ANSWER BANK

MODULE II

Ans 1: Scientific management

Taylors Scientific Managements was, in fact, a movement known as the Scientific

Management Movement pioneered by Taylor and carried on by his followers. The important
publications of Taylor are all combined into one book titled Scientific Management.
Taylors Main Observation:
Throughout his life career, Taylor had observed that there was excessive inefficiency
in the management and functioning of industrial enterprises. In fact, the primary blame for the
inefficient functioning of industrial enterprises was put by Taylor on management; for it was
management who did not know what constituted a fair days task and also the best way of
doing the same.Therefore, he came out with his new concept of management, called scientific
management.

Scientific Management Defined:

Scientific management might be defined as follows:
Scientific management involves the application of a scientific approach to managerial decision
making (consisting of-collection of data, an analysis of data and basing decisions on the
outcome of such analyses); and discarding at the same time, all unscientific approaches, like
rule of the thumb, a hit or miss approach and a trial and error approach.

F W. Taylor defined scientific management in the following words:

Scientific Management consists in knowing what you (i.e. management) want men to do
exactly; and seeing to it that they do it in the best and the cheapest manner.

Principles of Scientific Management:

The fundamental principles, which would support the concept and practice of scientific
management, are the following:
(i) Science, not the rule of the thumb.

(ii) Harmony, not discord.

(iii) Co-operation, not individualism.

(iv) Maximum production, in place of restricted production.

(v) Development of each person to the greatest of his capabilities.

(vi) A more equal division of responsibility between management and workers.

(vii) Mental revolution on the part of management and workers.

Following is a brief comment on each of the above principles of scientific management.

(i) Science, not the rule of thumb:

The basic principle of scientific management is the adoption of a scientific approach to
managerial decision making; and a complete discard of all unscientific approaches, hitherto
practiced by managements.
(ii) Harmony, not discord:
Harmony refers to the unity of action; while discord refers to differences in approach.

(iii) Co-operation, not individualism:

Co-operation refers to working, on the part of people, towards the attainment of group
objectives; while regarding their individual objectives-as subordinate to the general interest.

(iv) Maximum production, in place of restricted production:

In Taylors view the most dangerous evil of the industrial system was a deliberate restriction
of output. As a means of promoting the prosperity of workers, management and society, this
principle of scientific management emphasizes on maximising production and not deliberately
restricting it.

(v) Development of each person to the greatest of his capabilities:

Management must endeavor to develop people to the greatest of their capabilities to ensure
maximum prosperity for both-employees and employers.

(vi) A more equal division of responsibility between management and workers:

The principle of scientific management recommends a separation of planning from execution.
According to this principle, management must be concerned with the planning of work; and
workers with the execution of plans.
(vii) Mental revolution on the part of management and workers:
According to Taylor, scientific management, in its essence, involves a complete mental
revolution on the part of both sides to industry viz. workers and management (representing
employers).

Structure of Taylors Scientific Management:

(1) Determination of a fair days task for each worker through scientific methods (including
the best way of doing a job).

(2) Scientific selection and training of workers.

(3) Standardisation of raw materials, tools and working conditions.

(4) Functional foremanship.

(5) Differential piece-rate system of wage-payment.

ANS 2:

The main focus was on the fields of motion study and time study, combined with an interest
on the psychology of efficiency and work. The Gilbreth theory held that there was a one best
way to do any task. Efficiency, according to the Gilbreth business management theory, could
therefore be improved by finding this one best way and replicating it throughout the
manufacturing process. The Gilbreths used new technologies such as film to break motions
down into incremental parts, which they called therbligs. By reducing the number of
therbligs for any task, one could increase the efficiency of the worker.

The management theory of Frank and Lillian Gilbreth can be summed up by the following:

1. Reduce the number of motions in a task to increase efficiency.

2. Focus on the incremental study of motions and time to understand an entire task.

3. The goal of increased efficiency is both increased profit and greater worker satisfaction.

he Gilbreth management theory is rarely applied directly in today's workplace. However,

certain aspects of the theory, especially time-study and motion-study, can be implemented in a
variety of workplace situations. One of the major implementations of the Gilbreth theory is in
methods-time management (MTM), which is widely used in engineering.

