felt by being part of thestudy.
▪ Mass interviewing program (1928-1930): This interview session was done with 20,000
interviews. Initially the questions were related to companypolicies, supervision. But answers were
just “yes” or “no” which were not thatmuch helpful. So, the interviewers asked indirect questions.
From the responses it is seen that workers are more influenced by group behaviour.
▪ Bank Wiring Observation Room Study (1931-1932): This experiment wasdone by Elton Mayo
and W. Lloyd Warner with a group of fourteen workmen.The goal of the study was to understand
effect of informal groups on productivity within the workplace. The study revealed the presence
of informal groups and their setoff norm regarding productivity is more than that of formal
organization rules, incentives.
The experiment concluded that employees are not motivated by remuneration, incentives only. Rather
they get motivated through good working condition, interpersonal communication, good relation with
supervisor and management, informal group.
• Behavioral Theory: The Behavioral Theory of Management made insights of Human Relations
Theory by integrating social, psychological and anthropological factors to analyze impact of individual
and group behavior inorganizational productivity.
▪ Motivation Theories: Behavioral Theory assimilated various motivation theories, such as
Maslow's Hierarchy of Needs, McGregor's Theory X and Theory Y, Herzberg's Two-Factor
Theory to identify how motivation increase productivity.
▪ Leadership Styles: The theory comprehended different leadership styles such as democratic,
autocratic, participative and their out-turn on employee loyalty, morality, satisfaction, and
productivity.
▪ Organizational Behavior: It emphasized on understanding interpersonal communication,
individual differences, group dynamics, change management, organizational culture, decision
making, attitude, personality, perception.
• Modern Theory of Management: This theory is also known as contemporary management theory.
It encompasses a range of approaches that focused on market, economy, psychology, sociology. It
provides a holistic viewpoint which focuses on the function of organization as a whole. Some modern
management theories include:
▪ Systems Theory: This approach viewed organization as an open system that interact with the
environment, adapt changes and continuously improve itself for facing the competition. The
activities are interrelated and interdependent parts working together to achieve common objective.
This theory takes into account Input-Output model where inputs (e.g., resources, labor) from the
environment are processed to get outputs (e.g., products, services). This theory focuses on making
interconnectedness with its external environment and internal components. This system theory has
certain key concept:
✓ Open or closed system: -An open system is one which interact with external environment.
Close system does not interact with environment.
✓ Sub-system: -A system is made up of some parts which are called subsystem like departments
are the sub-system of an organization(system).
✓ Synergy: - It means whole is greater that summation of parts. It meansif all the departments
work together, it can make huge output.
✓ Input-output system: - Organization follows input-output process. Input includes raw
materials, manpower, technology and output meansproduct or service. Organization is a place
of converting input into output.
▪ Contingency Theory: Contingency theory depicts that there is no specific theory to run the
organization. Rather it depends on situations. One management style that suite one situation may
not be favourable for the other.Management practice wholly depends on organizational structure,
manpower,leadership style, working environment, technology. Management must have flexible
management functions which can align with the situation.
▪ Quantitative Management (Management Science): This approach focuseson mathematical and
statistical models to reach to a decision. Managers use several techniques to solve the problem
within organizations. It also helps in planning process, inventory modelling. Queuing theory is
also implemented which reduces customer waiting time.
▪ Management Information system (MIS): It is an information system that gather internal and
external data, arrange them in suitable format and is accessible to the managers. Managers use this
data to quickly identify alternatives, evaluate them and can make decision.
Functions of Management/ Elements of managerial Processes:
There is enough disagreement about the functions of management.According to Henri Fayol, management has
five functions viz. planning, organizing, commanding coordinating, controlling. Luther Gulick also mentioned
seven functions of management viz. planning, organizing, staffing, directing, coordinating, reporting and
budgeting (POSDCRB). For generalized purpose this function has been segregated to six classifications viz.
1. Planning
2. Organizing
3. Staffing
4. Directing
5. Coordinating
6. Controlling
▪ Planning-Planning is the fundamental activity of any management process. It is a kind of blueprint
of activities that employees have to perform in order to achieve the goal. It develops short and long-
term objectives, strategic actions formulate policies, procedures, rules and regulations of the
organization.
▪ Organizing- It is a process of assembling activities for achieving organization’s goal. It includes
identification of work, grouping those works, delegating authority,assigning job responsibility to its
employees.
▪ Staffing-Staffing is a process of manning the job according to their potentiality. It includes
recruitments, selections, placement, allocation and development of the employees for betterment of
organizational activities.
▪ Directing- This element of management process help organization to work effectively and efficiently
to achieve the target by utilizing optimum resources. It includes proper interpersonal communication,
motivation, guidance and leadership to fulfill predetermined objective.
▪ Coordinating- It is a function of establishing relationship among different activities of the
organization. Management is a group activity, so it needs harmonious environment to reach to the
goal. It encompasses clear authority responsibility relation, unity of direction, unity of command,
effective leadership.
▪ Controlling- Deviation from objective indicates requirement of controlling process. Organization
should always measure the performance, identify deviating and must take corrective measure to
rectify deviation.
1. Autocratic: This style involves centralized decision-making, where the manager has full control and
authority over the team. Decisions are made quickly, and there is little input from subordinates.
