CHAPTER ONE

Introduction
The only certainty today is change; challenging goals motivate people to strive for
improvement and overcome resistance to change 'in all businesses, to provide
value, you've got to do whatever it is you do fast and with immense efficiency.
Keep these managerial realities in mind as you explore the world of
management in this book. Every one of us-whether as an employee a customer, or a
stockholder has a direct stake in the quality of management. Effective
management is the key to a better world, but mismanagement squanders our resource and
jeopardizes our well-being. Every manager, regardless of level or scope of
responsibility it is either part of the solution or part of the problem. Management or
mismanagement - the choice is yours. A basic knowledge of management
theory, research, and practice will help prepare you for productive and gainful
employment in a highly organized world in which virtually everything is managed.
Management defined
We need to define management, in order to highlight the importance, relevance, and
necessity of studying it.
Different scholars from different discipline view and interpret management from their
own angle. The economist consider management as a resource, the sociologist
considers it as a part of the class elite in the society while the bureaucrats look
upon it as a system of authority to achieve business goals.
The definitions by some of the leading management thinkers and practitioners given
below:
1. Management consists in guiding human and physical resources into dynamic, hard-
hitting organization unit that attains its objectives to the satisfaction of those served and with
a high degree of morale and sense of attainment on the part of those rendering the

1
service Lawrence, A. Appley. (1968).
2. Management is coordination of all resources through the process of
planning, organizing, directing, and controlling in order to attain stated
objective. Henry, I.sisk. (1957)
3. Management is principally the task of planning, coordinating motivating, and
controlling the efforts of others towards a specific objective. James, I.Lundys.
(1973)
Management is the creation and maintenance of an internal environment in an
enterprise where individuals, working in groups, can perform efficiently and effectively
towards the attainment of group goals. Harold, koontz and Cyril, O’Donnell.
(1976)
Management is the art of knowing what you want to do and then seeing that
it is done in the best and cheapest way. F. W. Taylor, (1972)
To manage is to forecast and to plan, to command, to coordinate and to
control. Henri, Fayol. (1925).
Management is concerned with seeing that the job is done; its tasks all
centre on planning and guiding the operations that are going on in the
enterprise. E. Breach. (1958)
Management is a distinct process consisting of planning, organizing,
actuating and controlling performed to determine and accomplish objectives
by the use of people and resources. George, R. Terry (1961)
Management is a multipurpose organ that manages a business, manages
managers, and manages workers and work. Peter, Drucker. (1950)
10. Management is the process of working with and through others to
achieve organizational objective in a changing environment. Robert,
K.(1995)

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CONCEPTS OF MANAGEMENT
The term management has been interpreted in several ways; some of which are given
below:
MANAGEMENT AS AN ACTIVITY
Management is an activity just like playing, studying, teaching etc. As an activity,
management has been defined as the art of getting things done through the efforts of
other people. Robert, k. (1995). Management is a group activity wherein managers
do to achieve the objectives of the group. The activities of management are:
A. Informative activities
B. Decisional activities
C. Inter-personal activities
A. Informational activities: in the functioning of business enterprise, the manager
constantly has to receive and give information orally or in written. A
communication link has to be maintained with subordinates as well as
superiors for effective functioning of an enterprise.
B. Decisional activities: practically all types of managerial activities are based
on one or the other types of decisions. Therefore, managers are continuously
involved in decisions of different kinds since the decision made by one
manager becomes the basis of action to be taken by other managers. (E.g. Sales
manager is deciding the media and content of advertising).
C. Inter-personal activities: management involves achieving goals through people.
Therefore, managers have to interact with superiors as well as the subordinates.
They must maintain good relations with them. The inter-personal activities
include with the sub-ordinates and taking care of the problem. (E.g. given
subordinates bonuses).

3
MANAGEMENT AS A PROCESS
Management is considered a process because it involves a series of interrelated functions; it
consists of getting the objectives of an organization and taking steps to achieve these
objectives. The management process includes planning, organizing, staffing,
directing, and controlling functions.
Manangement as a process has the following implications:
A. Social process: management involves interactions among people. Goals can be
achieve only when relations between people are productive. Human factor is
the most important part of the management,
B. Integrated process: management brings human, physical and financial
resources together to put into effort. Management also integrates human
efforts so as to maintain harmony among them.
C. Continuous process: management involves continuous identifying and
solving problems. It is repeated every now and then until the goal is achieved.
D. Interactive process: managerial functions are contained within each other for
example, when a manager prepares plans he is also laying down standards for
control.
3. Management as a Discipline
Management as a discipline refers to that branch of knowledge that is
connected to the study of principle and practices of basic administration. It specifies
certain code of conduct to be followed by the manager and various methods for
managing resources efficiently.
Management as a discipline specifies certain code of conduct for manager’s and indicates
various methods of managing an enterprise. Management is a course of study,
which is now formally being taught in the polytechnics, and universities
after completing a prescribed course or by obtaining degree or diploma in

4
management, a person can get employment as a manager. Any branch of knowledge
that fulfills following two requirements is known as a discipline: there must be
scholars and thinkers who communicate relevant knowledgetthrough research
and publications. The knowledge should be formally imparted by education
and training programmes.
Since management satisfies both these problems, therefore it qualifies to be a ddiscipline.
However, it is comparatively a new discipline but it is growing at a faster pace.
4. Management as an economic resource
Like land, labour, and capital, management is an important factor of
production. Management occupies the central place among productive factors as it
combines and coordinates all other resources. This is shown in fig. 1.1

Fig. 1.1 management as resources

5. Management as a team
As a group of persons, management consists of all those who have the
responsibility of guiding and coordinating the efforts of other persons. These persons are
called as managers who operate at different levels of authority (top, middle,
operating). Some of these managers have ownership stake in their firms while others have

5
become managers by virtue of their training and experience. Civil servants and defense
personnel who manage public sector undertakings are also part of the management
team.
6. Management as a group
Management means the group of persons occupying managerial positions. It
refers to all those individuals who perform managerial functions. All the managers, e.g.,
chief executive (managing director), departmental heads, supervisors, and so on are
collectively known as management. Example when one remarks that the
management of gambo job ltd. Is good, he is referring to the persons who are
managing the company. There are several types of managers that are listed as:
A. Family managers who have become manager by virtue of their being owners
or relatives of the owner of a company.
B. Professional managers who have been appointed because of their degree or
diploma in management.
C. Civil servants who manage public sector undertakings: Managers have become a
very powerful and respected group in modern society. This is because the senior
managers of companies take decisions that affect the lives of a large number of
people. For example, if the managers of Gambo Job ltd decide to expand production it
will create job for thousands of people. Managers also help to improve the social life
of the public and the economic progress of the country. Senior managers also
enjoy a high standard of living in society. They, therefore, have become an elite
group in the society.
CHARACTERISTICS OF MANAGEMENT
The salient features that highlight the nature of management are as follows:
A. Management is goal-oriented: management is not an end in itself. It is a
means to achieve certain goals. Management has no justification to exist

6
without goals. Management goals are called group goals or organizational
goals. The basic goal of management is to ensure efficiency and economy in
the utilization of human, physical, and financial resources. The success of
management is measured by the extent to which the established goals one
achieved. Thus, management is purposeful.
B. Management is universal: management is an essential element of every
organized activity irrespective of the size or type of activity. Wherever two
or more persons are engaged in working for a common goal, management is
necessary. All types of organizations, e.g. family, club, schools and
government, army, soccer team places of worships or business, require
management. Thus, management is a pervasive activity. The fundamental
principles of management are applicable in all areas of organized effort.
Managers at all levels perform the same basic functions.
C. Management is an integrative force: the essence of management lies
in the coordination of individual effort in to a team. Management reconciles
the individual's goals with organizational goals. As a unifying force,
management creates a whole that is more than the sum of individual parts. It
integrates human and other resources.
D. Management is a social process: people, through people and for people, do
management. Robert, k. (1995), it is a social process because it is concerned
with interpersonal relations. Human factor is the most important element in
management.
According to apply, “management is the development of people not the direction of
things”A good manager is a leader not a boss. It is the pervasiveness of human
element which gives management its special character as a social process".
E. Management is Multi-Disciplinary: management has to deal with

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human behavior under dynamic conditions. Therefore, it depends upon wide
knowledge derived from several disciplines like engineering, sociology, psychology,
economics, anthropology, etc. The vast body of knowledge in management
draws heavily upon other fields of study.
F. Management is a continuous process: management is a dynamic and an
on-going process. The cycle of management continues to operate so long as
there is organized action for the achievement of group goals.
G. Management is intangible: management is an unseen or invisible force. It
cannot be seen but its presence can be felt everywhere in the form of results.
However, the managers who perform the functions of management are very
much tangible and visible.
H. Management is an art as well as science: it contains a systematic body of
theoretical knowledge and it involves the practical application of such
knowledge. Management is also a discipline involving specialized training and an ethical
code arising out of its social obligations. Based on these characteristics,
management may be defined as a continuous social process involving the
coordination of human and material resources in order to accomplish desired
objectives. It involves both the determination and the accomplishment of
organizational goals.
OBJECTIVES OF MANAGEMENT
The objectives of management are narrated as under:
A. Organizational objectives: management is expected to work for the
achievement of the objectives of the particular organization in which it exists.
Organizational objectives include:
a. Reasonable profits to give a fair return on the capital invested in business.
b. Survival and solvency of the business (Continuity, growth and expansion of

8
the enterprise.)
B. Personal objectives: an organization consists of several persons who
have their own objectives. These objectives are as follows:
a. Fair Remuneration for work Performed
b. Reasonable working conditions
c. Opportunities for training and development
d. Participation in management and prosperity of the enterprise
e. Reasonable security of service.
C. Social objectives: management is not only a representative of the owners
And workers, but is also responsible to the various groups outside the
organization. It is expected to fulfill the objectives of the society that aregiven
below:
a. Quality of goods and services at fair price to consumers.
b. Honest and prompt payment of taxes to the government.
c. Conservation of environment and natural resources.
d. Fair dealings with suppliers, dealers and competitors.
e. Preservation of ethical values of the society.
ROLE AND IMPORTANCE OF MANAGEMENT
Management is indispensable for the successful functioning of every organization. It is all
the most important, in business enterprises. No business runs itself, even on
momentum. Every business needs repeated stimulus that can only be provided
by management.
According to Peter Drucker, (1992)"management is a dynamic life giving
element in an organization, without it the resources of production remain mere
resources and never become Production".
The importance of management has been highlighted clearly in the following points.

9
A. Achievement of Group Goals: a human group consists of several persons,
each specializing in doing a part of the total task. Each person may be
working efficiently, but the group as a whole cannot realize its objectives
unless there is cooperation and coordination among the members of the
group. Management creates teamwork and co-ordination in the group. He
reconciles the objectives of the group with those of its members so that each
one of them is motivated to make his best contribution towards the
accomplishment of group goals. Managers provide inspiring leadership to
keep the members of the group working hard.
B. Optimum Utilization of Resources: managers forecast the need for
materials, machinery, money, and work force. They ensure that the
Organization has adequate resources and at the same time does not have idle resources.
They create and maintain an environment conducive to highest productivity. Managers
make sure that workers know their jobs well and used the most efficient methods of
work. They provide training and guidance to employers so that they can make the best
use of the available resources.
C. Minimization of Cost: in the modern era of cutthroat competition no
business can succeed unless it is able to supply the required goods and services
at the lowest possible cost per unit. Management directs day-to-day operations
in such a manner that all wastage and extravagance are avoided. By reducing
costs and improving efficiency, mangers enable an enterprise to be competent
to face competitors and earn profits.
D. Survival and Growth: modern business operates in a rapidly changing
environment. An enterprise has to adapt itself to the changing demands of the
market and society. Management keeps in touch with the existing business
environment and draws its predictions about the trends in future. It takes steps
in advance to meet the challenges of changing environment. Changes in
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business environment create risks as well as opportunities. Managers enable
the enterprise to minimize the risks and maximize the benefits of opportunities,
in this way, managers facilitate the continuity and prosperity of business.
E. Generation of Employment: by setting up and expanding business
enterprises, managers create jobs for the people. People earn their livelihood
by working in these organizations. Managers also create such an environment
that people working in enterprise can get job satisfaction and happiness. In this
way managers help to satisfy the economic and social needs of the employees.
F. Development of the Nation: efficient management is equally important at
the national level. Management is the most crucial factor in economic and
social development. The development of a country largely depends on the
quality of the management of its resources. Capital investment and import of
technical expertise cannot lead to economic growth unless wealth producing
resources are managed efficiently.by producing wealth management increases the
national income and the living standards of people that is why management is
regarded as a key to the economic growth of a country
FUNCTION OF MANAGEMENT
The essential element/component of management is:
1. Planning
2. Organizing
3. Directing
4. Controling
5. Motivating
6. Co-ordinating
7. Staffing
8. Communicatin

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1. planning: planning is the primary functions of management,it involves determination of
a course of action to achieve desired result/objectives.
Planning is the starting point of management process all other functions of management are
related to,and dependent on planningfunction.planning is the key to sucess,stability, and
prosperity in business.it acts as a tool for solving the problem ofa business unit.planning
plays a pivotal role in business management. It helps to visualize the future problems and
keep management ready with possible solutions.
2. Organizing:organizing is the next to planning ,it means to bring the
resources(men,material machine etc) together and use them properly for achieving the
objectives.organizing is a process as it is a structure.
Organizing means arranging ways ,and means for the execusion of a business plan. It
provides suitable administrative structure and facilitates excusion of a proposed
plan.organizing involves different aspect such as departmentation,span of control,delegation
of authority,establishment of superior-subordinates relationship and provision of
mechanism for various business activities.
3. Directing: (leading): directing as a managerial function deals with guiding and
instructing people to do the work in the right manner. Directing/leading is the responsibility
of managers at all levels. They have to work as leaders of their subordinate. Clear plans
and sound organization set a stage but it requires a manager to direct and lead his
men for achieving the objectives. Directing function is quite comprehensive, it
involves directing as well as raising the morale of subordinate. It also involves
communicating, leading and motivating. Leadership is essential on the part of
managers for achieving organizational objectives.
4. Controlling: Is an important function of management,it is necessary in the case of
individuals and department to avoid wrong actions and activities.

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Controlling involves three broad aspects
a) Eestablishing standard of performance
b) Measuring work in progress and interpreting result achieved.
c) And Taking corrective measure if required.
Business plans do not give positive result automatically; managers have to exercise
effective control in order to bring success to a business plan. Control is closely
linked with other managerial functions. It is rightly treated as the soul of management
process. It is true that without planning there will be nothing to control. It is
equally true that without control planning will only be an academic exercise,
controlling is continues' activity of a supervisory nature.
5. Motivating: motivating is one of the managerial function in which a
manager motivate his men to give their best to the organization. It means to encourage
people to take more interest and initiative in the work assigned to them. Organizations
prosper when the employees are motivated through special efforts including
provisional of facilities and incentives. Motivation isaactually inspiring and
encouraging people to work more and contribute more to achieve organizational
objectives. It is a psychological process of great significance.
6. Co-coordinating: effective coordination and integration of activities of different
department are essential for orderly working of an organization. This suggests the
importance of coordinating as managerial function. A manager must coordinate
the work for which he/she is accountable. Coordination is rightly treated as the
essence of management. It may be treated as independent functions or as part of
organization function. Coordination is essential at tail levels of management. It gives one
clear-cut direction to the activities of an individual’s, and department. It also avoids
misdirection and wastages and brings unity of action in the organization.
Coordination will not come automatically or on its own special efforts are

13
necessary on the part of managers for achieving such coordination.
7. Staffing: staffing refers to work force required for the execution of a
business plan. Staffing as managerial function, involves recruitment, selection, appraisal
remuneration and development of managerial personnel. The need of staffing arises in the
initial period and from time to time for replacement and along with the expansion and
diversification of business activities. Every business unit needs efficient, stable,
and cooperative staff for the management of business activities. Work force is the
most important asset of a business unit in many organizations. Work force planning
and development activities are entrusted to personnel manager "right man for
the right job" is the basic principle in staffing.
8. Communication: today managers are responsible for communication to their
employee the technical knowledge, instruction, rules, and information required getting the
job done and recognizing that communication is a two-way process. Managers should be
responsive to feedback and upward communication.
Distinction between Management and Administration
There has been a controversy on the use of these two terms-management and
administration. Many experts make no distinction between administration and management
and use them as synonyms. Several AAmerican writers consider them as two distinct
functions.
The management experts like Elbourne, Unwick and Mary Follett regarded
'administration 1 and 'management' as synonymous and use them
interchangeably in their works. Nevertheless, Schuze and Sheldon found distinction
between these two concepts. According to them, the distinction is important to clearly,
understand the role of people in administrative positions versus those in managerial
positions.
Oliver Sheldon in his "the philosophy of management" defines

14
'administration as a function is concerned with the determination of the corporate policy,
coordination of finance, production and distribution, the settlement of the compass
(i.e., structure) of the organization, under the ultimate control of the
executive.' on the other hand, 'management is concerned with the execution of the
organization for the particular objects before it. Thus Sheldon declares administration as a
thinking process and management as doing process. In other words, management is
a concomitant of administration.
Administration and Management
Breach, E. (1958).Distinguishes administration and management, he consider management
as a social process entailing the responsibility for effective planning, regulation,
coordination, and control of operations, including the responsibility for personnel
supervision. According to him, the administration is that part of management
that is concerned with the installation and carrying out the procedures by which
the progress of activities is regulated and checked against plans.
Few authors treat administration as part of management. These three points of view are
explained below:
Administration is different form management: according to this viewpoint, administration is
a higher-level activity while management is a lower level function. Administration is a
determinative function concerned with the determination of objectives and policies while
management is an executive function involving the implementation of policies and
direction of efforts foot the achievement of objectives, largely American experts
on management hold this view.
American experts such as Florence, Lansburg, Haimann, milward,
Mcfarland, Spriegel, Schulze, and Tead also hold this view that administration involves
decision-making and policy-formulation while management is concerned with
the execution of policies and supervision of work.