ANS 3:

According to Human Relations Approach, management is the Study of behaviour of

people at work. These studies brought out for the first time the important relationships between
social factors and productivity. Before it, productivity of the employees was considered to be
a function only of physical conditions of work and money wages paid to them. For the first
time it was realised that productivity depended largely upon the satisfaction of the employees
in work situations.

Features of Elton Mayos Human Relations Approach:

The main features of the Human Relations Approach to management are the following:
(a) Since management is getting things done through and with people, a manager must have a
basic understanding of human behaviour in all respectsparticularly in the context of work
groups and organisations.

(b) The managers must study the inter-personal relations among the people at work.

(c) Larger production and higher motivation can be achieved only through good human
relation.

(d) The study of management must draw the concepts and principles of various behavioural
sciences like Psychology and Sociology.

His main contributions are discussed as follows:

1. Human Relations Approach:

Mayo is rightly called the father of human relations movement. His ideas were a milestone and
a turning point in human relations approach of the management. He recognised the importance
of human beings in management. He said that human beings are complex and influential input
into organisational performance. The social and psychological needs of human beings cannot
be ignored, if management wants to enhance productivity.

2. Non-Economic Awards:
The earlier assumption was that workers will work more if they are offered more monetary
incentives. Taylor was the main proponent of this approach. Elton Mayo said that the
techniques of economic incentives were not only inadequate but also unrealistic.

He was able to show that humane and respectful treatment, sense of participation and
belonging, recognition, morale, human pride and social interaction are sometimes more
important than pure monetary rewards.

3. Social Man:
Mayo developed a concept of social man. He said that man is basically motivated by social
needs and obtains his sense of identity through relationships with others. He is more responsive
to the social forces of the informal group rather than managerial incentives and controls. He
also related productivity to a social phenomenon.

4. Organisation as a Social System:

Mayo was of the view that informal relationships in the organisation are more effective than
formal relationships. People form informal groups to give a bent to their feelings and seek
guidance for action from such groups.

In Mayos words, An organisation is a social system, a system of cliques, grapevines, informal

status systems, rituals and a minute of logical, non-logical and illogical behaviour. He was of
the opinion that managers should maintain an equilibrium between the logic of efficiency
demanded by the formal organisation. He thought that besides logic and facts people are also
guided by sentiments and feelings.

Hawthornes experiments were criticized for lack of scientific and vigorous research. The
experiments were too narrow to warrant generalizations. Despite these observations Mayos
work was a turning point in the development of management thought.

ANS 4:

The McKinsey 7-S model can be applied to elements of a team or a project as well. The
alignment issues apply, regardless of how you decide to define the scope of the areas you study.
The McKinsey 7-S model involves seven interdependent factors which are categorized as either
"hard" or "soft" elements:

Hard Elements Soft Elements

Shared Values

Strategy Skills

Structure Style

Systems Staff

"Hard" elements are easier to define or identify and management can directly influence them:
These are strategy statements; organization charts and reporting lines; and formal processes
and IT systems.

"Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and
more influenced by culture. However, these soft elements are as important as the hard elements
if the organization is going to be successful.

The way the model is presented in Figure 1 below depicts the interdependency of the elements
and indicates how a change in one affects all the others.
Let's look at each of the elements specifically:

Strategy: the plan devised to maintain and build competitive advantage over the
competition.
Structure: the way the organization is structured and who reports to whom.
Systems: the daily activities and procedures that staff members engage in to get the job
done.
Shared Values: called "superordinate goals" when the model was first developed, these are
the core values of the company that are evidenced in the corporate culture and the general
work ethic.
Style: the style of leadership adopted.
Staff: the employees and their general capabilities.
Skills: the actual skills and competencies of the employees working for the company.

ANS 5:

Systems 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 its most important characteristic is that it is composed of hierarchy of sub-systems. That
is the parts forming the major system 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 sudi as
production, marketing, finance, accounting and so on.

Features of Systems Approach:

(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 organisational system has a boundary that determines which parts are internal and
which are external.

(iv) A system does not exist in a vacuum. It receives information, material and energy from
other systems as inputs. These inputs undergo a transformation process within a system and
leave the system as output to other systems.

(v) An organisation 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 organisational level. In Appling system
concepts, organisations are taken into account and not only the objectives and performances of
different departments (sub-systems).