2. Democratic: In this style, managers involve their team members in the decision-making process. They
encourage participation, seek input fromothers, and consider multiple perspectives before making
decisions.
3. Laissez-Faire: This style is characterized by minimal interference from the manager. Employees are
given a high degree of autonomy to make decisionsand manage their own work.
4. Transformational: Transformational managers inspire and motivate their teams to achieve high levels
of performance. They focus on building strong relationships, empowering employees, and fostering
innovation and creativity.
5. Transactional: Transactional managers focus on setting clear expectations and providing rewards or
consequences based on performance. They use incentives and punishments to motivate employees to
achieve goals.
6. Servant Leadership: Servant leaders prioritize the needs of their teammembers above their own.
They focus on serving others, fostering collaboration, and creating a supportive work environment.
Autocratic
Democratic
Managerial Style
Laissez-Faire
Transformational
Transactional
Servant
Management Roles:
Leadership
1. Planner: Managers are responsible for setting goals, developing plans, and establishing strategies to
achieve objectives.
2. Organizer: Managers organize resources, including people, materials, and equipment, to ensure that
work is completed efficiently and effectively.
3. Leader: Managers provide direction, motivation, and guidance to their team members. They inspire
others to work towards common goals and foster a positive work culture.
4. Coordinator: Managers coordinate activities and tasks within the organization to ensure that different
departments or teams work together smoothly.
5. Decision Maker: Managers make decisions that affect the organization, including setting policies,
allocating resources, and resolving conflicts.
6. Communicator: Managers communicate with employees, stakeholders, and other members of the
organization to share information, clarify expectations,and build relationships.
7. Problem Solver: Managers identify problems, analyze root causes, anddevelop solutions to address
challenges within the organization.
8. Evaluator: Managers monitor performance, evaluate progress towards goals,and provide feedback to
employees to help them improve and develop.
Managerial Roles: An organization performs various managerial roles like planning, organizing, staffing,
direction, coordination, controlling to fulfill targets. Managers having different hierarchical position,
performs variety of activities, which may overlap. Henry Mintzberg classified the roles into three broad
categories:
• Interpersonal role
• Informational role
• Decisional role
According to Mintzberg’s typology, managerial roles fall into three basic categories:
• Interpersonal roles: - This role depict that managers are involved in interpersonal communication with
peoples working within and outside the organization.
• Interpersonal roles include figurehead, leader, and liaison.
• Informational roles: - This role indicates that the managers are receiving, collecting and sharing
information from different sources and circulates them tothose who need it. Informational roles include
monitor, disseminator, and spokesperson.
• Decisional roles: - Managers make decisions to lead the firm to its goal by gathering and analyzing
information and having good communications with his/her coworkers. Decisional roles include
disturbance-handler, resource-allocator, andnegotiator.
Let’s have a brief idea about all the managerial roles.
Interpersonal Role:
▪ Figurehead-This role is a source of motivation for team members. They represent the firm to the outside
world. This managerial role provides power andauthority to the managers. Examples: As a figurehead role,
manager promote their company by attending socialevents.
▪ Leader-The manager takes the leading character to guide, motivate a team,department or entire
organization. Example: As a leader, manager guide his/her subordinate and monitor his progress.
▪ Liaison-As a liaison, manager maintain a good relation with the internal and external environment. They act
as a connector for the firm with outside environment, develop a smooth communication and fulfill the
communication gap between different levels of organization. Examples: A manager has a talk to the
suppliers, customers to identify their needs and to work on fulfilling them.
Informational Role:
▪ Monitor-As a monitor, manager looks towards the opportunities and problems of the organization. This
information in turn helps the firm for improvement. Examples: Focusing customer feedback to identify area
of improvement.
▪ Disseminator- As a disseminator, manager deal out (share) the information to the employees working in the
organization. It can be in both written or verbal form. Examples: Communicating a planned strategy to the
subordinates to improve product quality.
▪ Spokesperson- As a spokesperson, manager speaks for the organization. They try to build a good image of
the firm to the suppliers, investors, buyers etc. Examples: At a conference, a manager speaks about the
achievements of the firm infront of investors, suppliers, vendors, buyers.
Decisional Role:
▪ Entrepreneur- Entrepreneurs are the persons who makes innovative ideas or strategy to run a business
in a unique way. In this entrepreneur role, a manager makes creative way out to run day to day activities
and reach to the goal effectively. Examples: A manager planned to use social media to reach to their
target sales.
▪ Disturbance handler- As disturbance handler, manager fix the problems of theirparticular department
or we can say they are the problem solver of middle level activities and increase productivity.
Example: When team members cannot solve a problem, manager help them resolveit.
▪ Resource Allocator- As resource allocator, manager put effort to assemble the raw materials,
equipment, staffs, capital, facilities and time for production. They decide how maximum output can
be produced with optimum resources. Example: A manager distributes the workload among his team
members.
▪ Negotiator-As a negotiator, manager ties to make a mutual understanding between interest of external
parties and internal parties (other departments, team members). It’s a kind of bargaining. The more
skill of negotiation, more will be thebenefit of the firm. Examples: A manager bargain for pricing,
design and delivery date with the supplierof raw material.
Figurehead
Interpersonal Liaison
Role Leader
• Monitor
Informational • Disseminator
Role • Spokesperson
• Entrepreneur
Decisional • Disturbance Handler
• Resource allocator
Role • Negotiator