15
According to them, administration is superior to management as the latter has
only a peripheral role in determination of objectives and policies. Administration
is a part of management: according to the European school ofthought, management
is a wider ten including administration and organization. This viewpoint has been
propounded by breach. According to him, "management is the generic term
for the total process of executive control involving responsibility for
effective planning and guidance of operations of an enterprise. Administration is
that part of management which is concerned with the installation and carrying out of the
procedures by which the program is laid down and communicated and the
progress of activities is regulated and checked against plans". Kimball and
Kimball, Richman and Copen also hold similar views. According to them,
administration is only an implementing agency while management is
determinative. Thus, the European viewpoint is exactly opposite to the American
opinion. Administration and management are one: many writers like
HenriFayol, WilliamNewman, ChesterBarnard, GeorgeTerry, Louis. A. Allen, koontz,
and o'donnell make no distinction between management and administration.
According to Newman, management or administration is "the guidance,
leadership, and control of the efforts of a group of individuals towards some
common goals". According to Fayol, all undertakings require the same
functions and all must observe the same principles.
There is one common science which can be applied equally well to public and private
affairs. Therefore, the distinction between administration and management is
superfluous or academic. In actual practice, the two terms are used interchangeably. The
term administration is more popular in government and other public organizations
while the word management is commonly used in the business world, where economic
performance is of primary importance. The foregoing description reveals that
both management and administration based upon the same set of principles and
16
functions. It may be possible to make theoretical or conceptual distinction between the
two. However, in practice such a distinction is misleading. In order to resolve the
terminological conflict between administration and management, we may classify
management into the following;
Administrative Management and Operative Management
Administrative management involves determination of objectives and policies whereas
operative management is primarily concerned with the execution of plans for the
achievement of objectives. At every level of management, an individual manager
performs both types of functions. Every manager spends a part of his time on
administrative management and the remaining time on operative management
LEVELS OF MANAGEMENT
Every business organization, irrespective of its size, has many managerial positions in its
structure. These positions are created through the process of delegation of authority
from top to lower levels. Authority, responsibility, functions, roles, and relationship
mark each position.
The contents and nature vary, depending in the level at which the position lies. As one
moves upward in the organization, the managerial position plays an important role, larger
the contribution, greater the authority and higher the responsibility. These managerial
positions lying in the chain of command may be classified into various groups or
levels of management. Broadly speaking, an organization has two important
levels of management namely; Functional and operative. The functional level is
concerned with the process of determining primary objectives, formulating
basic policies, making vital decisions and controlling and coordinating
activities of personnel. The operative level of management is related to
implementation of plans and decisions, and pursuit of basic policies for achieving the
objectives of the organization.

17
.generally, the levels of management consisting of various managerial positions in the
structure of an organization differ from one organization to another, depending on the
size of business activity, philosophy of management, span of control and other
related factors. But, in a joint stock company, for conducting its business
efficiently, managerial personnel may be placed in three levels that is top, middle
and lower or supervisory level.
1. Top Level Management
The owners generally occupy the top-level management. In a joint stock
company, equity shareholders are the real owners of the company. Thus, they elect their
representatives as directors; form a board, known as board of directors, which
constitutes the top level of management. Besides the board, other functionaries including
managing director, general manager or chief executive to help directors, are included in
this level. It is the highest level in the managerial hierarchy and the ultimate source of
authority in the organization. The top-level managers are accountable to the owners
and responsible for overall management of the organization.
The major functions of the top-level management are as under:
A. To make a corporate plan for the entire organization, covering all areas of
operations.
B. To decide upon the matters that are vital for the survival, profitability, and growth of the
organization such as introduction of new product, shifting to
new technology and opening new plant etc.
C. To decide corporate goals'
D. To decide on the structure of organization, creating various positions there in.
E. To exercise overall managerial control through the process of reviewing over all
financial and operating results.
F. To make decisions regarding disposal and distribution of profits.

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G. To select key officials and executives for the company.
H. To coordinate various sub-systems of the organization.
I. To maintain liaison with outside parties having a stake in business such as
government, trade union and trade associations etc.
J. To formulate basic policies and providing direction and leadership to the organization
as a whole.
2. Middle Level Management
In order to fill up the gap that exists between functional and operative level, some
managerial positions are created at the middle level of management. Middle level
management consists of departmental managers, deputy managers, supervisor, and
administrative officers etc. These executives are mainly concerned with the overall
functioning of their respective departments. They act as a link between top and lower
lever mangers. The activities of middle level managers centre's around
determining departmental goals and devising ways and means for accomplishing
them.
The main functions performed by these managers are as under:
A. To prepare departmental plan covering all activities of the department
within the basic framework of the corporate plan.
B. To establish departmental goals and to decide upon various ways and means
for achieving these goals to contribute to organizational goals.
C. To perform all other managerial functions with regard to departmental
activities for securing smooth functioning of the entire department
D. To issue detailed orders and instructions to lower level managers andcoordinate the
activities of various work units at lower level.
E. Middle level mangers explain and interpret policy decisions made at the top level to
lower level mangers.

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3. Lower Level or Supervisory Level Management
Lower-level management is known as supervisory management, because it is concerned
mainly with personal oversight and direction of operative employees. It consists of
factory supervisor, superintendents, supervisors, sales supervisors, accounts officers etc.
A. They directly guide and control the performance of rank and file workers.
B. They issue orders and instructions and guide day to-day activities.
C. They also represent the grievances of the workers to the higher levels of
management.
D. planning of day to day work
E. Assignment of jobs and issuing orders and instructions
F. Supervising and guiding workers
G. Maintaining close personal contacts with workers to ensure discipline
'and team-work
H. Evaluating operating performance
I. Sending reports and statements to higher authorities
J. Communicating the grievance and suggestions of workers to higherauthorities.
NATURE OF MANAGEMENT
To understand the basic nature of management, it must be analyzed in terms of art and
science, in relation to administration, and as a profession, in terms of managerial
skills and style of managers.
MANAGEMENT IS COMBINATION OF ART AND SCIENCE
Management knowledge exhibits characteristics of art and science, the two not mutually
exclusive but supplementary. Every discipline of art is always backed by science that is
basic knowledge of that art. Similarly, every discipline of science is complete only
when it is used in practice for solving various kinds of problems faced by human beings
in an organization or in other fields of social life that is more related to an art. Art deals with

20
 an application of knowledge personal skill and expertise in a specific situation for efficiently
achieving a given objective. It is concerned with the best way of doing things and is
consequently, personalized in nature.
During the primitive stages of development of management knowledge, it was considered
as an art. There was a jungle of managerial knowledge. It was not codified and systemized.
People used it to get things done by others, in their own way giving an impression that
whosoever uses it, knows the art of using it. This kind of loose and inadequate
understanding of management supported the view that it was an art.
Management as a bScience
Science means a systematic body of knowledge pertaining to a specific field of study. It
contains general principles and facts which explain a phenomenon, these
principles establish cause-and-effect relationship between two or more factors.
These principles and theories help to explain past events and may be used to predict
the outcome of actions. Scientific methods of observations and experiments
are used to develop principles of science. The principles of science have universal
application and validity.
Thus, the essential features of science are as follows:
I.Basic facts or general principles capable of universal application
II.Developed through scientific enquiry or experiments
III.Establish cause and effect relationships between various factors.
IV.Their validity can be verified and they serve as reliable guide for predicting future events.
Let us now examine as to what extent management satisfies the above conditions:
1. Systematic body of knowledge: management has a systematic body of
knowledge consisting of general principles and technique; these help to
explain events and serve as guidelines for managers in different types of
organizations.

21
 Universal principles: scientific principles represent basic facts about a
particular field enquiry. These are objective and represent best thinking on the subject.
These principles may be applied in all situations and at all times. Exceptions, if any,
can be logically explained. For example, the law of gravitation states that if you throw
an object in the air it will fall on the ground due to the gravitational force of the
earth. This law can be applied in all countries and at all points of time. It is as
applicable to a football as it is to an apple falling from tree. Management
contains sound fundamental principles that can be universally applied. For
instance, the principle of unity of command states that at a time one employee
should be answerable to only one boss. This principle can be applied in all types
of organization-business or non-business. However, principles of management
are not exactly like those of physics or chemistry. They are flexible and need to
be modified in different situations.
2. Scientific Enquiry and Experiments: Scientific principles are derived through
scientific investigation and reasoning. It means that there is an objective or
unbiased assessment of the problem situation and the action chosen to solve
it can be explained logically. Scientific principles do not reflect the opinion of
an individual or of a religious guru. Rather these can be scientifically proved at
any time. They are critically tested. For example, the principle that the earth
revolves around the sun has been scientifically proved. Management principles are
also based on scientific enquiry and investigation. These have been developed
through experiments and practical experience of a large number of managers. For
example, it has been observed that wherever one employee has two or more bosses
simultaneously, confusion and indiscipline are likely to arise, with regard to
following the instructions.
Cause and effect relationship: principles of science lay down a cause and effect
relationship between related factors. For example, when water is heated up to 100°c, it starts
22
 boiling and turns into vapor. Similarly, the principles of management establish cause
and effect relationship between different variables. For instance, lack of balance
between authority and responsibility will cause management to become ineffective.
Tests of validity and predictability: validity of scientific principles can be tested at
any time and any number of times. Every time the test will give the same result.
Moreover, the future events can be predicted with reasonable accuracy by using
scientific principles. For example, the law of gravitation can be tested by throwing various
things in the air and every time the object will fall on the ground. Principles of management
can also be tested for their validity. For example, the principle of unity of
command can be tested by comparing two persons, one having a single boss and
other having two bosses. The performance of the first person will be higher than
that of the second.
Thus, management is undoubtedly a science. It contains a systematic body of knowledge
in the form of general principles which enjoy universal applicability.
However, management is not as exact a science like physics, Chemistry,
biology and other physical sciences. This is because management deals with
people and it is very difficult to predict accurately the behavior of living human
beings. Management principles are universal but they cannot be expected to give
exactly the same results in every situation. That is why management is known
as a soft science. Management is a social science. It is still growing, with the
growing needs of human organizations.
Management as an Art
Art implies the application of knowledge and skills to bring about the desire results. The
essential elements of art are:
I.Practical knowledge
II.Personal skill

23
III.Result oriented approach
IV.Creativity
V.Improvement through continuous practice
Let us judge how far management fulfills these requirements:
I.Practical knowledge: every art signifies practical knowledge. An artist not only
learns the theory but also its application in practice. For example, a person may have
adequate technical knowledge of painting but he cannot become a good painter
unless he knows how to make use of the brush and colors. Similarly, a person cannot
become a successful manager simply by reading the theory and getting a degree or
diploma in management. He must also learn to apply his knowledge in
solving managerial problems in practical life. A manager is judged not just by
his technical knowledge but by his efficiency in applying this knowledge.
II.Personal skill: every artist has his own style and approach to his job. The success of
different artist differs even when all of them possess the same technical
knowledge or qualifications. This is due to the level of their personal skills.
For example, there are several qualified singers but Lata Mageshkar has
achieved the highest degree of success. Similarly, management is
personalized. Every manager has his individual approach and style in solving
managerial problems. The success of a manager depends on his personality in
addition to his technical knowledge.
III.Result-oriented approach: Arts seeks to achieve concrete results.
The process of management is also directed towards the accomplishment of
desirable goals. Every manager applies certain knowledge and skills to achieve the
desired results. He uses men, money, materials and machinery to promote the
growth of the organization.
IV.Creativity: art is creative and an artist aims at producing something that had not existed

24
 before.
Therefore, every piece of art requires imagination and intelligence to create.
Like any other art, management is creative. A manager effectively combines
and coordinates the factors of production to create goods and services molding
the attitude and behavior of people at work, towards the achievement of the desired
goals is an art of the highest order.
V.Improvement through people: practice makes one perfect. Every artist
becomes more and more efficient through constant practice. A dancer, for
example, learns to perform better by continuously practicing a dance.
Similarly, manager gains experience through regular practice and becomes more
effective.
Thus, "management is both a science as well as an art". It is a science because it
has an organized body of knowledge consisting of certain universal facts. It is known as an
art because it involves creating results through practical application of
knowledge and skills. However, art and science are complementary to each
other, they are not mutually exclusive. Science teaches one to know and art to
do. Art without science has no guide and science without art is knowledge wasted. For
example, a person cannot be a good surgeon unless he has scientific
knowledge of human anatomy and the practical skill of applying that
knowledge in conducting an operation.
Similarly, a successful manager must know the principles of management and acquire
applying those principles for solving managerial problems in different situations.
Knowledge of principles and theory is essential, but practical application is required to
make this knowledge fruitful. One cannot become an effective manager simply
by learning management principles by heart. Science (theory) and art (practice)
are both essential for the success of management.

25
 Management as a Profession
A profession is calling that requires specialized knowledge and often, long intensive
academic preparation. The essential features of profession are as follows:
I.Well defined body of knowledge
II.Restricted entry Service motive
III.Code of conduct
Let us examine to what extent management fulfills the above requirements:
I.. Specialized body of knowledge: Every professional has a well-defined body of
knowledge relevant to the areaof specialization. In order to practice a person
required specialized knowledge of its principles and techniques. Moreover, h£-
must make deliberate efforts to gain proficiency unit. There exists a substantial
and rapidly expanding body of knowledge in management. A manager must
have intensive devotion and involvement to acquire expertise in the science of
management. In addition, there should be competent application or judicious
utilization of this knowledge in solving complex problems. Today, management
is a separate discipline having a specialized and organized body of knowledge.
II.. Restricted Entry: there exist institutions and universities to impart
education and training for a profession.
No one can enter a profession without going through the prescribed course of learning.
For example, one must pass the chartered accountancy examination to practice
accountancy profession. Many institutes of management have been set up in
Nigeria and abroad which offer courses for specialized training in management.
Several management consultancy firms have also come into existence to offer advice
for solving managerial problems. Formal education and training has become very
helpful in getting jobs as managers. However, no minimum qualification or
course of study has been prescribed for managers by law.

26
 Service motive: a profession is a source of livelihood but professionals are
primarily motivated by the desire to serve the community. For example, a doctor earns his
living from his medical practice. Nevertheless, he does not treat his patients only
for the sake of money. He has a concern for the suffering of others and a
desire to help the community. Therefore, a profession enjoys high community
sanction or respect. Similar is the case with managers. A manager of a factory is
responsible not only to its owners, but he is also expected to produce quality
goods at a reasonable cost and to contribute to the well-being of the community.
Representative association: in every profession, a statutory association
or institution regulates that profession. For example, the institute of the chartered
accountants of Nigeria establishes and administers standards of competence for the
auditors. In management, also associations have been established both in Nigeria and
abroad. Managers have formed associations for the regular exchange of
knowledge and experience in Nigeria, there is the national institute of management.
However, this association does not have the statutory power to regulate the activities
of mangers. No university accepted criteria or standard exists for their
evaluation. Membership of this association is not compulsory in order to become
a manager.
III. Code of conduct: members of one profession have to abide by a code of conduct that
contains rules and regulations providing the norms of honesty, integrity, and professional
ethics. For example, a chartered accountant is not expected to commercially advertise
his firm. The code of conduct is by the representative association to ensure self-
discipline among its members. Any member violating the code can be punished and his
membership can be cancelled. The all Nigeria management association has framed code of
conduct for managers. The code requires the managers to fulfill their social and moral
obligations. Members of the association are expected not to disclose the trade
secrets of their employers and to make personal gain from the knowledge of'
27
internal working of the organization. However, this code does not have legal
sanctions. However, observing business ethics is always helpful in becoming a
more effective manger.
The above discussion reveals that management fulfills several essentials of profession.
However, like other professions, management does not restrict the entry into managerial
jobs to people with a special academic degree. No minimum qualifications have been
prescribed for managerial personnel. No management association has the authority to grant
certificates of practice or to regulate entry into management careers. Few managers have
uniform background in terms of education and experience. The management
associations have no legal right to enforce their code of conduct. There is no
single group to which the majority of the managers belong and whose authority
is recognized by law as a sanction. Moreover, there is no single client group to which
manages owe complete loyalty. Doctors owe their loyalty to patients. However,
managers are responsible to the owners as well as to other social groups.
Thus, management is, not strictly speaking, a full-fledged profession like medicine, law, or
chartered accountancy. Some experts believe that there should be no control over entry
into management careers. According to peter f. Drucker, (1954) "management is a
practice rather than a science or profession through contains elements of both. No
greater damage could be done to economy and society than to attempt to professionalize
management by licensing managers of by limiting access to management
topperformance and utility. And like other sophisticated electronic equipment,
information systems do not work all the time, resulting in costly downtime.Behavioral
limitations. Information technology allows managers to access more information than ever
before. But too much information can overwhelm employees, cause stress, and
even slow decision making. Thus, managing the quality and amount of
information available to avoid information overload is important.