The systems approach is considered both general and specialised systems. The general systems
approach to management is mainly concerned with formal organisations and the concepts are
relating to technique of sociology, psychology and philosophy. The specific management
system includes the analysis of organisational 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
organisation as an open system. Chester Barnard was the first person to utilize the systems
approach in the field of management.
ANS 6:
Management Ethics is related to social responsiveness of a firm. It is the discipline dealing
with what is good and bad, or right and wrong, or with moral duty and obligation. It is a
standard of behaviour that guides individual managers in their works.

It is the set of moral principles that governs the actions of an individual or a group.

Business ethics is application of ethical principles to business relationships and activities.

When managers assume social responsibility, it is believed they will do it ethically, that is, they
know what is right and wrong.

Ethical Activities:
1. The foremost goal of managers is to make their organizations effective.

2. Profit maximisation and stakeholders interests were not the central goals of the managers
studied.

3. Attending to customers was seen as important.

4. Integrity was the characteristic most highly rated by managers at all levels.

5. Pressure to conform to organisational standards was seen as high.

6. Spouses are important in helping their mates grapple with ethical dilemmas.

7. Most managers seek the advice of others in handling ethical dilemmas.

Types of Management Ethics:

1. Immoral management:
It implies lack of ethical practices followed by managers. Managers want to maximise profits
even if it is at the cost of legal standards or concern for employees.

2. Moral management:
According to moral management ethics, managers aim to maximise profits within the confines
of ethical values and principles. They conform to professional and legal standards of conduct.
The guiding principle in moral management ethics is Is this action, decision, or behaviour fair
to us and all parties involved?
3. Amoral management:
This type of management ethics lies between moral and immoral management ethics. Managers
respond to personal and legal ethics only if they are required to do so; otherwise there is lack
of ethical perception and awareness.

There are two types of amoral management:

(a) Intentional:
Managers deliberately avoid ethical practices in business decisions because they think ethics
should be followed in non-business activities.

(b) Unintentional:
Managers do not deliberately avoid ethical practices but unintentionally they make decisions
whose moral implications are not taken into consideration.

Guidelines for Ethical Behaviour:

1. Obey the law:
Obeying legal practices of the country is conforming to ethical values.

2. Tell the truth:

Disclosing fair accounting results to concerned parties and telling the truth is ethical behaviour
of managers.

3. Respect for people:

Ethics requires managers to respect people who contact them.

4. The golden rule:

The golden business principle is Treat others as you would want to be treated. This will
always result in ethical behaviour.

5. Above all, do no harm:

Even if law does not prohibit use of chemicals in producing certain products, managers should
avoid them if they are environment pollutants.

6. Practice participation not paternalism:

Managers should not decide on their own what is good or bad for the stakeholders. They should
assess their needs, analyse them in the light of business needs and integrate the two by allowing
the stakeholders to participate in the decision-making processes.

7. Act when you have responsibility:

Actions which cannot be delegated and have to be taken by managers only (given their
competence and skill) must be responsibly taken by them for the benefit of the organisation
and the stakeholders.

Approaches to Management Ethics:

1. Utilitarian approach:
In this approach, managers analyse the effects of decisions on people affected by these
decisions. The action rather than the motive behind the action is the focus of this approach.
Positive and negative results are weighed and managerial actions are justified if positive effects
outweigh the negative effects. Pollution standards and analysing the impact of pollution on
society is management ethics code under utilitarian approach.

2. Moral rights approach:

In this approach, managers follow ethical code which takes care of fundamental and moral
rights of human beings; the right to speech, right to life and safety, right to express feelings etc.
In the context of business organisations, managers disclose information in the annual reports
necessary for welfare of the people concerned. The nature, timing and validity of information
is taken into account while reporting information in the annual reports.

3. Social justice approach:

According to this approach, managers actions are fair, impartial and equitable to all individuals
and groups. Employees are not distinguished on the basis of caste, religion, race or gender
though distinction on the basis of abilities or production is justified. For example, all
employees, males or females with same skills should be treated at par but it is justified to treat
employees who produce more differently from those who produce less.

