What is management?

FW Taylor - Management is the art of knowing what is to be done and seeing that
it is done in the best possible manner.

Henri Fayol - Management is the art of getting things done through others. It is
an activity which coordinates human and non-human resources (man, material,
machinery, money and method) for achieving the desired results.

Difference between effectiveness and efficiency

Basis Effectiveness Efficiency

What is it? Doing accurate work Work is done in correct

manner

Emphasis on Means and end Input and output

Time Horizon Long Term Short Term

1. Efficiency is ‘to do the things perfect’ while Effectiveness is ‘to do perfect

things’.
2. Efficiency is yield-oriented. Unlike Effectiveness, which is result oriented.

What is Efficiency?

Efficiency is the art of doing things with the least amount of wasted time,
energy, or resources. It’s the hallmark of a well-organized and streamlined
process

Key Characteristics of Efficiency

Resource Optimization
Time Saving
Cost Reduction
Productivity boost

What is Effectiveness?

Effectiveness is the measure of how well a goal is achieved. It’s all about
achieving the desired outcomes and meeting objectives.

Key Characteristics of Effectiveness

 Goal oriented
Quality over quantity
Strategic thinking
Adaptability

Classical Theories of Management

1. Administrative Management Theory : Founded by Henri Fayol

Henri Fayol’s 14 Principles of Management

i) Division of Work
● Work should be divided into small task or units to increase the efficiency
and specialization
● Work should be assigned to employees according to their capacity,
qualification and experience
● It will lead to specialization and improve efficiency.

ii) Authority and responsibility

● According to this principle, there should be a proper balance between
authority and responsibility.
● Authority is the duty, which a subordinate is expected to perform.
● Authority and responsibility go hand in hand. Authority without
responsibility leads to irresponsible behavior, while responsibility without
authority will make a person ineffective.

iii) Discipline
● Discipline refers to obedience to the rules and regulations of the
organization
● Discipline requires good supervision at all levels of management.
● According to Fayol, good supervision at all levels, clear and fair rules, and
a built-in system of penalties will help to maintain discipline

iv) Unity of Command

● Each subordinate should receive orders and be accountable to only the
superior.
● To avoid confusion, conflicting instructions, and accountability issues.

v) Unity of Direction
● Teams working toward the same objective should operate under one plan
and one leader to ensure coherence and alignment.

vi) Subordination of Individual interest and general interest

● The interest of the organization as a whole must prevail over the interest of the
individual.
 ● Managers encourage employees to prioritize the organization’s goals, and policies are
crafted to reward teamwork and discourage behavior that benefits only one individual.

vii) Remuneration of employees

● Remuneration should be fair and satisfactory to both employees and the organization
● Fair remuneration should be determined based on government rules related to wages,
financial position of the organization, nature of work, and cost of living.

viii) Centralisation and Decentralisation

● Centralisation refers to the concentration of authority at the top level, and
decentralization means distribution at all levels of management.
● According to this principle, there should be a proper balance between centralization
and decentralization.
● The degree of centralisation and decentralisation depends upon various factors such as
experience of the employees, ability of subordinates, size of the organization, etc

ix) Scalar Chain

● There is a scalar chain of authority and communication that moves in a straight line
from superior to subordinate.
● Henri Fayol permitted a shortcut of chain in case of urgency known as gang plank.
● Gang plank allows direct communication between two employees of the same level.

x) Order
● There should be a proper place for everything and everyone.
● Henri Fayol emphasized on two types of order: material order and social order.
● In material order there must be a plan for everything. It ensures a place for various
material tools.
● Whereas in social order, there must be an appointed place for every employee, which
ensures a proper and fixed place/cabin for each employee.
xi) Equity
● There should not be any discrimination amongst employees based on religion, caste,
language, or nationality.
● Equity ensures coordinated relationship between superior and subordinates.

xii) Stability of personnel

● There should be proper effort to achieve stability and continuity of employment
● Job stability promotes a skilled and competent workforce, reducing the costs and
inefficiencies of frequent turnover.

xiii) Initiative
Encouraging employees to take initiative increases engagement, fosters creativity, and allows
for innovation within the organization.