28
 SCOPE OF MANAGEMENT
Field of management is very wide. The operational areas of business management may
be able to be classified into the Following categories;
B. Production management: Production management implies planning,
organizing, directing and controlling the production function to produce
the right goods, in right quantity, at the right time and at the right cost. It includes
the following activities:
I.Designing the product
II.Location and layout of plant and building
III.Planning and control of factory operations
IV.Operation of purchase and storage of materials
V.Repairs and maintenance
VI.Inventory cost and quality control
VII.Research anddevelopment, etc.
C. Marketing management: Marketing management refers to the identification of
consumers' needs and supplying them the goods and services that can satisfy these
wants. It involves the following activities:
I.Marketing research to determine the needs and expectation of consumers
II.Panning and developing suitable products the customers
III.Getting appropriate price
IV.Selecting the right channels of distribution, and promotional activities like advertising and
salesmanship to communicate with the customers
I.Financial management: financial management seeks to ensure the right amount and
type of funds to business at the right time and at reasonable cost. It comprises the following
activities:
estimating the volume of funds required for both long-term and short-term needs of
business
29
 II.Selecting the appropriate source of funds
III.Raising the required funds at the right time ensuring proper utilization and
IV.Allocation of raised funds to maintain safety and liquidity of funds and the
creditworthiness and profitability of Business and administration of earnings.
Thus, financial management involves the planning and controlling of the financial
resources.
C. Personnel management: personnel management involves
Planning, organizing and controlling the procurement, development, compensation,
maintenance, and integration of human resources of an organization. It consists of the
following activities:
I.Manpower planning
II.Recruitments,
III.Selection,
IV.Training
V.Appraisal,
VI.Promotions and transfers,
VII.Compensations,
VIII.Employee welfare services, and
IX.Personnel records and research, etc.

CHAPTER TWO
HISTORICAL BACKGROUND OF MANAGEMENT
The recorded had taken place. These agricultural civilizations existed in India, china and

30
Egypt according to Peter Drucker these irrigation civilizations "were not only one of
the great ages of technology, but it represented also mankind's most productive
age of social and political innovation". As the villages grew and civilizations
evolved, the managers too grew and evolved. They become the priests, the kings,
the ministers holding power and wealth in the society. Written documents found
in the Sumerian civilization that flourished some 5000 years ago contains evidence
of management control practices. As early as 4000 B.C, the Egyptians were aware of
the importance of planning, organizing, and controlling. The huge pyramids of
Egypt stand a mute testimony to the managerial and organizational abilities of
the ancient Egyptian civilization. One pyramid required 1,00,000 men working
for 20 years, covering 13 acres, using 2.3 million blocks, each weighing an
average of 2.5 tons. To produce such a monument required proper planning, work
allocation, organizing, directing, controlling, and decision-making.
In the Grecian civilization, we find the origin of the scientific method in the famous
Socratic discourses. The Romans who built a vast empire extending from Britain
into the west to Syria in the east ruled it for many years only because of their
superior and advanced managerial abilities.
In ancient India Kautilya wrote his Arthashastra in about 321 B.C. the major theme of
which was political, social and economic management of the state. The study of
administration of the cities of Mohenjodaro and Harappa of the ancient Aryans in
2000 B.C., Buddha's order and the Sanghain 530 B.C., provide evidence about the use
of the principles of management.
During the 13"'and 14th centuries ad, the large trading houses of Italy needed a
means of keeping records of their business transactions. To satisfy their needs Lucapacioli
published a treatise in 1494 describing the double entry system of book-keeping for
the first time. Management thought is an evolutionary concept. New theories and

31
 principles were suggested along with new developments in the business field. The
new thoughts supplemented the existing thoughts and Theories. This is how
developments are taking place continuously about management
thoughts/theories. Management thinkers and thinkers from other fields such as
economics, psychology, sociology, and mathematics have also made their
contribution in the evolution of management thought.
THE EVOLUTION OF MANAGEMENT THOUGHT
This evolution of management thought can be studied in the following
Four broad stages:
The classical theory of management (classical approach): it includes the
following three streams of thought:
I. Bureaucracy,
II.Scientific Management; and
III.Administrative Management.
The neo-classical theory of management: it includes the following
two streams:
I.Human Relations Approach and
II.Behavioral sciences approach.
The Modern Theory of Management: it includes the following three
streams of thought:
I. Quantitative approach to management (operations research);
II.Systems approach to management and
III.Contingency Approach to Management.
It is rather difficult to state the exact period of each stage in the evolution of management
thought. Experts, in general, agree with the following period for each
thought/school.

32
Classical school/thought: 1900 to 1930. Neo-classical school/thought: 1930to 1960.
Modern school/thought: 1960 onwards.
CONTRIBUTORS TO MANAGEMENT THOUGHT
The development of management thought is the result of contributions made by
pioneering management thinkers and experts from other social sciences such as
economics and psychology.
1. Contribution of F.W. Taylor to Management Thought.
F.W. Taylor is one of the founders (the other two are max Weber and Henri Fayol) of
classical thought/classical theory of management. He suggested scientific approach
to management also called scientific management theory. F.W. Taylor (1856-1915) is
rightly treated as the father of scientific management. He suggested the principles
of scientific management. His concept of scientific management developed
into a movement and dominated the industrial management for several decades
after him. His concepts and principles were refined and popularized by several of
his followers, notable among them being Henry Gantt, the Gilberths and Emerson.
Principle of Scientific Management
According to Taylor, scientific management in its essence consists of a philosophy that
results in a combination of four important underlying principles of management.
First, the development of a true science, second, the scientific selection of the
workers, third, their scientific education and development, fourth, intimate co-
operation between management and their men. The basic principles of Taylor philosophy of
scientific management are as noted below:
These principles of scientific management are most crucial aspects of scientific
management.
The development of "one best way" of doing a job, this suggests the
task of finding out the best method for achieving the objectives of a

33
given job. The standards are decided scientifically for jobs and
incentive wages were paid for all production above this standard.
Here, job analysis and standardization of tools, equipment, machinery,
etc. are required Scientific selection of workers and their development through
proper training. scientific approach by management. The management has to
develop a true science in all fields of work activity through scientific
investigation and experiments.
Close co-operation of managers and workers (labour management Relations) for a better
results and understandings.
FEATURES OF SCIENCE MANAGEMENT
Scientific task setting: F.W. Taylor suggested the introduction of standard task that every
worker is expected to complete within one day (working hours) the task is to be
calculated through careful scientific investigation. For this, work study (i.e.
Method study and work measurement study) is essential, Taylor suggested time
study, motion
study, fatigue study and rate-setting for the introduction of scientific
task. Time study is the art of observing and recording the time required
to do each detailed element in an industrial operation. Motion study
refers to the study and analysis of the movements of an operator while
performing a job so that attempts can be made to remove
useless/unwanted movements from the process. Both the studies
together help in determining the best method of performing a job and
the standard time allowed for it. This replaces the old rule-of-thumb
knowledge of the workers. The workload, the best method of
performing the same, and the time within which it must be performed
are suggested in this feature of scientific management by Taylor.

34
 I.Planning the Task: To perform a task by every worker Taylor suggested there
is a need for planning, the production activity accurately. This idea of planning is
Taylor's gift to the science of management. Planning of task gives answers
to the following questions. What has to be done, how it is to be done, where the
work
shall be done and when the work shall be done.
II.Scientific selection and training of workers: Taylor suggested the need of scientific
selection of workers for the plant/production activities. The procedure of
selection must be systematic to select the best and the most suitable persons for
different types of jobs. Correct placement of workers is equally important he also
suggested the need of training of workers to raise their ability or efficiency. Training is to
be integrated with the promotion policy. He also suggested differential Piece wage
plan for compensation payment to workers. He also suggested the importance of cordial
relations between management and workers.
III.Standardization: Taylor suggested the importance of standardization of
tools and equipment, materials, conditions of work and speed of machines. This
brings co-ordination in different activities and all workers will be able to
perform the task assigned easily. The workers will have satisfactory working
conditions for
work due to such standardization.
IV.Specialization: Taylor suggested specialization in the administrative and
organizational setup of the plan he suggested functional foremanship. Taylor
recommended eight functional supervisors for different activities and functions.
The supervisors suggested by him are like route clerk, instruction card clerk,
speed
boss etc. Such specialization is useful for raising efficiency of the
whole organization.
35
V.Mental Revolution: the techniques suggested by F.W. Taylor in
his scientific management are different as compared to traditional
techniques and methods. Naturally, these techniques can be used only
when workers supervisors and managers accept them in theory and in
practice for this, mental revolution on their part is essential the
success of scientific management rests on the attitude of management
and workers. They must give up their old ideas and methods and must
accept new scientific methods. For this, mental revolution on the part
of both is essential. Cooperation from workers and management for
the introduction of scientific management depends on this mental
revolution.
BENEFITS/ADVANTAGES OF SCIENTIFIC MANAGEMENT
A. Application and use of scientific methods.
B. Wide scope for specialization and accurate planning.
C. Minimum wastages of materials, time, and money.
D. Cordial relations between workers and management.
E. Benefits to workers (higher wages and less burden of work),
management (cost reduction, better quality productions) and may lack
essentials.
F. Favor of progressive personnel policies for the creation of efficient and satisfied
labour force. He suggested the need of personnel department and its
importance.
G. He favored incentive wage payment to workers.
H. Industrial fatigue and rest pauses: Taylor noted the nature of industrial fatigue and
suggested the introduction of suitable rest pauses for removing such fatigue of
workers. He wanted to reduce the burden of work on workers with scientific methods.

36
I. Time and motion study: Taylor introduced new concept like time study, motion
study and work-study in the field of industrial management such concepts are for
the introduction of new methods that will be more quick, scientific and less
troublesome to workers.
The positive view of scientific management was described by Taylor as "science,
not rule of thumb; harmony, not discord; co-operation, not individualism; maximum
output in place of restricted output.
The development of each man to his greater efficiency and prosperity F.W. Taylor rightly
treated as father of scientific management. In fact, through his concept of scientific
management, Taylor actually developed a new science of management that is
applicable not only to management of industrial units but also to the management of all
other business units. He suggested certain techniques that can be applied
purposefully to all aspects of management of business activities. This is treated as
Taylor's unique contribution to management thought. The fundamental principles
suggested by F.W. Taylor in his scientific management can be treated as his
contribution to management thought. In fact, Taylor suggested scientific
attitude and a new philosophy for discarding old and outdated ideas and techniques. He
was instrumental for the introduction of new ideas and techniques in the science of
management. These ideas aid techniques are now accepted in theory as well as
in practice.
CRITICISM OF SCIENTIFIC MANAGEMENT OR OPPOSITION TO
SCIENTIFIC MANAGEMENT
Scientific management has wider economic and social significance. It has succeeded in
revolutionalizing the very concept of management by offering a novel approach to
the managers in managing men, materials, and methods. In spite of several
benefits, Taylor's scientific management concept has widely been criticized
by employers, workers, trade unions, and theorists. They oppose Taylor's
37
scientific management on different grounds. The points of criticism we as explained
below:
Criticism from Employers
Huge investment required: heavy investment is necessary for reorganization of
preliminary standardization of tools, machines and equipment and conducts of time and
motion studies and other research activities for the introduction of scientific
management. Such investment may not be possible in small and medium size
enterprises. Sudden change may disturb existing working arrangement: sudden change
due to the introduction of scientific management may paralyze the existing
arrangement of work and will bring the entire organization in difficulties. There will
be loss due to reorganization, if scientific management introduced.
Unsuitable to small units: small manufacturers argue that the concept of scientific
management is not suitable to their units due to financial and other difficulties.
Benefits after a long period: the benefits of scientific management will be available only
after a long period and the business unit may come in financial and other difficulties
during the process of introduction of new changes as suggested in the
scientific management.
Huge overhead expenses required: introduction of scientific management Square criticism
from workers and trade unions.
Why did trade unions oppose scientific management?
Heavy burden on workers: workers feel that they will have to share more burden of
work because of introduction of scientific management. They also are at loss from all
side. Workers and their unions feel that it will lead to exploitation and they
oppose scientific management on this group.
B.Reduces initiative among workers: workers and trade unions argue that scientific
management will destroy their initiative and they will be converted into

38
machines in the production process with no freedom, initiative and choice.
Similarity, over-specialization (excessive specialization) will lead to monotony
and mental fatigue.
Hence, they oppose Taylor's scientific management.
C. Possibility of Unemployment: workers and their unions also feel that
scientific management will lead to unemployment and that workers will be
removed due to the use of labour-saving devices. This will lead to loss of employment
and income to workers. This is likely to make trade unions weak and hence they
oppose scientific management.
D. Exploitation of workers: workers argue that they will be exploited
under scientific management, as they will have to share more burden of work
without corresponding increase in the wage rate. Trade unions also oppose to
scientific management as it is likely to put more burden of work on the workers
without corresponding monetary benefit.
E. Possible Adverse Effects on Workers Unity: trade unions alsooppose
scientific management, as they fear that the unity among workers will be
adversely affected. Workers will be divided into efficient and inefficient
categories. In addition, different piece rate plans will be introduced in place of
uniform wage rate. As a result, workers will be divided. Workers getting high
salary will not be interested in the union activities and this will make their union
week
and ineffective. Even more unions and rival unions will be formed.
In Brief, trade unions strongly criticize scientific management as it breaks Solidarity of
workers. The criticism of scientific management by employers and workers/trade
unions is not based on sound reasoning. Their arguments are not based on realities. It is
possible to give counter-arguments to or point of criticism noted by them. For

39
example, employers object scientific management on the ground of huge investment
for its introduction. It is true that huge investment will be necessary but it is likely
to give greater return in due course. In addition, scientific management will bring
down the cost and thereby enhance the profits.
CONTRIBUTION OF HENRI FAYOL TO MANAGEMENT THOUGHT
Henri Fayol (1841-1925), is the father of modern theory of general and industrial
management. The credit of suggesting the basic principles of management in an
orderly manner goes to Henri Fayol. After obtaining an engineering degree, Henri
Fayol, joined as chief executive in a coal mining company. He developed his
management principles and general management theory and published them in
the form of a book (in French) "general and industrial administration" in 1916.
It was translated into English in 1930. In due course of time, Henri Fayol came
to be recognized as the founder of modern management theory. His analysis of
management process acts as the foundation of the whole management theory and
the present superstructure of management has been built on it.
Henri Fayol suggested important qualities of managers and stressed the need for
raising such qualities. He developed fourteen principles of management out of his
practical experience. These principles are universal in character and are applicable to
all types of organizations. Each principle suggested by him has specific meaning and
significance.
According to him, managers in all organizations need to follow these principles/
guidelines while managing the affairs of their business units. The management
principles suggested by him in 1916 are universally accepted by modern
authorities on management and are treated as valid even to this day. This is
because these principles are practical in nature and result oriented. In facts this
principles are the outcome of his long experience as a practicing manger this

40
basic principles are useful for effective management process such as; planning,
Organizing, Staffing, leading, Coordinating and Controlling. He incorporated
these principles in the management theory suggested by him. The principles of
management suggested by him are useful not only in business/industrial
enterprise but also in other organization such as colleges, hospital charitable
institution and government department .Due to his contributions to
management theory and principles ,Henri Fayol becomes the father of
management thought. Fayol is the first management thinker who provides the
conceptual frame work of the function of management in his book, General
Industrial Management.
Management according to Fayol is: Planning, Organizing, Staffing, Commanding,
Coordinating, Controlling
2. CONTRIBUTION OF ELTON MAYO TO THE DEVELOPMENT OF
MANAGEMENT THOUGHT.
Elton Mayo (1880 - 1949) is recommended as the father of human relations school. He
introduced human relations approach to management thought. His contribution
to the development of management thought is unique and is treated as human relations
approach to management. Mayo led the team for conducting the study at western
electric's Hawthorne plant (1927 - 1932) to evaluate the attributes and
psychological reactions of workers in on-the-job situations. His associates included
John Dewery, Kurt Lewin and others. Mayo and his associate came to the .following
conclusions from their famous hawthorn experiments
The amount of work to be done by worker is not determined by his physical capacity but by
the social norms.
Non-economic rewards play s significant role in influencing the behaviour of the workers.
Generally, the worker do not reacts as individuals but as members of groupInformal leaders