Need for Business Ethics:

1. Business organisations are economic and social institutions that serve customers needs by
supplying those right goods at the right place, time and price. This is possible if the institutions
engage in ethical practices.
2. Business ethics help in long-run survival of the firms. Unethical practices like paying low
wages to workers, providing poor working conditions, lack of health and safety measures for
employees, selling smuggled or adulterated goods, tax evasion etc. can increase short-run
profits but endanger their long-run survival. It is important, therefore, for firms to suffer short-
term losses but fulfil ethical social obligations to secure their long-term future.

3. Business houses operate in the social environment and use resources provided by the society.
They are, therefore, morally and socially committed to look after the interests of society by
adopting ethical business practices.

4. Ethical business activities improve companys image and give it edge over competitors to
promote sales and profits.

5. Legal framework of a country also enforces ethical practices. Under Consumer Protection
Act, for example, consumers can complain against unethical business practices. Labour laws
protect the interests of workers against unethical practices. Legal framework of the country,
therefore, promotes ethical business behaviour. Business houses want to avoid Government
intervention and, therefore, follow ethical practices.

Barriers to Management Ethics:

1. Chain of command:
If employees know that superiors are not following ethical behaviour, they hesitate in reporting
the matter up the hierarchy for the fear of being misunderstood and penalized. The chain of
command is, thus, a barrier to reporting unethical activities of superiors.

2. Group membership:
Informal groups lead to group code of ethics. Group members are strongly bonded by their
loyalty and respect for each other and unethical behaviour of any member of the group is
generally ignored by the rest.

3. Ambiguous priorities:
When policies are unclear and ambiguous, employees behaviour cannot be guided in a unified
direction. It is difficult to understand what is ethical and what is unethical.
Solutions to Barriers:

1. Organisational objectives and policies should be clear so that every member works towards
these goals ethically.

2. The behaviour of top managers is followed by others in the organisation. Ethical actions of
top managers promote ethical behaviour throughout the organisation.

3. Imposing penalties and threats for not conforming to ethical behaviour can reduce unethical
activities in the organisation. Formal procedures of lodging complaints help subordinates report
unethical behaviour of superiors to the concerned committees.

4. Educational institutions also offer courses and training in business ethics to develop
conscientious managers who observe ethical behaviour.

ANS 7:
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
behaviours 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 like 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 are contingent upon whether the manager
is able to both control and affect the group's situational favourability, or outcome. According
to the theory, you can assess situational favourability by three factors:

1. 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?
2. 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.
3. Position power - This factor asks if the manager's level of authority is based on
punishing or rewarding behaviour. For example, does the manger derive his authority
from providing bonuses for meeting sales goals or terminating employees for failure to
meet the goals?

ANS 8: (Combine both ANS 5 & 7)

ANS 9:

William Ouchis Theory Z of Motivation: Features and Limitations

William Ouchi developed Theory Z after making a comparative study of Japanese and
American management practices. Theory Z is an integrated model of motivation. Theory Z
suggests that large complex organisations are human systems and their effectiveness depends
on the quality of humanism used. A type Z organisation has three major featurestrust,
subtlety and intimacy.

Mutual trust between members of an organisation reduces conflict and leads to team work.
Subtlety requires sensitivity towards others and yields higher productivity. Intimacy implies
concern, support and disciplined unselfishness.

The distinguishing features of Theory Z are as follows:

1. Mutual Trust:
According of Ouchi, trust, integrity and openness are essential ingredients of an effective
organisation. When trust and openness exist between employees, work groups, union and
management, conflict is reduced to the minimum and employees cooperate fully to achieve the
organisations objectives.

2. Strong Bond between Organisation and Employees:

Several methods can be used to establish a strong bond between the enterprise and its
employees. Employees may be granted lifetime employment which leads to loyalty towards
the enterprise. During adverse business conditions shareholders may forgo dividends to avoid
retrenchment of workers. Promotions may be slowed down.

As against vertical movement of employees greater emphasis should be placed on horizontal

movement which reduces stagnation. A career planning for employees should be done so that
every employee is properly placed. This would result in a more stable and conducive work
environment.

3. Employee Involvement:
Theory Z suggests that involvement of employees in related matters improves their
commitment and performance. Involvement implies meaningful participation of employees in
the decision-making process, particularly in matters directly affecting them. Such participation
generates a sense of responsibility and increases enthusiasm in the implementation of decisions,
Top managers serve as facilitators rather than decision-makers.