xiv) Esprit De Corps

● Management should take reasonable steps to develop a sense of belongingness and a
feeling of team spirit amongst employees.
● In order to achieve the best possible result, individual and group efforts need to be
integrated.
● Replace I with We

Administrative Functions: Fayol identified five key functions of management that are
foundational to administrative theory:

Planning: Developing strategies to meet future organizational goals and establishing the
means to achieve them.
Organizing: Structuring resources and activities efficiently to support goal achievement.
Commanding (Leading): Directing and guiding employees to complete tasks and adhere to
standards.
Coordinating: Ensuring all parts of the organization work together harmoniously.
Controlling: Monitoring performance and making adjustments to stay aligned with
organizational goals.
 Scientific Theory of management

“Scientific management is the art of knowing exactly what you want your men to do and
then seeing that they do it in the best and cheapest way.” - FW Taylor

Scientific Management is a management technique that utilizes scientific methods to enhance

workforce efficiency. It uses scientific methods that include systematic, objective, and logical
principles and techniques to solve management problems.

Frederick Winslow Taylor(1856-1915)

F.W Taylor was an American mechanical engineer who started his career as a mechanic and
rose to the position of chief engineer in Bethlehem Steel Company, USA. He found that the
main cause of inefficiency and wastage in factories was ignorance on the part of both workers
and management because of the use of Traditional, unscientific rules and rule of thumb.

Principles of Scientific Management

1. Science, not Rule of Thumb

Taylor focused on the scientific study and analysis of each and every element of a work to
replace the old rule of thumb method or hit and trial method. Rule of thumb is not based on
science or exact measurement. Scientific method is based on cause and effect, whereas rule of
thumb was based solely on the discretion of managerial decisions. Taylor focused that
manager should scientifically analyze each and every component of work. Doing a work
scientifically reduces wastage of time and resources and helps to achieve the target effectively
and efficiently.

2. Harmony, Not Discord

Taylor recognized the class conflict that existed between the workers and managers. He
emphasized that there should be no conflict between the workers and managers. Both of them
should realize the importance of each other and should work together for organisational goal.
In order to achieve this harmonious relation, he focused on ‘Mental Revolution’, which means
 that workers and managers should transform their thinking. In such a situation, management
aims at providing a better working environment for the employees, and sharing the gains of the
company, etc., and workers should avoid going on strikes and work hard to the best of their
ability. If workers are not satisfied with the management, they wear a black badge and work
for more than the normal working hours.

3. Cooperation, Not Individualism

According to this, there should be cooperation between management and workers instead of
individualism. This principle is an extension of Principle ‘Harmony, Not Discord‘. Both
management and workers should realize that they need each other. There should be
cooperation between them, and competition should be replaced by cooperation. For achieving
this principle, management should welcome the constructive ideas and suggestions of the
workers. The workers should be praised and rewarded for the suggestions given if their
suggestions were helpful. Workers should be taken into consideration while taking
important decisions. On the other hand, workers should avoid unreasonable demands and
strikes and should work effectively and efficiently to achieve organizational goals.

4. Development of Workers to their Greatest Efficiency and Prosperity

Taylor focused on the efficiency of workers. According to him, every organization should
follow the scientific method of selection of workers, and each worker should be scientifically
selected. Then they should be assigned work according to their mental, physical and
intellectual capabilities. To increase efficiency, training should be provided. This increase in
efficiency will be beneficial for both workers and management.

Techniques of Scientific Management

1. Functional Foremanship: According to this technique, the work of supervision is divided into
several specialized foremen. Taylor believes that one foreman is not an expert in all aspects of
work. Therefore, each worker should be supervised by several foremen. Taylor suggested
that 8 specialists out of these 4 will be responsible for looking after the planning work, and the
other four will be responsible to supervise and executing of work.
2. Standardization and Simplification of Work: Standardization means fixing standards for
everything. To attain standard production, the standard of performance is established for the
workers. Standardization of work means standard set for material, machine method, and
condition of work. Simplification refers to eliminating unnecessary varieties, sizes, and
grades of the product. It aims at eliminating unnecessary varieties, sizes and dimensions.