41
play an important part in setting and enforcing the group norms.
Mayo discussed the factors that cause a change in human behavior. He concluded that the
cause of increase in the productivity of the workers is not a single factor like react
pauses or changing working hours but a combination these and several other factors
such as less restrictive supervision, giving autonomy to workers, allowing the
formation of small cohesive groups of workers and so on. Today, as a result of mayo
and his associates, the managers in different organizations recognize that
worker' performance is related to psychological, sociological, and physical factors.
Thus, hawthorn study was an important landmark to study the behavior of worker
and his relationship to the job, his fellow workers, and organization. It proved that informal
work groups and the opportunity to be heard and participate in decision-making have an
important impact on the productivity of the workers.
Mayo is one leading management thinkers and a leading advocate of neo-
classicaltheory. The concept of participative management style was suggested in the neo-
classical theory. The human relations approach suggested by mayo has special
importance in the present period. He rightly suggested the importance of
democratic leadership and participative management style for running
business activities efficiently. The role of people (workers) is clearly suggested by
mayo. He rightly suggested that management is not a mechanical process but a study of
people involved in the production activities. Management will get positive response from its
employees when their actions, sentiments and expectations are given due attention.
Mayo is best known for his work on the project commonly referred to asthe Hawthorne
studies. They were conducted in the Hawthorne plant Western electric company
in the USA between 1927 and 1932. It is said the mayo applied psychological
approach to management for the first time; he used clinical and diagnostic methods. Mayo
has drawn various conclusions from these studies. The Hawthorne studies have
had a shattering impact on management thinking. Mayo is regarded as Revolutionary
42
thinker because of his contribution to the management thought in the recent period.
The credit of humanization of management with a view to achieve common interest
of management and workers goes to Elton Mayo.
Some of the major Findings of Hawthorne study we as noted below: -
A. Employee's behavior is influenced by mental attitudes and emotions including
prejudices.
B. The workers in a group develop common psychological bond uniting them as a
group in of informal organization.
C. In managing and motivating employee groups, humans and social motivation plays
greater role than financial incentive Management must understand that a
typical group behavior can dominate or even supersede individual propensities and
preferences.
When workers are given special attention by management, the productivity is likely to
increase irrespective of actual changes in the working conditions. Hawthorne
studies are primarily responsible for consideration of non-financial incentives
in improving productivity. Mayo pointed out that the organization is a social
system and informal organization is a reality. The knowledge of human nature
can solve many problems of management! He emphasized that successful
human relations approach can easily create harmony in an organization,
higher employee satisfaction, and great operational efficiency. Central to this
approach was an increased understanding of the individual worker with emphasis on
motivation, needs, interpersonal relationships and group dynamics mayo
believed that a factory is not only a workplace but also a social environment in
which the employees interact with each other this gave rise to the concept of
the 'social man' whose interaction with others would determine the quantity of the
work produced. Mayo developed his human relations theory of management on

43
his Hawthorne experiments. He introduced human relations approach to
management and is rightly considered as one of the pioneers of the human
relations theory management.
Features of Human Relations Approach
A business organization is not merely a techno-economic system but also a social System
and involves human element. an individual employee is motivated not merely by economic
incentives but also by non-economic incentives, psychological and social interests, needs
and aspirations. The informal groups in the organization are more important
than individuals are and play an important role in raising productivity. in place of task-
centered leadership, the employee-centered, humanistic, democratic and participative style
of leadership should be use because is more effective and productive employees are not
necessarily inefficient or negative in their approach. They are capable of self-
direction and control. Employee’s performance can be raised by meeting their
social and psychological needs cordial atmosphere at work place is also useful
for raising productivity. Management needs social skills along with technical
skills in order to create a feeling (among the employees) that they are a part
of the organization and not outsiders. Employees need respect and positive feeling
from the management. For this, employees should be encouraged to
participate and communicate freely their views and suggestions in the
concerned areas of decisionmaking.the management have to secure willing
cooperation of employees. The objectives before the management should be to secure
cooperative effort of its employees. For this, employees should be made happy and satisfy.
The features of human relations school (noted above) are important as
They were introduced in the management theory for the first time. At present, these
features are well recognized, and unique when suggested in 1930.
Human relations approach is a progressive development as compared to classical approach.

44
 Here, productivity is not treated merely as an engineering problem. Cooperation of
employees, team spirit and their satisfaction are treated as factors useful for raising
productivity. The human relations approach has put special stress on social needs and the
role of management in meeting such needs.
Limitations of Human Relations Approach
I.Too much importance to employees, and social needs: human relations approach
management has given to much importance to employees, their needs and
satisfaction.
It has given undue stress on the social side of management as compared to technical side. It
is, another extreme as compared to classical theory where employees were neglected
considerably. Human relations approach has also neglected many other aspects such
as organizational issues, environment at the work place, labour unions, structure
of the organization and so on.
II.Employee-oriented approach to a limited extent: it is argued that
human relations approach is apparently employee-oriented but in
reality, it is organization-oriented. Many measures are suggested for
the happiness and satisfaction of employees. Measures are suggested to satisfy
employees in order to achieve organizational objectives and
not for meeting the real needs of workers. Their participation in
management or upward communication with the management, etc. Is
outwardly employee-oriented and gives them a false of happiness. In
brief, the human relations approach is employee-oriented but to a
limited extent.
Faulty assumption in the theory: the human relations approach is
based on a wrong assumption that satisfied workers are more
productive. After 1950s, it was proved that productivity improvement,

45
 as a result of better working conditions and the human relations skills
of manager's did not result in productivity improvement as expected.
Thus, workers satisfaction is one but not the only factor which raises industrial
productivity.
III.Limited Importance to Economic Incentives:the human relations
approach has given limited importance to economic incentives inmotivating
employees. They prefer informal groups and cordial
relation among them. However, their interest and loyalty to the
organization largely depends on monetary incentives. Low wages
lead to labour turnover even when the good treatment is given to
employees.
The human relations movement is based on the experiments
conducted in the Hawthorne plant in Cicero (USA). The major
conclusion (of Hawthorne experiments) was that the workers
respond to their work situation as a whole and their attitudes and
social relations constitute an important part of the total situation. In
addition, the attitudes or workers and their relations with each other
and with the management would play a role in forming their attitudes
towards the total work situation. Elton Mayo conducted a series of
pioneering studies at the Hawthorne plant they proved to be of much
use in associating employees with the management for achieving
organizational objectives.
It is rightly pointed out that F.W Taylor in his contribution to
management though suggested rationalizing work for greater labour
productivity while Elton mayo recommended/advocated humanism
work for enhanced efficiency and personal satisfaction. The basic

46
purposes of both the approaches are identical. However, the
approaches of Taylor and mayo are different. Taylor's approach was
purely engineering while may referred to social needs of employees
and their satisfaction. Taylor's approach to scientific management
lacks human elements in the production process. He treated
employees as a cog in the wheel emphasizing on efficiency at all
costs, as if there is no difference between workers and machines.
Mayo applied psychological approach to management. He
recommended humanization of management for better results in
terms of production and productivity. He rightly suggested that
workers are human beings and not machines. They should be treated
with dignity and honour while on job. Both the approaches (of Taylor and mayo) are
supplementary in the present management thought. At present, stress is on
scientific management principles as well as on human approach to
management. Efforts are being made to create favorable organization climate for
achieving organizational goals. Taylor's approach is comparatively old and was
popular in the early decade of 19 century the human relations approach
(suggested by Elton mayo) is comparatively new and got popularity by 1930s.
3. SYSTEM APPROACH TO MANAGEMENT THOUGHT
Contributions to management though/theory after 1960 are covered by modem
management theories. Modem theories are based on classical and neo-classical
theories but consider the management problems as they developed in the
recent years. There are three streams under modern management theory. These
are:
A. Quantitative/mathematical approach to management.
B. System approach to management and

47
C. Contingency approach to management.
D. system managementschool
A system is an organized 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. Any organization is looked upon as an artificial system, the internal
parts of which work together to achieve established goals and the external parts of
achieve interplay with the environment including customers, the public,
suppliers, and government. The manager integrates available facilities to
achieve a goal by means of systems that relate activities required for the result. They
system serve as the media of through which the manager operates. An integrated
system can be used purposefully for the conduct of production, marketing,
distribution and other activities relating to business in an orderly manner. A
manager can conduct various activities in an orderly manner with the help of the
system established. A system is a set of interrelated and interdependent parts
arranged in a manner that produces s unified completely. Almost anything can be
viewed as a system. As per systems management schools, an organization is
looked upon an artificial system. Its internal parts work together to achieve
established goals and the external parts of achieve interplay with the
environment including customers, the public, suppliers, and government. The
manager integrates available facilities to achieve a goal by means of systems that
relate activities required for the result. In this way, systems management school helps
in achieving the established goals of the organization.
It is possible to establish such systems management organization in a business enterprise.
For these authorities, departments, etc. will be created. The work will be properly
distributed and various departments (sub-systems) will operate as per the
work assigned under the project. The computer can be used extensively for the execution
48
of systems management data processing work will become easy and quick. Systems
management enables a manager to work more efficiency because of easy
availability of information in different aspects of business.

Features of Systems Approach to Management

1. Open or closed system: 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. Tradition
organization theorists regarded organizations as closed systems while according to the
modern view organizations are open systems, always interacting with the environment.
Interdependent parts: a system is a set of interdependent parts
which together form a unitary whole that perform some function. An
organization is also a system that consists of our interdependent parts
viz., task, structure, people, and technology.
2. Consideration of whole system:No part of the system canbe
analyzed and understood 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. It means rather than dealing separately with
the various parts of one organization, the systems approach attempts to give the manager a
way of looking at the organization as a whole. For example, in order to
understand the operations of the finance or production or marketing

49
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.
3. 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. If the output is service,
materials are not included in the inputs. If we have manufacturing company,
output is goods or materials. If we have a consultancy firm, output is
information or advice. If we have a power generating company, output is
energy.
4. DefinedBoundaries: each system including an organization has its own
boundaries that separate it from other system in the environment. For
open systems, the boundaries are penetrable whereas for closed systems, they are
not. The boundaries for closed systems are rigid. In a business organization, it has many
boundary contacts or 'interfaces' with many external systems like
creditors,suppliers, customers, government agencies etc. The system is inside
the boundary, the environment is outside the boundary.
5. Synergy: output of a system is always more than the combined
output of its parts. This is called 'synergy1. In organizational terms
synergy means when separate department within an organization
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.
6. Feedback mechanism: a system can adopt and adjust itself to the
changing environment through the feedback mechanism. As
operations of the system proceeds information inform of feedback to
the appropriate people. This help to assess the work and if need be, to
50
get it corrected.
7. Multidisciplinary Approach: system approach, integrates anduses with profit ideas
emerging from different schools of thought.Management freely draws concepts and
techniques from many fieldsof study such as psychological, sociology,
ecology, economics, Mathematics, statistics, operations research, system
analysis etc. Important contributors to systems school of management include
Chester Barnard, Ludwig von Bertalanffy, Russell Ackoff, Kenneth Boulding and
William Scott.
From 1960s onwards, the management theorists and practitioners are referring
management concepts in systems phraseology. A system means to bring
together or to combine. When viewed from the systems angle, the organization
is seen as operating in an open system constantly interacting with its
environment. It receives external inputs in a continuous manner and transforms them
into outputs. Suitable adjustments and rectifications are also made as per the feedback
available. An organization which is not adaptive and responsive to its environment
will not survive or grow. An organization will have individuals, groups, formal
structures, goals, and resources. A manager has to see that all these parts
work in coordination in order to achieve organizational goals. Absence of
coordination will hamper the performance of the organization. The systems approach
suggests that the total performance of the organization will be effective
only when the different systems/units/activities are coordinated and integrated in an
efficient manner. For example, efficient manufacturing division needs the
support of efficient marketing division for achieving organizational objectives. If not, the
.total performance of the organization will be jeopardized. The managers, as
decision-making entities, have to regulate the sub-systems of the organization. They
should not work in isolation nut operate in coordination with others.
This will avoid shortfalls in different components and bring success to the organization.
51
The emphasis of systems approach is on interrelatedness of the parts of an
organization. The, introduction of integrated approach is tread as major
contribution of system theory. The system approach developed only after 1950 and is
the recent contribution to management thought. It stresses the interrelatedness and
interdependence of all activities within an organization. They systems theory considers
organization as an open, adaptive system which has to adjust changes in its
environment. It defines organization as a structured process in which individuals
Interact for attaining objectives.
Merits of Systems Approach
System approach to management is comparatively new to the management
though. This approach represents a refreshingly new thinking on organization and
management. It stresses that managers should avoid analyzing problems in isolation but
should develop the skills for integrated thinking on management problems. The systems
approach provides a unified focus to organizational efforts. It provides a strong
conceptual framework for meaningful analysis and understanding of
organizations. Systems approach provides clues to the complex behaviorof
organization.
The system theory suggests to practicing manager to study/analyze a particular element
by taking into consideration its interacting consequences with other element.
Varieties of systems concepts and perspectives were developed for managers.
The systems approach rightly points out the role of 'synergy' in management. Each
subsystem derives strength by its association and interaction with other sub-systems. As
a result, the overall outcome is more than the sum total of individual
contributions. The other contribution of systems theory is its treatment of organization
as an open system. The organization exhibits a holistic character.
Limitations of Systems Approach

52
The system approach is criticized on the ground that it is too abstract and vague. It is difficult
to apply it to practical problems directly andeasily. The systems theory/approach
fails to provide specific tools andtechniques .for the practicing
executives/managers.The systems approach does not recognize differences in
systems. Itfails to clearly, identify the nature of interactions
andInterdependencies between an organization and its externalenvironment it also
fails to offer a unified body of knowledge.
4. CONTINGENCY MANAGEMENT
School/Contingency Approach to Management Situation Approach
A common deficiency of the classical, behavioral, and quantitative schools is that they have
stress one aspect of the organization at the cost of others. The classical approach emphasizes
on 'task1 while behavioral approach emphasizes on 'people'. The stress of
quantitative approach is on 'mathematical decision-making'. However, it is
difficult to understand precisely which aspect is most useful and appropriate in a given
practical situation. This brings the need to develop me broad conceptual framework that can
help a manager diagnose a problem and decide which tool to tools will best do to
the job. The systems approach as well as contingency approach provides one
integrated approach to management problems. The contingency/situational
approach is the second approach (the first bring the systems approach) which
attempts to integrate the various schools of management thought in an
orderly manner. The contingency management approach is similar to known leadership
theory called situational leadership theory. The contingency approach is applicable
to leadership as well as to business management. This situational management approach is
relatively a new approach to management and is an extension of systems approach.
The basic theme of contingency approach is that organizations have to deal with
different situations in different ways. There is no best way of managing

53
applicable to all situations. In order to be effective, the internal functioning of the
organization must be consistent with the needs and demands of the external
environment. In other words, internal organization should have the capacity of face any
type of external situation with confidence.
Features of Contingency/Situation Approach
Management is entirely situation. The management has to use the measures/techniques
as per the situation from time to time. Management should match its approach as
per the requirements of the situation. The policies and practices used should
be suitable to environmental changes.
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
environment changes. Managers should realize that there is no one best way to manage.
They have to use management techniques as per the situation that they face.
According to contingency approach, management principles and concepts of different
schools have no universal/general applicability under all situations. This means
these schools have not suggested one best method of doing things under all
situations and at all times. The contingency approach has provided a solution to
this situation. As per the contingency approach, the task of managers is to try to identify
which technique or method will be most suitable for achieving the
management objectives under the available situation.
Managers have to develop a sort of situational sensitivity and practical selectivity
in order to deal with their managerial problems as they develop from time to time.
Contingency approach views are applicable in designing organizational structure
and in deciding the degree of decentralization in establishing communication
and .control systems and in deciding motivational and leadership approaches. In
brief, the contingency approach is applicable to different areas of organization and