4. Integrated Organisation:
Under Theory Z, focus is on sharing of information and resources rather than on chart,
divisions or any formal structure. An integrated organisation puts emphasis on job rotation
which improves understanding about interdependence of tasks. Such understanding leads to
group spirit.

5. Coordination:
The leaders role should be to coordinate the efforts of human beings. In order to develop
common culture and class feeling in the organisation, the leader must use the processes of
communication, debate and analysis.

6. Informal Control System:

Organisational control system should be made informal. For this purpose emphasis should be
on mutual trust and cooperation rather than on superior-subordinate relationships.

7. Human Resource Development:

Managers should develop new skills among employees. Under Theory Z, potential of every
person is recognized and attempts are made to develop and utilise it through job enlargement,
career planning, training, etc.

Thus, Theory Z is a hybrid system which incorporates the strengths of American management
(individual freedom, risk taking, quick decision-making, etc.) and Japanese management (job
security, group decision-making, social cohesion, holistic concern for employees, etc.)
systems.

Japanese companies operating in the United State have successfully used Theory Z. After
collaboration between Japanese and Indian companies, some experts have suggested
application of this theory in India, in Maruti Udyog, which has collaboration with Suzuki
motors of Japan an attempt has been made to apply Theory Z.

The workplace has been designed on the Japanese pattern, which involves open offices. The
same uniform has been introduced for all employees irrespective of their designation.
Similarly, there is a common canteen for all. These practices are expected to avoid status
differentials and class feeling among employees and thereby facilitate teamwork in the
company.

Limitations of Theory Z:
Theory Z suffers from the following limitations:
(i) Provision of lifetime employment to employees to develop a strong bond between
organisation and employees may fail to motivate employees with higher level needs. It merely
provides job security and may fail to develop loyalty among employees.

n employee may leave the organisation when better employments are offered to him by some
other enterprise. Moreover, complete security of job may create lethargy among many
employees. Employers also do not like to retain inefficient employees permanently.

(ii) Participation of employees in the decision-making process is very difficult. Managers may
dislike participation as it may hurt their ego and freedom. Employees may be reluctant to
participate due to fear of criticism and lack of motivation. Even if they sit along with
management they may contribute little unless they understand the issues and take initiative.
Involvement of all employees may also slow down the decision-making process.

(iii) Theory Z suggests organisation without any structure. But without structure there may be
chaos in the organisation as nobody will know who is responsible to whom.

(iv) It may not be possible to develop a common culture in the organisation because people
differ in their attitudes, habits, languages, religions, customs, etc.

(v) Theory Z is based on Japanese management practices. These practices have been evolved
from Japans unique culture. Therefore, the theory may not be applicable in different cultures.

Thus, Theory Z does not provide complete solution to motivational problems of all
organisations operating under different types of environment. However, it is not merely a
theory of motivation but a philosophy of managing.

ANS 10:

Functions of a Manager:
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 predetermined goals. Planning is
necessary to ensure proper utilization of human & nonhuman 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 personnels. 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 behaviour etc. The main purpose of 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 & ODonell, Managerial function of staffing involves manning the organization
structure through proper and effective selection, appraisal & development of personnel to fill
the roles designed in 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
(i) Supervision- implies overseeing the work of subordinates by their superiors. It is the act of
watching & directing work & workers.
(ii) 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.
(iii) Leadership- may be defined as a process by which manager guides and influences the
work of subordinates in desired direction.
(iv) 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 & ODonell 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:
(i) Establishment of standard performance.
(ii) Measurement of actual performance.
(iii) Comparison of actual performance with the standards and finding out deviation if any.
(iv) Corrective action.

ANS 11:

In 1960, Douglas McGregor formulated Theory X and Theory Y suggesting two aspects of
human behaviour at work, or in other words, two different views of individuals (employees):
one of which is negative, called as Theory X and the other is positive, so called as Theory Y.
According to McGregor, the perception of managers on the nature of individuals is based on
various assumptions.