3. Work-Study: Work-study means systematic and critical assessment of all the operational
functions in the organization. The main objective of the work-study is to improve efficiency by
making optimum utilization of resources.

● Method Study: It is a concern with finding ‘one best way’ of doing a job. The main aim of this
technique is to improve work methods to minimize the cost of products and maximize the
satisfaction of customers.
● Motion Study: This study refers to making a thorough analysis of various motions being
performed by a worker while he is doing a particular job. The main purpose of motion study is
to detect and eliminate unnecessary movement, and to find out the best method of doing a
particular job.
● Time Study: It is the technique that is used to determine the standard time taken by a
worker. It helps in determining how much work an employee should be able to do in a given
period.
● Fatigue Study: It refers to determining the amount and frequency of rest intervals required
in completing a work. Taylor suggested that a person gets tired when he works continuously
without a break. So, he must be provided with a rest interval to regain his lost stamina.

4. Differential Price Wage System: This is a system in which efficient and inefficient workers
are paid at different rates. According to Taylor, financial incentives act as a motivator. So,
Taylor developed the concept of a differential piece wage system. In this technique, incentives
are directly linked with productivity.

5. Mental Resolution: It means a total change in the attitude of workers and management
towards one another from competition to cooperation. It requires that management should
create suitable working condition for workers, and workers should do their work with full
devotion.
 Max Weber's Bureaucratic Management Theory is a comprehensive framework for organizing
large, complex organizations efficiently and consistently. Developed in the early 20th century,
it remains influential, particularly in government institutions, large corporations, and structured
organizations requiring clarity, consistency, and control.

Key Components and Characteristics of Bureaucratic Management

Weber’s theory outlines the structure, functioning, and management of a “bureaucratic”

organization. His model is based on several key characteristics aimed at ensuring efficiency,
predictability, and impartiality.

1. Formal Hierarchical Structure

● Bureaucratic organizations are built on a clear, hierarchical structure with defined roles,
responsibilities, and reporting relationships.
● Authority flows in a top-down manner, with each level responsible to a higher level.
● This hierarchy allows efficient delegation, accountability, and control, as each level is clearly
subordinate to the one above it.

2. Division of Labor and Specialization

● Work is divided into specific roles, with each role focused on a particular task or set of tasks.
This division encourages workers to develop expertise in their specialized area, leading to
improved productivity and efficiency.
● Job specialization minimizes overlap and ambiguity, as everyone has a clearly defined role.

3. Formal Rules and Regulations

● Bureaucracies are governed by a comprehensive set of rules, policies, and procedures that
guide behavior, operations, and decision-making.
● Standardized procedures ensure uniformity and fairness, so tasks are carried out consistently
regardless of who performs them.
● These formal rules aim to reduce errors and discrepancies, making the organization’s operations
predictable and efficient.

4. Impersonal Relationships
● In bureaucratic organizations, interactions and decisions are based on objective criteria rather
than personal preferences or relationships.
● Impersonal relationships create a professional work environment, reducing favoritism and bias.
This objectivity allows for fair treatment across the organization, ensuring that employees are
evaluated based on performance and adherence to rules.

5. Employment Based on Technical Qualifications

● Bureaucratic management emphasizes hiring and promoting employees based on their

technical qualifications, skills, and experience rather than on personal connections.
● This focus on merit ensures that the most capable individuals occupy each role, contributing to
overall efficiency and performance.
● Employees are expected to gain expertise in their areas, reinforcing specialization.

6. Career Orientation and Promotion Based on Seniority and Achievement

● Career progression in a bureaucratic organization is often based on seniority, achievement, or a

combination of both.
● Promotions are typically governed by strict policies that reward experience, skill development,
and performance, encouraging employees to work diligently within the system.

7. Separation of Ownership and Management

● In bureaucratic organizations, managers and administrators do not own the resources or capital
they manage. This separation creates a distinction between ownership and control, allowing
managers to operate impartially.
● This ensures managers are objective and neutral in their decisions, focusing on organizational
efficiency rather than personal gain.