54
management it is an attempt to integrate various viewpoints and fo synthesis
various fragmented approaches to management. The contingency approach is the
outcome of the research studies conducted by tom burns and G.W. Stalker,
James Thompson and others.
Merits of Contingency Approach
Contingency approach is pragmatic and open minded it discounts preconceived
notions, and universal validity of principles. Theory relives managers from dogmas and set
principles, it provides freedom/choice to manage to judge the external environment
and use the most suitable management techniques. Here, importance is given to the
judgment of the situation and not the use of specific principles. The contingency
approach has a wide-ranging applicability and practical utility in, organization
and management. It advocates comparative analysis of organizations to bring
suitable adjustment between organization structure and situational peculiarities.
The contingency approach focuses attention on situational factors that affect the
management strategy. The theory combines the mechanism and humanistic approaches to
fit particular/specific situation. It is superior to systems theory, as it not only examines the
relationships between sub-systems of an organization but also the relationship
between the organization and its external environment.
Limitation of Contingency Approach
It is argue that the contingency approach lacks a theoretical base: under contingency
approach, a manager is supposed to think through all possible alternatives, as he
has no drown principles to act upon. This brings the need of more qualities and
skills on the part of managers. The responsibility of a manager increase as he has
to analyze the situation, examine the validity of different principles and
techniques to the situation at hand, make right choice by matching the technique to the
situation, and finally execute his choice. The areas of operation .of a manager are quite

55
extensive under this theory.
Contingency approach/theory is the latest addition to existing management
theories. It was observed that different theories developed earlier are not applicable to
all real world situations developed since 1970. An open and adaptable systems
approach (also called contingency approach) is more convenient to deal with
complex management problems. Contingency/situational approach appears to be better
suited to lead management out of the present management theory jungle.
Contingency theories do not give special importance to any specific theory. It suggests that
there is no one best way to management. In the contingency approach, what is best for a
particular business unit or organization or under the available situation is given special
attention. Each situation (before the management) is different and calls for a
contingency/situational approach. A manager has to study the complexity
under each situation. He has to adjust his policies/decisions as per his awareness. He
has to decide what is best under the available total situation and act accordingly. He
(manager) has to identify the technique which will be most effective for achieving
organization objectives under particular situation/circumstances and act
accordingly. This is the practical aspect of contingency approach. What constitutes
best/effective management varies with the organizations internal and external
environment and the make-up of the organizational subsystems. The best
management pattern depends on a number of interrelated internal and external
variable factors around the specific organization/business unit.
The contingency approach falls somewhere in between the classical theory and systems
theory. It provides a synthesis that brings together the best of aft segments of what
Knoontz has termed "management theory jungle". Contingency approach is
practical progressive andaction oriented. It considers each organization as unique and
gives special attention to situation around it. Finally, it integrates theory with
practice in a systems framework. The other theories (classical or systems) are
56
 not rejected in the contingency approach. However, they are viewed as
incomplete vague and unsuitable to all organizations and situation.
FOURTEEN MANAGEMENT PRINCIPLES
The fourteen principles of management suggested by Henri Hayol (1916) are related to the
basic functions of management process and are universally accepted. Fayol has given
adequate details of every principle suggested by him. He also made them easily acceptable
by others. According to Henri Fayol, managers should be flexible in the
application of these principles. These principles are:
i.Division of Labour
ii.Authority and Responsibility
iii.Discipline
iv.Unity of Command/principle of one boss
v.Unity of Direction
vi.Subordination of Personal interest to organizational
interest/subordination of individual interest to general interest
vii.Fair remuneration.
viii.Centralization/de-centralization
ix.Scalar chain
x.Orders
xi.Equity
xii.Stability of tenure
xiii.Span of co-operation
xiv.Initiative
There are principles of management described by Henri faylor.

(l)Division of labour:

57
 I.Henry Fayol has stressed on the specialization of jobs.
II.He recommended that work of all kinds' musts be divided andsubdivided
and allotted to various persons accordingto their expertise in a particular area of
specialization
III.Subdivision of work makes it simpler and result in efficiency. It also helps the
individual in acquiring speed, accuracy in his performance.
IV.Specialization leads to efficiency and economy in shares of business.
(2) Authority and responsibility;
I.Authority and responsibility are co-existing -if authority is given to a person, he should
also be made responsible -in a same way, of anyone is made responsible for any job, he
should also have concerned authority.
II.Authority refers to the right of superior to get exactness from their sub-ordinates whereas
responsibility means obligation for the performance of the job assigned.
III.There should be a balance between the two i.e. they must go hand in hand.
IV.Authority without responsibility leads to irresponsible behavior whereas
responsibility without authority makes the person ineffective.
(3) Discipline:
According to Fayol, "discipline means sincerity, obedience, respect of authority and
observance of rules and regulations of the enterprise”. this principle applies that
subordinate should respect their superiors and obey their order.it is an important
requisite for smooth running of the enterprise. -discipline is not only required on path of
subordinates but also on the part of management.
I.Discipline can be enforced if: -there are good superiors at all levels.
II.There are clear and fair agreement with workers.
III.Sanctions (punishments) arejudiciously applied.
(4) Principle of one boss/unity of command:

58
 I.A sub-ordinate should receive orders and be accountable to one and only one boss at a
time. -in other words, sub-ordinates should not receive instructions from more
than one person becauseit undermines authority
II.weakens discipline
III.divides loyalty
IV.creates confusion
V.Delays and chaos
VI.Escaping responsibilities
VII.duplication of work
VIII.Overlapping of efforts
IX.Logical& appropriate wage rates and methods of their payment reducetension &
differences between workers & and management createsharmonious relationship
and pleasing atmosphere of work.
Fayol also recommended provision of other benefits such as freeeducation, medical &
residential facilities t workers.
(5) Unity of direction:
I.Fayol advocates one head one plan which means that there should beone plan for a group
of activities having similar objectives.
II.Related activities should be grouped together.
III.There should be one planof action for them and they should be under the charge of a
particularmanager.
IV.According to this principle, efforts of all the members of theorganization should be
directed towards common goal.
V.Without unity of direction, unity of action cannot be achieved.In fact, unity of command is
not possible without unity of direction.
Basis Unit of command Unit of direction

59
 Meaning It implies that a It means one head, one plan for group activities
subordinate should having similar objectives.
receive orders and
Nature It is related to the
instructions from only It is related to the functioning of department or
functioning
one boss of personnel organization as a whole

Necessity It is necessary for fixing It is necessary for sound organization

advantage responsibly of each It avoid duplication of efforts and wastage of
subordinate. resources
Result It
It leads
avoidstoconflicts,
better superior It leads to smooth running of the enterprise
subordinate
confusion and chaos
relationship
Therefore it is obvious that they are different from each other but they are dependent on
each other i.e. Unity of direction is a pre-requisite for unity of command. But it does not
automatically come from the unity of direction.
(6)Sub-ordination of individual interest to generalinterest/subordination of
personal interest to organizationalinterest:
I.An organization is much bigger than the individual it constitutes therefore interest of
the undertaking should prevail in all circumstances.
II.As far as possible, reconciliation should be achieved between individual and group
interests.
III.Therefore, dual sub-ordination should be avoided unless and until it is absolutely
essential.
IV.Unity of command provides the enterprise a disciplined, stable and orderly existence.
V.It creates harmonious relationship between superiors and subordinates.
(7) Fair Remuneration:

60
 I.The quantum and method of remuneration to be paid to the workers should be fair,
reasonable, satisfactory and rewarding of the efforts. -as far as possible it should
accord satisfaction to both employer and the employees.
Wages should be determined on the basis of cost of living, work assigned,
financial position of the business, wage rate prevailing etc. -but in case of conflict, Individual
must sacrifice for bigger interests.
II.In order to achieve this attitude, it is essential that
III.Employees should be honest and sincere.
IV.Proper and regular supervision of work
V.Reconciliation of mutual differences and clashes by mutualagreement. For
examples change of location of plant, for change ofprofit sharing ratio, etc.
(8) Centralization and de-centralization:
I.Centralization means concentration of authority at the top level. In other words,
centralization is a situation in which top management retains most of the
decision making authority.
II.Decentralization means disposal of decision making authority to allthe levels of the
organization. In other words, sharing authoritydownwards is
decentralization.-according to Fayol, "degree of centralization or
decentralizationdepends on no. Of factors like size of business, experience of
superior’sdependability and ability of subordinates etc.anything which increases the
role of subordinate is decentralizationand anything which decreases it is centralization.
III.Fayol suggested that absolute centralization or decentralization is notfeasible. An
organization should strike to achieve a lot between the two.
(9) Scalar chain:
I.Fayol defines scalar chain as "the chain of superiors ranging from the
ultimate authority to the lowest". Everyorders, Instructions,messages, requests;

61
 explanation etc. Has to pass through scalar chain.
II.But, for the sake of convenience & urgency, this path can be cut shirt and this
short cut is known as gang plant.
III.A gang plank is a temporary arrangement between two different points to
facilitate quick and easy communication as explained below:

Fig.2.2 gang plank

In the figure 2.2 given
Above, if has to communicate with g he will first send the communication upwards with the
help of c, b to a and then downwards with the help of e and f to g which will take
quite some time and by that time, it may not be worth therefore a gang plank has been
developed between the twoi.e. Gang plank clarifies that management principles are not
rigid rather they are very flexible. They can be moulded and modified as per
therequirements of situations
(10) Order:
I.This principle is concerned with proper and systematic arrangement ofthings and people.
II.Arrangement of things is called material order and placement of peopleis called social
order.
III.Material order - there should be safe, appropriate and specific placefor every article and
every place to be effectively used for specificactivity andcommodity.
IV.Social order-selection and appointment of most suitable person on thesuitable job.
There should be a specific place for everyone and everyoneshould have a specific
place so that they can easily be contactedwhenever need arises.

62
 (11) Equity:
Equity means combination of fairness, kindness and justice,
I.The employees should be treated with kindness and equity if devotionis expected of them.
It implies that managers should be fair and impartial while dealing withthe
subordinates.
II.They should give similar treatment to people of similar position.
III.They should not discriminate with respect to age, caste, sex, religion,relation etc.
IV.Equity is essential to create and maintain cordial relations between the mmanagers and sub-
ordinate.
V.But equity does not mean total absence of harshness.
VI.Fayol was of opinion that, "at times force and harshness might becomenecessary for the
sake of equity".
(12) Stability of Tenure:
I.Fayol emphasized that employees should not be moved frequently
From one job position to another i.e. the period of service in ajob shouldbe fixed.
II.Therefore employees should be appointed after keeping in viewprinciples of recruitment
& selection but once they are appointed theirservices be served.
III.According to Fayol. "Time is required for an employee to get used to anew work
&succeed to doing: it well but if he is removed before that hewill not be able to render
worthwhile services:
IV.As a result, the time, effort and money spent on training the workerwill go waste.
V.Stability or job creates team spirit and sense of belongingness amongworkers which
ultimately increase the quality as well as quantity ofwork.
(13) Span of co-operator or Espiritde'corps (can be achieved
through unity of command):
I.It refers to team spirit i.e. Harmony in the work groups and mutualunderstanding among

63
 the members.
II.Spirit de'corps inspires workers to work harder.
III.Fayol cautioned the managers against dividing the employees intocompeting
groups because it might damage the moral of the workersand interest of the undertaking
in the long run.
IV.To inculcate Espiritde’corps following steps should be undertaken
V.There should be proper co-ordination of work at all levels
VI.Subordinates should be encouraged to develop informal relationsamong themselves.
VII.Efforts should be made to create enthusiasm and keenness amongsubordinates so that
they can work to the maximum ability.
VIII.Efficient employees should be rewarded and those who are not up tothe mark should be
given a chance to improve their performance.
IX.Subordinates should be made conscious of that whatever they aredoing is or great
importance to the business and society.
X.He also cautioned against the more use of Britain communication tothe
subordinates i.e. Face to face communication should be no place
formisunderstanding. People then enjoy working in the organization andoffer their best
towards the organization.
(14)Initiative
I.Workers should be encouraged to take initiative in the work assigned to them.
II.It means eagerness to initiate actions without being asked to do so. -Fayol advised that
management should provide opportunity to its employees to suggest ideas,
experiences and new method of work. -it helps in developing an atmosphere of trust and
understanding. -people then enjoy working in the organization because it adds to
their zeal and energy.
III.To suggest improvement in formulation and implementation of place.
IV.They can be encouraged with the help of monetary and non-monetary incentives.
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 PRINCIPLES OF MANAGEMENT ARE UNIVERSAL
I.Management principles are applicable to all kinds of organizations-business and non-
business -they are applicable to all levels of management.
II.Every organization must make best possible use of the of management
principles.Therefore, they are universal or all pervasive.
PRINCIPLES OF MANAGEMENT ARE FLEXIBLE
I.Management principles are dynamic guidelines and not static rules.
II.There is sufficient room for managerial discretion i.e. they can bemodified as per the
requirements of the situation.
III.Modification and improvement is a continuous phenomenon in case ofprinciples of
management.
IV.Principles of management indicate cause and effect relationshipbetween related variables,
V.They indicate what will be the consequence or result of certain actions.
Therefore, if one is known, the other can be traced.
PRINCIPLES OF MANAGEMENT-AIMS AT INFLUENCING HUMAN
BEHAVIOR
I.Human behavior is complex and unpredictable.
II.Management principles are directed towards regulating humanbehavior so that
people can give their best to the organization.
III.Management is concerned with integrating efforts and harmonizingthem towards a goal.
But in certain situations even these principles fail to understand humanbehavior.
Principles of Management are of Equal Importance.
I.All management principles are equally important.
II.No particular principle has greater importance than the other.
III.They are all required together for the achievement of organization goals.
Following are the main importance of the principles of management

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 I.Improves understanding and direction for training of managers.
II.Role of management guide to research in management.
III.Improves understanding on how to manage organization. The principles enable managers to
decide what should be done to accomplish given tasks and to handle situations which
may arise in management. These principles make managers more efficient.
IV.Direction for training of manager: - principle of management provides
understanding of management process what managers would do to accomplish what.
Thus, these are helpful in identifying the areas of management in which existing
and future managers should be trained.
V.Role of management: - principle of management makes the role of manager's
concrete. Therefore, these principles act as ready reference to the managers to check
whether their decisions are appropriate. Besides these principles it defines
managerial activities in practical terms. They tell what a manager is expected to
do in specific situation.
VI.Guide to research in management: - the body of management principles indicates lines
along which research should be undertaken to make management practical and
more effective. The principles guide managers in decision making and action.
The researcher can examine whether the guidelines are useful ornot.

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 CHAPTER TWO
HUMAN RESOURCES MANAGEMENT
Human resource management emphasizes the sphere of influence to encompass 'the
strategic approach to manpower management in an organization'. The process calls for a
coherent objective to retain and increase employee head-count, any organization's most
valued asset. This specialized study and application has come in the wake of
realization that the employees of an organization, individually and collectively, are
the main contributors to the achievement of business objectives. The management of
people hired by an organization involves employing people, designing and
developing related resources and most importantly, utilizing and compensating
their services to optimize business profitability via employee performance.
Today, human resource management operates in tune with other essential
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organizational requirements and co-exists with the topmost management
cadre. Managing human resources within a company calls for a liaison between
the organization's management personnel and the administration of the executive
rungs. It thrives on the strength of the relationship between the management and
workers of the company.