Assumptions of Theory X

An average employee intrinsically does not like work and tries to escape it whenever
possible.
Since the employee does not want to work, he must be persuaded, compelled, or warned
with punishment so as to achieve organizational goals. A close supervision is required
on part of managers. The managers adopt a more dictatorial style.
Many employees rank job security on top, and they have little or no aspiration/
ambition.
Employees generally dislike responsibilities.
Employees resist change.
An average employee needs formal direction.

Assumptions of Theory Y

Employees can perceive their job as relaxing and normal. They exercise their physical
and mental efforts in an inherent manner in their jobs.
 Employees may not require only threat, external control and coercion to work, but they
can use self-direction and self-control if they are dedicated and sincere to achieve the
organizational objectives.
If the job is rewarding and satisfying, then it will result in employees loyalty and
commitment to organization.
An average employee can learn to admit and recognize the responsibility. In fact, he
can even learn to obtain responsibility.
The employees have skills and capabilities. Their logical capabilities should be fully
utilized. In other words, the creativity, resourcefulness and innovative potentiality of
the employees can be utilized to solve organizational problems.

Thus, we can say that Theory X presents a pessimistic view of employees nature and behaviour
at work, while Theory Y presents an optimistic view of the employees nature and behaviour
at work. If correlate it with Maslows theory, we can say that Theory X is based on the
assumption that the employees emphasize on the physiological needs and the safety needs;
while Theory X is based on the assumption that the social needs, esteem needs and the self-
actualization needs dominate the employees.

McGregor views Theory Y to be more valid and reasonable than Theory X. Thus, he
encouraged cordial team relations, responsible and stimulating jobs, and participation of all in
decision-making process.

Implications of Theory X and Theory Y

Quite a few organizations use Theory X today. Theory X encourages use of tight control and
supervision. It implies that employees are reluctant to organizational changes. Thus, it does
not encourage innovation.

Many organizations are using Theory Y techniques. Theory Y implies that the managers
should create and encourage a work environment which provides opportunities to employees
to take initiative and self-direction. Employees should be given opportunities to contribute
to organizational well-being. Theory Y encourages decentralization of authority, teamwork
and participative decision making in an organization. Theory Y searches and discovers the
ways in which an employee can make significant contributions in an organization. It
harmonizes and matches employees needs and aspirations with organizational needs and
aspirations.

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Approaches to management:-
I) Traditional Approaches
1. Classical/Management process/Empirical Approach
2. Neo-Classical/ Behavioural Approach
II) Modern Approaches
1. Decision Theory/ Mathematical/Management Science Approach
2. System Approach.
3. Situational/ Contingency Approach

1. Classical Approach: This approach is also known as traditional approach, management

process or empirical approach
Features:
a) Management is viewed as a systematic process of interrelated functions. The
interrelationship between functions is considered as a core of this approach.
b) The principles are developed on the basis of an experience of practicing managers.
c) Functions, principles and skills of management are considered universal.
d) Formal education, training and case studies are often used for developing managerial
skills.
e) Emphasis is placed on economic efficiency and the formal organization structure.
f) People are motivated by economic gains.

Contributors to Classical Approach:

1. Scientific Management developed by F.W.Taylor, Harrington Emerson, Henry Gantt and
Lillian Gilberth.
2. Administrative Theory or Functional Approach developed by Henry Fayol, Lyndall F.
Urwick and James D. Mooney.
3. Bureaucracy was evolved by Max Weber. It visualizes a machine model of organization
characterized by a hierarchy of authority, rules and regulations and impersonal control over
human beings.
Limitations/ Shortcomings of the Approach:
a) It undermines the role of human factor.
b) The environmental dynamics have been discounted.
c) There is a positive danger in relying too much on past experiences because the principles
found effective in the past may not fit a situation of the future.

2. Neo-Classical or Behavioural Approach: While the classical approach focused on the jobs,
the behavioural approach stressed the individuals performing these jobs. Prof. Elton Mayo
is considered to be the founder of the behavioural school of thought.

The behavioural approach focuses on human behaviour in organization and seeks to promote
verifiable factors that help in understanding the human behaviour in the organizations. The
basic proposition of the behavioural approach is as follows:
a) An organization is a socio-technical system.
b) A wide range of factors influence interpersonal and group behaviour of people in the
organization.
c) There should relationship between organizational goals and needs.
d) Several differences in the attitudes, perceptions and values of employees exist and
influence their behaviour and performance.