Definition ofHRM:
Flippo(1980) define human resources management as the planning, organizing,
controlling of the procurement, compensation, integration, maintaining, and separating
of human resources to the end that individual, social, organizational objective are
accomplished.
The Functions of Human Resources Management
Human resource management involves the development of a perfect blend
between traditional administrative functions and the well-being of all employees within
an organization. Employee retention ratio is directly proportionate to the manner in
which the employees are treated, in return for their imparted skills and experience. A
human resource manager ideally empowers inter-departmental employee
relationships and nurtures scope for down-the-rung employee communication at various
levels. The field is a derivative of system theory and organizational
psychology. The human resource department hasearned a number of related
interpretations in time, but continues to defend the need to ensure employee well-
being. Every organization now has an exclusive human resource management
department to interact with representatives of all factors of production. The department is
responsible for the development and application of ongoing research on strategic
advances while hiring, terminating and training staff.
The Human Resource Management Department is Responsible for:

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1. Understanding and relating to employees as individuals, thus
identifying individual needs and career goals.
2. Developing positive interactions between workers, to ensure collatedand constructive
enterprise productivity and development of a uniformorganizational culture.
3. Identify areas that suffer lack of knowledge and insufficient training,and accordingly
provide remedial measures in the form of workshopsand seminars.
4. Generate a rostrum for all employees to express their goals andprovide the
necessary resources to accomplish professional and personalagendas, essentially in that
order.
5. Innovate new operating practice to minimize risk and generate anoverall sense of
belonging and accountability.
6. Recruiting the required workforce and making provisions forexpressed
and promised payroll and benefits.
7. Implementing resource strategies to subsequently create and sustaincompetitive
advantage.
8. Empowerment of the organization, to successfully meet strategicgoals by managing
staff effectively.
9. The human resource department also maintains an open demeanor to
employee grievances. Employees are free to approach the human
resource team for any conceived query or any form of on-the-job stress
that is bothering them.
10. Performance of employees is also actively evaluated on a regular
basis, the checks are conducted by the hr to verify and thereby
confirm the validity of the employee's actual performance matching the
expected performance.
11. Promotions, transfers or expulsion of services provided by the employee are some duties

69
that are enforced by the human resource department. Promotions are conducted and
are predominantly based on the overall performance of the individual,
accompanied by the span or tenure he has served the organization. The human
resource department also looks at the possibilities of the employee migrating from
one job to another, maintaining the hierarchy in the company and considering the
stability of post and the salary obtained over a period. Ideally, a human resource
management department is responsible for an interdisciplinary examination of all
staff members in the workplace. This strategy calls for applications from
diverse fields such as psychology, paralegal studies, industrial engineering, sociology,
and a critical understanding of theories pertaining to post-modernism and industrial
structuralism. The department bears the onus of converting the available task force or hired
individuals into strategic business partners. This is achieved via dedicated change
management and focused employee administration. The hr functions with the sole
goal of motivating and encouraging the employees to prove their mettle and add
value to the company. This is achieved via various management processes like workforce
planning and recruitment, induction and orientation of hired task-force and employee
training, administration and appraisals

Importance ofHRM in an Organization

Why human resources is important in an organization
Every organization needs a human resources manager for successful functioning. However,
why is human resources manager important in an organization?
Many forces drive an organization together and make it reach its goal and
objectives. A successful organization should have a perfect balance of capital, materials, and
work force. I remember reading the quote that makes absolute sense when it conies to
business organizations. It said, "15 % success is due to technical skills and 85 %

70
due to the skills in human engineering." I mean all of us would agree to the fact that if
you have all the capital and the infrastructure that you need, but you don't have good
manpower to utilize those resources effectively, and then there is no way that the
organization would be a successful one! On the other hand, well trained and a well-
equipped manpower will always prove to be beneficial when it comes to utilizing the
available resources to the best of their capabilities, eventually contributing to the success
of the organization... And the person responsible for meeting the
organization's need for well qualified employees is the HR manager. An HR manager is
responsible for many important functions in an organization. This includes recruiting
or training employees meeting the organization's criteria, taking care of their payroll
and salaries, and handling other important issues related to humanresource
management.
Human Resources Planning
Human resources planning help management find the right people for the right job at the right
time. (Robert, k.1995). Human resource planning is the development of a
comprehensive staffing strategy for meeting the organization's future human resources
need; first, current staffing needs are assessed. Next, future needs of human resources are
forecast. Third, a comprehensive state

71
 forecast future
Human
Resources needs

assess current forecast and

stafing needs staffing strategy

Evaluate and
update

Human Resource Planning Model System F.G 3.1

Strategy is formulated. Finally, evaluation and updating of the system are achieved by continually
recycling through the process.
Importance of Human Resource Planning in an Organization
In order to survive in a business environment wherein competitors are just waiting to knock
you off the league, you must be very sure about every step you take for the organization's
success... That includes the people that you hire to work in your organization! There is a
certain hierarchy that an organization follows in order to have a proper and synchronized
set of accountability and responsibilities. Therefore, human resource planning is
of vital importance in an organization so that the right amount of candidates can be
hired in the right numbers with the right qualification, experience, and potential. The
logic is simple; the HR should be well equipped to be able to judge and identify the
potential candidates and use their potential profitably for the organization through
training and exposure. The employees should be hired based on the requirements that can
be identified only when the work force hierarchy is properly planned

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Recruitment
Recruitment is a process of searching and obtaining potential job candidates
in sufficient number and quality so that they can select the most appropriate people to fit its
job needs (Schuller, 1972).Is the process of seeking out and attempting to attract individual
external labour market who are capable of and interested in filling
Availablevacancies (Dyer, et al, 1983)it refers to the process of attracting, screening,
and selecting a qualified person for a job.
Therecruitment industry exists in four forms:
1. Employment agencies deal with clerical, trades, temporary and temporary to hire
employment opportunities.
2. Recruitment websites andjob search engines used to gather as many candidates as
possible by advertising a position over a wide geographic area. Although thought to be
a cost effective alternative, a human resource department or department manager will
spend time outside their normal duties reading and screening resumes. A professional
recruiter has the ability to read and screen resumes, talk to potential candidates
and deliver a selective group in a timely manner.
3. "Headhunters" for executive and professional positions. These firms are either
contingency or retained. Although advertising is used to keep a flow of candidates these
firms rely on networking as their main source ofcandidates.
4. Niche agencies specialize in a particular industrial area of staffing. Some
organizations prefer to utilize employer branding strategy and in-house
recruitment instead of recruiting firms. The difference, a recruiting firm is always
looking for talent whereas an internal department is focused on filling a single
opening. The advantage associated with utilizing a third-party recruiting firm is
their ability to know where to find a qualified candidate. Talent management is a key
component to the services a professional recruiting firm can provide.

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Recruitment Process for Employment
1. Job Analysis
The proper start to a recruitment effort is to perform a job analysis, to document the actual
or intended requirement of the job to be performed. This information is captured
in a job description and provides the recruitment effort with the boundaries and
objectives of the search. Oftentimes a company will have job descriptions that
represent a historical collection of tasks performed in the past. These job
descriptions need to be reviewed or updated prior to a recruitment effort to reflect
present day requirements. Starting recruitment with an accurate job analysis and job
description ensures the recruitment process effort starts on a proper track for success.
2. Sourcing
Sourcing involves advertising: a common part of the recruiting process, often
encompassing multiple media, such as the internet, general newspapers, job ad
newspapers, professional publications, window advertisements, job centers, and
campus graduate recruitment programs; and a recruitment research, which is the
proactive identification of passive candidates who are happy in their current positions
and are not actively looking to move companies. This initial research for so-called
passive candidates, also called name generation, results in contact
information of potential candidates who can then be contacted discreetly to be
screened and approached on behalf of an executive search firm or corporate client.
3. Screening and Selection
Suitability for a job is typically assessed by looking for skills, e.g.
Communication, typing, and computer skills. Qualifications may be shown through
resumes, job applications, interviews, educational or professional experience, the
testimony of references, or in-house testing, such as for software knowledge, typing
skills, numeracy, and literacy, through psychological tests or employment testing.

74
Other resume screening criteria may include length of service, job titles and
length of time at a job. In some countries, employers are legally mandated to
provide equal opportunity in hiring. Business management software is used by
many recruitment agencies to automate the testing process. Many recruiters and
agencies are using an applicant tracking system to perform many of the filtering
tasks, along with software tools for psychometric testing.
4. Lateral Hiring
"Lateral hiring" refers to a form of recruiting; the term is used with two
different, almost opposite meanings. In one meaning, the hiring
organization targets employees of another, similar organization,
possibly luring them with a better salary and the promise of better career
opportunities. An example is the recruiting of a partner of a bank firm by
another bank firm. The new lateral hire then has specific applicable
expertise and can make a running start in the new job. In some
professional branches such lateral hiring was traditionally frowned
upon, but the practice has become increasingly more common. An
employee's contract may have non-compete clause preventing such lateral
hiring.
In another meaning, a lateral hire is a newly hired employee who has no prior specific
applicable expertise for the new job, and for whom this job move is a radical
change of career. An example is the recruiting of a university professor to become
chairperson of the board of a company.
5. On boarding
"On boarding" is a term that describes the process of helping new employees become
productive members of an organization. A well-planned introduction helps new
employees become operational quickly and is often integrated with a new

75
company and environment. On boarding is included in the recruitment process
for retention purposes. Many companies have on boarding campaigns in hopes to retain
top talent that is, new to the company; campaigns may last anywhere from 1 week
to 6 months.
6. Internet Recruitment and Website
Such sites have two main features: job boards and a resume/curriculum vitae (CV) database.
Job boards allow member companies to post job vacancies. Alternatively, candidates can
upload a resume to be included in searches by member companies. Fees are
charged for job postings and access to search resumes. Since the late 1990s, the
recruitment website has evolved to encompass end-to-end recruitment. Websites capture
candidate details and then pool them in client accessed candidate management
interfaces (online). Key players in this sector provide e-recruitment software and services to
organizations of all sizes and within numerous industry sectors, who want to e-
enable entirely or partly their recruitment process in order to improve business
performance. Theonline software provided by those who specialize in online
recruitment helps organizations attract, test, recruit, employ, and retain quality
staff with a minimal amount of administration. Online recruitment websites can
be very helpful to find candidates that are very actively looking for work and post their
resumes online, but they will not attract the "passive" candidates who might respond
favorably to an opportunity that is presented to them through other means. In
addition, some candidates who are actively looking to change jobs are hesitant to
put their resumes on the job boards, for fear that their companies, co-workers, customers or
others might see their resumes.
8. Job search engines
The emergence of meta-search engines allows job seekers to search across
multiple websites. Some of these new search engines index and list the

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advertisements of traditional job boards. These sites tend to aim for providing a
"one-stop shop" for job seekers. However, there are many other job search engines.
Those indexes are solely from employers' websites, choosing to bypass
traditional job boards entirely. These vertical search engines allow job seekers to find
new positions that may not be advertised on traditional job boards, and online recruitment
websites
Recruitment Process Steps
Recruitment is the process of selecting the most suitable candidate for a specific job
requirement. This is a systematic process involving both, the employer and the
employee, in a way that both of them are mutually benefited. This will help you to
understand the selection and
In today's competitive world, every company needs good employees for an accelerated
growth rate. The recruitment and selection strategies of a particular organization are
believed to have an impact on this growth and success rate of the organization.
Thus, it is very important for an employer to design his recruitment process steps
very well. Employers are always concerned about how to find and hire the right
employees. Employers recruit for the present and future needs of the company. Internal
recruitment applies to the people working in the present organization. They are given
a chance to apply for a given vacant position first. This may include a change in
profile on the part of the employee. It is more economical and less time-
consuming for the company. In contrast, external recruitment has to do with
external candidates applying for an available position. Naturally, the resources
spent for the overall selection process are more.
The human resources department (HRM) teamplays a significant role in this process.
Whenever a vacancy arises in an organization, it is the responsibility of this department
to place the information in the publicdomain through the various media, such as

77
newspapers and various job sites. However, it is of utmost importance that the
advertisement designed clearly defines the designation, job profile and the concomitant
skill set required.
1. Filtration and selection of relevant resumes
After receiving an adequate number of responses from job seekers, the
sieving process of the resumes begins. This is a very essential step of the
selection process, because selecting the correct resumes that match the
job profile, is very important. Naturally, it has to be done rather
competently by a person who understands all the responsibilities
associated with the designation in its entirety. Candidates with the given
skill set are, then chosen and further called for interview. In addition,
the applications of candidates that do not match the present nature of the
position but may be considered for future requirements are filed
separatelyandpreserved.
2. Preliminary selection techniques
Online employment screening is a technique employed by certain employers.
This technique saves a lot of time and money for the employer. It is an efficient method
to assess the skills and knowledge of the candidate with regards to the required
skill set. Some organizations conduct the first round of selection process as
interviews based on communicationandinterpersonalskills.
Psychometrics is a technique that tries to gauge a person's attitude, intelligence, and
personality. Psychometric testing is used by most organizations. This test helps an
employer to arrive at an approximate suitability quotient of the candidate, for
a particular job profile.
Assessment center technique is another method that includes many exercises on
problem solving, presentation, aptitudes test and many more. In this process, employers

78
usually check the different skills of a person. The various skills include
analytical skills, team-building skills, leadership skills, personal attributes,
and presentation skills.
After a candidate has cleared these tests, there is usually a formal round of interview with
the HRM, where the discussion that includes salary expectations and
subsequent negotiations takes place.
3. Interview
Job interviews play an important role in the entire process. It is very important to put the
candidate at ease, to eliminate initial nervousness and to break the ice. It is better to
start with general questions to the candidate, so that he feels relaxed. Queries should
be job-related, objective, and understandable to the candidate. Some of the usual
employer interview questions are as follows: tell me something about yourself
What is your work experience and how it is related to this j ob? What made you to apply
for this job?
All ambiguities should be done away with, when describing the responsibilities of the slot
available. The recruitment process of an organization ends by finalizing the candidate
followed by other joining procedures and formalities. If a methodical and systematic
approach followed for recruiting, it does reflect a cogent and effective growth in
your business.
Training and Development
Job-training programs help prepare, introduce, and reintroduce individuals into
the workforce. They help workers develop new skills to become more competitive in
the job market. These programs aredesigned to provide workers with the skills
and abilities necessary to move forward in the workplace and perform their jobs
with pride and confidence (Markus Taylor (1996).

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Types of job-training programmes
By Markus Taylor (1996)

1. On-the-job training and lectures:

The two most frequently used kinds of training are on-the-job training
and lectures, although little research exists as to the effectiveness of
either. It is usually impossible to teach someone everything she needs to
know at a location away from the workplace. Thus, on-the-job training
often supplements other kinds of training, e.g., classroom or off-site
training; but on-the-job training is frequently the only form of training. It
is usually informal, which means, unfortunately, that the trainer does not
concentrate on the training as much as she should, and the trainer may
net have a well-articulated picture of what the novice (beginner) needs
to learn.On-the-
Job training is not successful when used to avoid developing a training program,though it
can be an effective part of well-coordinated training programmes lectures are used
because of their low cost and their capacity to reach many people. Lectures, which use
one-way communication as opposed to interactive learning techniques, are
much criticized as a training device.
2. Programmed instruction (PI):
1. These devices systematically present information to the learner and elicit a response;
they use reinforcement principles to promote appropriate responses. When pi
was originally developed in the 1950s, it was thought to be useful only for basic
subjects. Today the method is used for skills as diverse as air traffic control,

80
blueprint reading, and the analysis of tax returns.

3. Computer-assisted instruction (CAI):

With CAI students can learn at their own pace, as with pi, because the student interacts with
the computer, it is believed by many to be a more dynamic learning device.
Educational alternatives can be quickly selected to suit the student's
capabilities, and performance can be monitored continuously. As instruction
proceeds, data are gathered for monitoring and improving performance.
4. Audiovisual techniques:
Both television and film extend the range of skills that can be taught and the way
information may be presented. Many systems have electronic blackboards and
slide projection equipment. The use of techniques that combine audiovisual systems
such as closed circuit television and telephones has spawned a new term for this type
of training. The feature on "Sesame Street” illustrates the design and evaluation of one of
television's favorite children's program as a training device.
5. Simulations:
Training simulations replicate the essential characteristics of the real world that are
necessary to produce both learning and the transfer of new knowledge and skills to
application settings. Both machine and other forms of simulators exist. Machine simulators
often have substantial degrees of physical fidelity; that is, they represent the real world's
operational equipment. The main purpose of simulation, however, is to produce
psychological fidelity, that is, to reproduce in the training those processes that
will be required on the job. We simulate for a number of reasons, including
controlling the training environment, for safety, to introduce feedback and other
learning principles, and to reduce cost.
6. Business Games:

81
They are the direct progeny of war games that have been used to train officers in combat
techniques for hundreds of years. Almost all early business games were designed to
teach basic business skills, but games that are more recent also include interpersonal
skills. Monopoly might be considered the quintessentialbusiness game for young
capitalists. It is probably the first place youngsters learned the words mortgage,
taxes, and goes to jail
The Importance of Training and Development
1. Optimum utilization of human resources: Training and 'development
helps in optimizing the utilization of human resource that further helps the employee to
achieve the organizational goals as well as their individual goals
2. Development of human resources:Training and developmenthelps to provide an
opportunity and broad structure for the development of human resources'
technical and behavioral skills in an organization.It also helps the employees in
attaining personal growth.
3. Development of skills of employees:Training and developmenthelps in
increasing the job knowledge and skills of employees at eachlevel. It helps to expand,
the horizons of human intellect and an overallpersonality of the employees.
4. Productivity: Training and development helps in increasing theproductivity of the
employees that helps the organization further toachieveitslong-termgoal.
5. Team spirit:Training and development helps in inculcating thesense of
teamwork, team spirit, and inter-team collaborations. It helpsin inculcating the
zeal to learn within the employees.
6. Organization culture:Training and development helps to developand improve the
organizational health culture and effectiveness. It helps in creating the learning culture
within the organization.
7. Organization climate:Training and development helps building thepositive

82
perception and feeling about the organization. The employees
get these feelings from leaders, subordinates, and peers.
Quality - training and development helps in improving upon thequalityof workandwork-
life.
8. Healthy work-environment: - Training and development helps increating the
healthy working environment. It helps to build goodemployee, relationship so
that individual goals aligns withorganizationalgoal.
9. Health and safety:Training and development helps in improvingthe health and safety of
the organization thus preventing obsolescence.
10. Morale: Training and development helps in improving the morale of theworkforce.
11. Image:Training and development helps in creating a bettercorporateimage.
12. Profitability: Training and development leads to improvedprofitability
and more positive attitudes towards profit orientation.
13. Training and development aids in organizational development i.e.
Organization gets more effective decision making and problem solving.
It helps in understanding and carrying out organizational policies
Training and development helps in developing leadership skills,
motivation, loyalty, better attitudes, and other aspects that successful
workers and managers usually display.
Training and development demonstrates a commitment to keepingemployees on the
cutting edge of knowledge and practice.
Employee Disciplinary Action:
When and how to take it
These guidelines are designed to assist supervisors who experience behavior and
performance problems with a staff employee, whether union or nonunion. These guidelines
are inapplicable to layoffs or reductions in force.

83
An overview
Because employee discipline is a difficult experience that managers and supervisors
sometimes face, these guidelines are intended to review the most effective
approachto managing performance and/or behavioral issues. Behavioral issues
generally result in disruption to the work environment, for example,
workplace misconduct and/or rules violations; performance issues result in a failure
to meet goals and/or properly perform tasks, such as when an individual lacks
the knowledge, skills, or ability to perform the job, or where the work is
consistently unacceptable in terms of quality or productivity. Discipline should not
generally come as a surprise to the employee. Occasionally employees are
unaware of their supervisors' dissatisfaction until they suddenly receive a
formal written reprimand or a letter of termination. Try to avoid this situation if
possible and attempt to regularly communicate issues to employees rather than
wait until the performance problems can no longer be tolerated or until annual
performance reviews are conducted.
When it becomes necessary to discipline an employee, two principles apply:
1. First, the employee must be clearly informed by the supervisor as to the source of
dissatisfaction;
2. Second, except in limited circumstances, the employee should be given the
opportunity to correct the problem.
In most cases, the purpose of discipline is to instruct and correct rather than to punish. It is
your responsibility as a supervisor to explain to the employee those areas in which he or
she is expected to improve, to make suggestions about how to improve, and to allow
time for the employee to make improvements. It is usually only in instances such as theft,
physical violence or other serious misconduct that immediate termination
may be the proper action. If you believe that you are confronted by such a case,

84
please seek assistance from the office of labour. Relations

Progressive Discipline
In most instances of behavioral problems, is encouraged to take a progressive approach
to discipline as follows:
1. When you become aware of a problem, promptly speak to the employee, taking
particular care to specify the deficiencies you wish to see corrected and how
corrective action is to be undertaken. Have as many additional discussions with the
employee as seems appropriate under the particular circumstances. Usually, at this early
stage, the employee should be given advice and guidance rather than a
reprimand. It is important to maintain, at a minimum, a log of all discussions of this nature
with employees. If the employee seems uncertain of the advice being given, then a
confirmation of the discussion(s) in writing is advisable.
2. If, after a reasonable period of time, there is no improvement, or insufficient
improvement, write formally to the employee explaining the reasons for your
dissatisfaction with his or her conduct. Often it is helpful if such a letter makes
reference to your earlier discussions with the employee. Ultimately, it may be
necessary to write to the employee to indicate that he or she will be suspended
without pay or terminated if there is insufficient improvement in the conduct.
3. If there continues to be insufficient improvement, a suspension
without pay for a short period is appropriate. You should specifically
state, in a suspension letter, that the employee will be subject to further
suspensions without pay or termination if there continues to be
insufficient improvement. Please note that because of fair labor
standards act regulations, a suspension for an employee generally

85
must be for a full workweek; if you believe the offense does not warrant
a full week of suspension without pay, please contact the office oflabour
relations to discuss possible alternatives.
When it is apparent that a progressive disciplinary approach has
failed and that the necessary change in behavior has not been achieved,
you may decide to terminate the employee. Before terminating,
however, you must give the employee written notification that you are
scheduling him or her to attend a pre-termination conference, and
attach a draft copy of a letter specifying the reasons for termination.
During the pre-termination conference, give the employee an
opportunity to respond to the reasons for termination, and consider
what he or she says. After the meeting, you may investigate further if
you so choose. Nonetheless, at the conclusion of the process, decide
whether you will terminate or impose some lesser discipline. If you
decide to terminate, simply finalize the initial draft letter and issue it to
the employee the sequence outlined in 1, 2, and 3 above will not be appropriate in every
circumstance. The appropriate number of discussions, letters, formal reprimands,
and/or suspensions before termination, the repetition or exclusion of one or
another of the steps, and the length of time between the steps taken may depend on
many factors such as the length of service of the employee; the level, nature and
responsibilities of the particular position concerned; the previous disciplinary
record of the employee; the nature and seriousness of the problem; and any improvement
made by the employee throughout this process. Such a progressive disciplinary
approach may not be necessary with performance-based problems (i.e., if an
employee's deficiencies in performing the functions of the position or meeting goals are
such that they cannot be corrected by coaching, training or disciplinary action, such as when
an employee lacks a particular skill, aptitude or ability). In these instances, acknowledge
86
the employee's lack of ability as soon as possible and provide consistent and regular
performance assistance, evaluation, coaching and/or training. Then, after a
reasonable period of time, if you conclude that the employee's performance still
has not reached and will not reach a satisfactory level, termination may be appropriate.
Please note that this application of the disciplinary process is distinct from the pay-for-
performance evaluation process. In all instances where you believe that discipline may
be appropriate for a performance-based issue, please contact the office of labor
relations for further consultation.
Additionalconsideration
It can be very difficult to advise an employee that you have concerns with his/her
behavior or performance, but honesty, frankness, and precision about the sources
of your dissatisfaction and about your future expectations for the employee are very
important to the employee's understanding of the problem and his/her ability to
improve. Vagueness and generalities or glossing over the situation are likely to leave the
employee uneasy and feeling that something is wrong; however, without information and
direction, the employee is unlikely to be able to improve. Keep your criticisms free
of nonworking related matters and be as unemotional as possible, even though the
situation is often stressful to you as a supervisor as well as to the employee. There
are also some procedural items to keep in mind. First, ask the employee to sign
the disciplinary letter in order to acknowledge that he or she has read it; if the
employee refuses to sign, that should be noted on the letter. Second, provide one copy
of the disciplinary letter to the employee and one copy to organizational human resources
for placement into the official personnel file. Third, if the employee is covered by a
collective negotiations agreement, you should refer to the applicable collective
negotiations agreement to ascertain the requirements for notification of the union.
Both union and nonunion staff employees may grieve discipline or termination in
accordance with the procedures applicable to workers' compensation.
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Worker is Compensation.
Workers' compensation is a mandatory type of business insurance that
provides employees who become injured or ill while on the job with
medical coverage and income replacement. It also protects companies
from being sued by employees for the workplace conditions that caused
suchaninjuryorillness.
Businesses are required by law in all fifty states to pay for the medical treatment and lost
wages of employees who suffer job-related injuries or illnesses. In order to avoid
crippling expenses in this regard, companies purchase workers' compensation
insurance policies of one kind or another. Most states give businesses the choice of
buying workers compensation policies either directly from the state or from a private
insurer. Each state determines its own system's payment schedules, employee eligibility
requirements, and rehabilitation procedures. Although provisions of each state's laws
differ greatly, the underlying principle is the same hat employers should assume the
costs of injuries, illnesses, and deaths that occur on the job, without regard to fault, and
partially replace wage income lost. While income replacement under workers'
compensation is usually a percentage of the actual wage, it is counted as a
transfer payment and thus is not subject to federal income tax. Some state laws
exempt certain categories of employees fromCoverage. Those most likely to be
excluded are domestics, agricultural workers, and manual laborers.
Given the mandatory nature of workers' compensation coverage and the potential
expense involved, the cost of workers' compensation insurance policies is a huge
concern for small business owners. In fact, workers' compensation premiums stand
as most companies' second largest operating expense, after payroll. These rates
are based on the employer's total payroll, the classification of the employees (the relative
riskiness of their work activities), and the employer's accident record. Small

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business owners have less control over the cost of workers' compensation coverage
than they do over health insurance costs. State legislatures set the level of benefits
and employers pay the full cost, so medical cost-containment strategies like co-
payments do not apply. Some insurers avoid handling workers' compensation policies for
small businesses because they feel that smaller companies lack the funds to provide
a safe working environment. In general, the rates depend upon the type of business,
number of employees, and company safety record. Penalties for failing to carry workers
comp insurance policies can be severe. In general, business owners who are
neglectful in this manner can be held liable for the medical expenses incurred by
the worker in their employ. Nonetheless, many businesses engage in what is known
as "premium fraud," in which they either do not carry policies or lower the costs of their
policy premiums through fraudulent recordkeeping (underreporting their
employee count or the wages they pay them, paying workers under the table in
order to falsify the number of employees they have, misclassifying the kind of
work engaged in by employees in order to reduce premiums, etc.). However,
momentum is building to beef up penalties for these kinds of fraudulent actions,
which injure insurers and honest employers alike. "Honest employers pick up
additional costs [of fraud committed by other companies] in the form of higher
premiums," Noted Rebekah young in "but even if honest employers are able to
pass along the costs of their higher premiums, that doesn't mean they aren't adversely
affected by premium fraud. For example, honest construction companies lose out on
projects to premium fraud-committing companies because they are underbid by
these crooked companies, which have lower overhead costs thanks to their lower
premium costs."
Types of Coverage Available
There are three basic methods available for employers to obtain the required workers'
compensation protection: state insurance funds, private; insurance, and self-
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insurance through insurance pools. The latter option which involves setting aside
funds in anticipation of workers compensation claims, rather than purchasing
insurances seen as a cost-saving method for safety-oriented firms. In the states that permit
it, many large employers now self-insure, and many small businesses form
groups to insure themselves and decrease the risks.
1. Employee benefits for small business,
Insurance plans as a good option for small businesses with better-than-average
workplace safety records. Such plans work best when the companies involved are in the
same or similar industries, so that their level of risk is roughly equivalent. The
companies can then join together to purchase stop-loss coverage to protect
themselves against claims over a certain amount. Though self-insurance can be
less expensive than private workers' compensation policies, small businesses
should make sure that they have the financial resources to withstand potential
losses. Small businesses can explore a variety of other measures to reduce their
workers' compensation premiums as well. These include:
2. Select the right insurer.
Business owners seeking workers' comp insurance policies should seek out insurers
with proactive claims adjusting policies. In addition, occupational hazards contributor
Shawn Adams counsels companies to give preference to insurers who assign
specific adjusters for accounts. "[When] claims arc handled on a file basis your
account is handled by whatever adjuster happens to be assigned the file for your
claim. An assigned adjuster is one who can take responsibility for your account,
as opposed to having different adjusters handle different claims against your policy
but not coordinating the claims in a comprehensive manner."
3. Pay attention to your own claims trends.
Businesses should take steps to monitor all aspects of their work safety record and insurance

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coverage, and ensure that all subcontractors carry workers' comp coverage.
Adopt policies and programs to reduce exposure to workers' comp claims. Companies
can reduce premiums by minimizing the number of claims made by their workforce.
This requires the implementation of safety programs in such areas as materials
handling and ergonomics. "Few companies know how to prevent workers'
compensation claims, or how affordable and effective ergonomic training can be
in preventing such claims," wrote Mary Murray in occupational hazards. "Businesses
don't know that ergonomic training and redesign can almost entirely be paid for with
'found' money that otherwise would be wasted in over feeding their workers
compensation policy.

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CHAPTER THREE
ORGANIZATION
Definition
Chester, Barnard. (1938); Defined organization as "a system of consciously
coordinated activities or forces of two or more persons." in other words, when people gather
and formally agree to combine their efforts for a common purpose, an organization is
the result. So there for one can rightly say an organization is any social unit of
people systematically structured and managed to meet a need or to pursue
collective goals on a continuing basis. All organizations have a management
structure that determines relationships between functions and positions, and subdivides and
delegates roles, responsibilities, and authority to carry out defined tasks. Organizations are
open systems in that, they affect and are affected by the environment beyond their
boundaries. Organizational structure

1. Formal Structure
Formal structure is primarily concerned with the relationship between authority and
subordinate. A typical organization chart illustrates the formal structure at work in a
company or part of a company. The hierarchical organization begins at the top with
the most senior leader .and then cascades down to the subordinate managers and
then subordinate employees below those managers. There are job titles, financial
obligations, and clear lines of authority for each box on the organization chart.

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2. Informal Structure
Informal structures typically develop around social or project groups. Because informal
structures are based on camaraderie, there is often aimmediate response from
individuals. This saves people time and effort, thus making it easier to work with
in informal structures. People also rely on informal structure if the formal structure
has stopped being effective, which often happens as the company grows or
changes but does not reevaluate its hierarchy or work groups.
Different Types of Organizational Structure
Organizational structures developed from the ancient times of hunters and collectors in tribal
organizations through highly royal and clerical power structures to industrial
structures and today's post-industrial
Structures
As pointed out by Mohr, (1982, pp. 102-103), the early theorists of organizational
structure, Taylor, Fayol, and Weber "saw the importance of structure for
effectiveness and efficiency and assumed without the slightest question that whatever
structure was needed, people could fashion accordingly. Organizational structure was
considered a matter of choice... When in the 1930s, the rebellion began that came to be
known as human relations theory, there was still not a denial of the idea of
structure as an artifact, but rather an advocacy of the creation of a different sort of
structure, one in which the needs, knowledge, and opinions of employees might be
given greater recognition." however, a different view arose in the 1960s,
suggesting that the organizational structure is "an externally caused phenomenon,
an outcome, rather than an artifact." in the 21st century, organizational theorists
such as Lim, Griffiths, and Sambrook (2010) are once again proposing that
organizational structure development is very much dependent on the expression of
the strategies and behavior of the management and the workers as constrained by

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the power distribution between them, and influenced by their environment and the
outcome.
1. Post-bureaucratic
The term of post bureaucratic is used in two senses in the organizational literature:
onegeneric and one much more specific. In the generic sense, the term post
bureaucratic is often used to describe a range of ideas developed since the 1980s that
specifically contrast themselves with Weber’s ideal type bureaucracy. This may
include total quality management, culture management and matrix management,
amongst others. None of these however has left behind the core tenets of
bureaucracy. Hierarchies still exist, authority is still Weber’s rational, legal type,
and the organization is still rule bound. Heckscher, (1994) arguing along these lines,
describes them as cleaned up bureaucracies, rather than a fundamental shift away
from bureaucracy. Gideon kunda, in his classic study of culture management at
tech1 argued that 'the essence of bureaucratic control - the formalization,
codification, and enforcement of rules and regulations - does not change in
principle, it shifts focus from organizational structure to the organization's
culture'. Another smaller group of theorists has developed the theory of the post-
bureaucratic organization.Provide a detailed discussion, which attempts to
describe an organization that is fundamentally not bureaucratic. Charles,
Heckscher has developed an ideal type, the post-bureaucratic organization, in which
decisions are based on dialogue and consensus rather than authority and command,
the organization is a network rather than a hierarchy, open at the boundaries (in
direct contrast to culture management); there is an emphasis on meta-decision
making rules rather than decision making rules. This sort of horizontal decision-making by
consensus model is often used in housing cooperatives, other cooperatives and when
running a non-profit or community organization. It is used in order to encourage
participation and help to empower people who normally experience oppression in
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groups. Still other theorists are developing a resurgence of interest in complexity theory
and organizations, and have focused on how simple structures can be used to engender
organizational adaptations. For instance, miner et al (2000) studied how simple
structures could be used to generate improvisational outcomes in product
development. Their study makes links to simple structures and improviser learning. Other
scholars such as Jan Rivkin and Sigglekow and Nelson Repenning revive an
older interest in how structure and strategy relate in dynamic environments.
2. Functional structure
Functional structure is set up so that each portion of the organization is grouped
according to its purpose. In this type of organization, for • example, there
may be a marketing department, a sales department, and a production department.
The functional structure works very well for small businesses in which each
department can rely on the talent and knowledge of its workers and support itself.
However, one of the drawbacks to a functional structure is that the
coordination and communication between departments can be restricted by
the organizational boundaries of having the various departments working
separately
Employees within the functional divisions of an organization tend to perform a
specialized set of tasks, for instance the engineering department would be
staffed only with software engineers. This leads to operational efficiencies within
that group. However, it could also lead to a lack of communication between the
functional groups within an organization, making the organization slow and
inflexible. As a whole, a functional organization is best suited as a producer of
standardized goods and services at large volume and low cost. Coordination and
specialization of tasks are centralized in a functional structure, which makes producing
a limited amount of products or services efficient and predictable. Moreover,

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efficiencies can further be realized as functional organizations integrate their
activities vertically so that products are sold and distributed quickly and at low cost. For
instance, a small business could make components used in production of its
products instead of buying them. This benefits the organization and employees
faiths.
3. Divisional structure
Divisional structure typically is used in larger companies that operate in a wide
geographic area or that have separate smaller organizations within the umbrella
group to cover different types of products or market areas. For example,
PeugeotNigeria ltd was organized divisionally— with a small engine division, a
compressor division, a parts division and divisions for each geographic area to handle
specific needs. The benefit of this structure is;
Needs can be met more rapidly, and more specifically; however, communication is
inhibited because employees in different divisions are not working together.
Divisional structure is costly because of its size and scope. Small businesses
can use a divisional structure on a smaller scale, having different offices in
different parts of the city, for example, or assigning different sales teams to handle
different geographic areas
Also called a "product structure", the divisional structure groups each organizational
function into a division. Each division within a divisional structure contains all the
necessary resources and functions within it. Divisions can be categorized from
different points of view. One might make distinctions on a geographical basis or
on product/service basis (different products for different customers: households
or companies). In another example, an automobile company with a divisional
structure might have one division for SUVs, another division for subcompact cars, and
another division for sedans.