Limitations/ Shortcomings of the Approach:

i) Too much importance to employees, and social needs: Human relations approach to
management has given too much importance to employees, their needs and satisfaction.

ii) Employee-oriented approach to a limited extent: It is argued that human relations

approach is apparently employee-oriented but in reality it is organisation-oriented.

iii) Faulty assumption in the theory: The human relations approach is based on a wrong
assumption that satisfied workers are more productive.

iv) Limited importance to economic incentives: The human relations approach has given
limited importance to economic incentives in motivating employees.
MODERN APPROACHES
3. Systems Approach in Management
A system is an organised entity i.e. a company or a business enterprise made up of parts
connected and directed to some purpose. Each system has an input, a process and an output.
It acts as a self-sufficient unit. Every system is interlinked with its subsystems.

Features of Systems Approach to Management

i) Open or Closed Systems: Systems may be either open or dosed. An open system is one
that is dependent on the outside environment for survival e.g., human body as a system is
composed of many subsystems. This is an open system and it must depend on outside input
and energy for survival. A system is considered closed if it does not interact with the
environment. Physical and mechanical Systems are closed system because they are insulated
from their external environment.

ii) Interdependent parts: A system is a set of interdependent parts which together form a
unitary whole that perform some function. An organisation is also a system which consists
of four interdependent parts viz., task, structure, people and technology.

iii) Consideration of whole system: No part of the system can be precisely analysed and
under-stood apart from the whole system. Conversely, the whole system cannot be exactly
evaluated without understanding all its parts. Each part is related to every other part. For
example, in order to understand the operations of the finance or production or marketing
departments, he must understand the company as a whole. It is because activity of any one
part of the company affects the activity of every other part.
iv) Information, energy and material: Generally, there are three basic inputs that enter the
processor of the system viz., information (technology), energy (motive power) and materials
to be transformed into goods.
v) Defined boundaries: Each system including an organisation has its own boundaries which
separate it from other system in the environment. The system is inside the boundary, the
environment is outside the boundary'.
vi) Synergy: Output of a system is always more than the combined output of its parts. This
is called 'synergy. In organizational terms, synergy means when separate departments
within an organisation cooperate and interact, they become more productive than if they had
acted in isolation e.g., it is certainly more efficient for each department to deal with one
secretarial department than for each department to have a separate secretarial department of
its own.
vii) Feedback mechanism: A system can adopt and adjust itself to the changing environment
through the feedback mechanism. As operations of the system proceed information in
feedback to the appropriate people. This helps to assess the work and if need be, to get it
corrected.
viii) Multidisciplinary approach: Systems approach freely draws concepts and techniques
from many fields of study such as psychology, sociology, ecology, economics, mathematics,
statistics, operations research, systems analysis etc.
Limitations of Systems Approach
i) The systems approach is criticized on the ground that it is too abstract and vague. It is
difficult to apply it to practical problems directly and easily.
ii) The systems theory/approach fails to provide specific tools and techniques for the
practicing executives/managers.

The systems approach does not recognize differences in systems. It fails to clearly identify
the nature of interactions and interdependencies between an Organization and its external
environment it also fails to offer a unified body of knowledge.

4. Contingency Management School / Contingency Approach to Management / Situational

Approach

The contingency/situational approach is the second approach (the first being the systems
approach) which attempts to integrate the various schools of management thought in an
orderly manner. The basic theme of contingency approach is that organisations have to deal
with different situations in different ways. There is no single best way of managing
applicable to all situations.

Features of the Contingency / Situational Approach

i) Management is entirely situational. The management has to use the measures/techniques
as per the situation from time to time.
ii) Management should match its approach as per the requirements of the situation. The
policies and practices used should be suitable to environmental changes.
iii) The success of management depends on its ability to cope up with its environment.
Naturally, it has to make special efforts to anticipate and comprehend the possible
environmental changes. Managers should realize that there is no one best way to manage.
They have to use management techniques as per the situation which they face.
Limitations of Contingency Approach
i) It is argued that the contingency approach lacks a theoretical base.
ii) Under contingency approach, the areas of operation of a manager are quite extensive
under this theory.

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