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Each division may have its own sales, engineering and marketing departments.
4. Matrix structure
The matrix structure groups employees by both function and product. This structure can
combine the best of both separate structures. A matrix organization frequently uses
teams of employees to accomplish work, in order to take advantage of the strengths, as
well as make up for the weaknesses, of functional and decentralized forms. An
example would be a company that produces two products, "product a" and
"product b". Using the matrix structure, this company would organize functions within
the company as follows: "product a" sales department, "product
A" customer service department, "product an" accounting, "product b" sales department,
"product b" customer service department, "product b" accounting department. Matrix
structure is amongst the purest of organizational structures, a simple lattice emulating
order and regularity demonstrated in nature.
A. Weak/functional matrix: a project manager with only limited
authority is assigned to oversee the cross- functional aspects of the
project. The functional managers maintain control over their resources
and project areas.
B. Balanced/functional matrix: a project manager is assigned to
oversee the project. Power is shared equally between the project
manager and the functional managers. It brings the best aspects of
functional and projectile organizations. However, this is the most
difficult system to maintain, as the sharing power is delicate
proposition.
C. Strong/project matrix: a project manager is primarily responsible
forthe project FunctionalManagers provide technical expertise and assign resources as
needed.

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5. Organizational circle: moving back to flat
The flat structure is common in small companies (entrepreneurial startups, university
spin offs). As the company grows it becomes moreComplex and hierarchical,
which leads to an expanded structure, with more levels and departments.
Often, it would result in bureaucracy, the most prevalent structure in the past. It is still,
however, relevant in former soviet republics, china, and most governmental
organizations all over the world. Shell group used to represent the typical
bureaucracy: top-heavy and hierarchical. It featured multiple levels of command and
duplicate service companies existing in different regions. All this made shell
apprehensive to market changes, leading to its incapacity to grow and develop further. The
failure of this structure became the main reason for the company restructuring
into a matrix.
Starbucks is one of the numerous large organizations that successfully developed the matrix
structure supporting their focused strategy. Its design combines functional and
product based divisions, with employees reporting to two heads. Creating a team
spirit, the company empowers employees to make their own decisions and train them to
develop both hard and soft skills. That makes Starbucks one of the best at
customer service.[
Some experts also mention the multinational design, common in global companies, such as
Procter & Gamble, Toyota, and Unilever. This structure can be seen as a complex
form of the matrix, as it maintains coordination among products, functions, and
geographic areas. In general, over the last decade, it has become increasingly clear that
through the forces of globalization, competition, and more demanding customers,
the structure of many companies has become flatter, less hierarchical, more fluid, and even
virtual.
6. Team

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One of the newest organizational structures developed in the 20th century is
team. In small businesses, the team structure can define the entire organization teams
can be both horizontal and vertical while an organization is constituted as a set of
people who synergize individual competencies to achieve newer dimensions,
the quality of organizational structure revolves around the competencies of teams in
totality. For example, every one of the airtelNigeria, one of the largest
telecommunication in Nigeria developing a focused strategy, is an autonomous profit
centre composed of an average of 10 self-managed teams, while team leaders in
each business centre and each region are also a team. Larger bureaucratic
organizations can benefit from the flexibility of teams as well. MtnNigeria, Dangote group,
etc, are all among the companies that actively use teams to perform tasks.

7. Network
Another modern structure is network. While business giants risk becoming too
clumsy to proactive (such as), act and react efficiently, the
New network organizations contract out any business function that can be done better or
more cheaply. In essence, managers in network structures spend most of their
time coordinating and controlling external relations, usually by electronic
means. H&M is outsourcing its clothing to a network of 700 suppliers, more than two-
thirds of which are based in low-cost Asian countries. Not owning any factories,
H&Mcan be more flexible than many other retailers in lowering its costs, which aligns with
its low-cost strategy. The potential management opportunities offered by recent advances in
complex networks theory have been demonstrated including applications to
product design and development and innovation problem in markets and
industries.
8. Virtual

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A special form of boundary less is virtual organization. Hedberg, Dahlgren,
Hansson, and Olve (1999) consider the virtual organization as not physically existing as
such, but enabled by software to exist the virtual exist organization exists within a
network of alliances, using the internet. This means while the core of the organization can
be small but still the company can operate globally is a market leader in its niche. According
to Anderson, because of the unlimited shelf space of the web, the cost of
reaching niche goods is falling dramatically. Although none sells in huge numbers,
there are so many niche products that collectively they make a significant profit, and that is
what made highly innovativeamazon.com so successful.
9. Hierarchy-community phenotype model of organizational structure
In the 21st century, even though most, if not all, organizations are not of a pure hierarchical
structure, many managers are still blind-sided to the existence of the flat community
structure within their organizations. The business firm is no longer just a place
where people come to work. For most of the employees, the firm confers on
them that sense of belonging and identity- the firm has become their "village", their
community the business firm of the 21st century is not just a hierarchy which
ensures maximum efficiency and profit; it is also the community where people
belong to and grow together- where their affective and innovative needs are met. Lim,
Griffiths, and Sambrook (2010) developed the hierarchy-community
phenotype model of organizational structure borrowing from the concept of
phenotype from genetics. "A phenotype refers to the observable characteristics
of an organism. It results from the expression of an organism's genes and the
influence of the environment. Pairs of alleles usually determine the expression of
an organism's genes. Alleles are different forms of a gene. In our model, each
employee's formal, hierarchical participation and informal, community
participation within the organization, as influenced by his or her
environment, contributes to the overall observable characteristics (phenotype) of the
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organization. In other words, just as all the pair of alleles within the genetic
material of an organism determines the physical characteristics of the organism, the
combined expressions of all the employees' formal hierarchical and informal
community participation within an organization give rise to the organizational
structure. Due to the vast potentially different combination of the employees'
formal hierarchical and informal community participation, each organization is
therefore a unique phenotype along a spectrum between a pure hierarchy and a pure
community (flat) organizational structure
The Organizational Process
Organizing, like planning, must be a carefully worked out and applied process. This
process involves determining what work is needed toaccomplish the goal,
assigning those tasks to individuals, and arranging those individuals in a decision-
making framework (organizational structure). The end result of the organizing process is an
organization — a whole consisting of unified parts acting in harmony to execute
tasks to achieve goals, both effectively and efficiently.
A properly implemented organizing process should result in a work •
environment where all team members are aware of their responsibilities. If the organizing
process is not conducted well, the results may yield confusion, frustration, loss of
efficiency, andlimited effectiveness. In general, the organizational process
consists of five steps:

1. Review plans and objectives.

Objectives are the specific activities that must be completed to achieve goals. Plans shape
the activities needed to reach those goals. Managers must examine plans initially and
continue to do so as plans change and new goals are developed.
2. Determine the work activities necessary to accomplish objectives.

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Although this task may seem overwhelming to some managers, it does not need to
be. Managers simply list and analyze all the tasks that need to be accomplished in order
to reach organizational goals.
3. Classify and group the necessary work activities into manageable units. A manager
can group activities based on four models of departmentalization, functional,
geographical, product, and customer.
4. Assign activities and delegate authority.
Managers assign the defined work activities to specific individuals. In addition, they give
each individual the authority (right) to carry out theassigned tasks.
5. Design a hierarchy of relationships.
A manager should determine the vertical (decision-making) and horizontal
(coordinating) relationships of the organization as a whole. Next, using the
organizational chart, a manager should diagram theRelationships
Principles of Organization
The organizing process can be efficiently if the managers have certain
Guidelines so that they can take decisions and can act. To organize in an
Effective manner, a manager can use the following principles ofOrganization.

1. Principle of Specialization
According to the principle, the whole work of a concern should bedivided amongst the
subordinates based on qualifications, abilities, andSkills. It is through division
of work specialization can be achievedwhich results in effective organization.
2. Principle of functional definition
According to this principle, all the functions in a concern should be completely and
clearly defined to the managers and subordinates. This can be done by clearly
defining the duties, responsibilities, authority, and relationships of people towards

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 each other. Clarifications in authority- responsibility relationships help in achieving co-
ordination and thereby organization can take place effectively. For example, the primary
functions of production, marketing, and finance and the authority
responsibility relationships in these departments should be clearly defined to
every person attached to that department. Clarification in the authority-
responsibility relationship helps in efficient organization.
3. Principles of span of control/supervision
According to this principle, span of control is a span of supervision that depicts the
number of employees that can be handled and controlled .effectively by a single
manager. According to this principle, a manager should be able to handle what number
of employees under himshould be decided. This decision can be taken by
choosing either from a wide pr narrow span. There are two types of span of
control:-
A. Wide span of control- it is one in which a manager can supervise and
control effectively a large group of persons at one time.
The features of this span are:
i.less overhead cost of supervision
ii.prompt response from the employees
iii.better communication
iv.better co-ordination
v.suitable for repetitive jobs
vi.according to this span, one manager can effectively and efficiently
Handle a large number of subordinates at one time.
B. Narrow span of control- according to this span, the work and
authority is divided amongst many subordinates and a manager doesn't
supervises and control a very big group of people under him. Themanager

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 according to a narrow span supervises a selected number of
employees at one time.
The features are:
i.-work which requires tight control and supervision, for example,
Handicrafts, ivory work, etc. Which requires artisan ship, there narrow?
Span is more helpful.
ii.Co-ordination is difficult to be achieved.
iii.Communication gaps can come.
iv.Messages can be distorted.
Factors influencing span of control
A. Managerial abilities- in the concerns where managers are capable
Qualified and experienced, wide span of control is always helpful.
B. Competence of subordinates- where the subordinates are capable
and competent and their understanding levels are proper, the
subordinates tend to frequently, visit the superiors for solving their
problems. In such cases, the manager can handle large number of
employees. Hence, wide span is suitable.
C. Nature of work- if the work is of repetitive nature, wide span of
supervision is more helpful. On the other hand, if work requires mental
skill or artisanship, tight control and supervision is required in which
narrow span is more helpful.
D. Delegation of authority- when the work is delegated to lower levels
in an efficient and proper way, confusions are less and congeniality of
the environment can be maintained. In such cases, wide span of control
is suitable and the supervisors can manage and control large number of
sub- ordinates at one time.

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E. Degree of decentralization- decentralization is done in order to
achieve specialization in which authority is shared by many people and
managers at different levels. In such cases, a tall structure is helpful.
There are certain concerns where decentralization is done in very
effective way that results in direct and personal communication
between superiors and sub- ordinates and there the superiors can
manage large number of subordinates very easily. In such cases, wide
span again helps.
1. Principle of scalar chain
Scalar chain is a chain of command or authority that flows from top to bottom. With a chain
of authority available, wastages of resources are
Minimized, communication is affected, overlapping ofwork is avoided and easy
organization takes place.
A scalar chain of commandFacilitates flow of work in an organization and helps
in achievement ofeffective results. As the authority flows from top to bottom, it
clarifies
The authority positions to managers at all level and that facilitateseffective organization.
4. Principle of unity of command
It implies one subordinate-one superior relationship. Every
Subordinate is answerable and accountable to one boss at one time. This helps in avoiding
communication gaps and feedback and response is prompt. Unity of command
also helps in effective combination of resources, that is, physical, financial resources
which helps in easy coordination and, therefore, effective organization
Authority flows from top to bottom

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Managing Director

Marketing manager

Sales/Media Manager

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Salesman

According to the above diagram, the managing director has the highest level of authority.
The marketing manager who shares his authority with the sales manager shares
this authority. From this chain of hierarchy, the official chain of communication
becomes clear which is helpful in achievement of results and which provides
stability to a concern. This scalar chain of command always flow from top to bottom and
it defines the authority positions of different managers at
DELEGATION OF AUTHORITY.
A manager alone cannot perform all the tasks assigned to him. In order to meet the
targets, the manager should delegate authority. Delegation of authority means division of
authority and powers downwards to the subordinate. Delegation is about entrusting
someone else to do parts of your job. Delegation of authority is the process of
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assigning various degrees of decisions-making authority to a subordinate. Robert,
k.1995).
Elements of delegation
1. Authority - in context of a business organization, authority can be defined as the
power and right of a person to use and allocate the
Resources efficiently, to take decisions, and to give orders to achieve the
organizational objectives. Authority must be well- defined. All people who have the
authority should know what is the scope of their authority is and they should not
miss-utilize it. Authority is the right to give commands, orders and get the things done. The
top-level management has greatest authority. Authority always flows from top to
bottom. It ' explains how a superior gets work done from his subordinate by
clearly explaining what is expected of him and how he should go about it. Authority
should be accompanied with an equal amount of responsibility. Delegating
the authority to someone else does not imply escaping from accountability.
Accountability still rest with the person having the utmost
Responsibility - is the duty of the person to complete the taskassigned to him.
A person who is given the responsibility should ensurethat he accomplishes the tasks
assigned to him. If the tasks for which hewas held responsible are not completed,
then he should not giveexplanations or excuses. Responsibility without
adequate authority
leads to discontent and dissatisfaction among the person. Responsibilityflows from
bottom to top. The middle level and lower levelmanagement holds more
responsibility. The person held responsible fora job is answerable for it. If he
performs the tasks assigned as expected,he is bound for praises. However, if
he doesn't accomplish tasksassigned as expected, then he is answerable for that,
authority.

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Accountability - means explaining any variance in the actual
performance from the expectations set. Accountability cannot be
delegated. For example, if 'a' is given a task with sufficient authority,
and 'a' delegates this task to b and asks him to ensure that task is done
well, responsibility rest with 'b f, but accountability still rest with 'a'.
The top-level management is most accountable. Being innovative
means being accountable as the person will think beyond his scope of
job. Accountability, in short term means being answerable for the result.
Accountability cannot be escaped. It arises from responsibility.
For achieving delegation, a manager has to work in a system and has to perform following steps: --
assignment of tasks and duties
-granting of authority-creating responsibility and accountability
Delegation of authority is the base of superior-subordinate relationship, it involves following
steps: -
1. Assignment of duties: the delegator first tries to define the task and duties to the
subordinate. He also has to define the result expected from the subordinates. Clarity of duty
as well as result expected has to be the first step in delegation.
Granting of authority: subdivision of authority takes place when a
superior divides or shares his authority with the subordinate. It is for this
reason every subordinate be given enough independence to carry the
task given to him by his superiors. The managers at all levels delegate
authority and power which is attached to their job positions. The
subdivision of powers is very important to get effective results.
Creating responsibility and accountability - the delegation
process does not end once powers are granted to the subordinates. They
at the same time have to be obligatory towards the duties assigned to

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them. Responsibility is said to be the factor or obligation of an individual
to carry out his duties in best of his ability as per the directions of
superior. Responsibility is very important. Therefore, it is that which
gives effectiveness to authority. At the same time, responsibility is
absolute and cannot be shifted. Accountability, on the others hand, is the
obligation of the individual to carry out his duties as per the standards of
performance. Therefore, it is said that authority is delegated,
responsibility is created, and accountability is imposed. Accountability
arises out of responsibility and responsibility arises out of authority.
Therefore, it becomes important that with every authority position an
equal and opposite responsibility should be attached.
Therefore, every manager, i.e., the delegator has to follow a system to finish the
delegation process. Equally important is the delegate's role that;’ means his
responsibility and accountability is attached with the authority over to here.
Relationship between authority and responsibility
Authority is the legal right of person or superior to command his subordinates
while accountability is the obligation of individual to carry out his duties as per
standards of performance authority flows from the superiors to subordinates, in
which orders and instructions are given to subordinates to complete the task.
It is only through authority, a manager exercises* control. In a way through exercising
the control, the superior is demanding accountability from subordinates. If
the marketing manager directs the sales supervisor for sounits target of sale to
be undertaken in a month. If the above standards are not accomplished, the
marketing manager will be accountable to the chief executive officer. Therefore, we can say
that authority flows from top to bottom and responsibility flows from bottom to top.
Accountability is a result of responsibility and responsibility is result of authority. Therefore,

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for every authority an equal accountability is attached.
Differences between authority and responsibility
Authority Responsibility
It is the legal right of a person -It is the obligation of subordinate to
perform Or a superior to command his/her subordinate form the work assigned to
him/her
Authority is the right of a person or a superior to -Responsibility arises out of
superior-subordinate
Command his/her subordinaterelationship in which subordinate
Agree to carry out duty given to him/her
-Authority can be delegated by a superior to a -Responsibilitycannot be shifted and is
Subordinate absolute
-It flows from top to bottom -It flows from bottom to top

IMPORTANCE OF DELEGATION
1. Delegation of authority is the ground on which the superior-
subordinate relationship stands. An organization functions as the
authority flows from top level to bottom. This in fact shows that through
delegation, the superior-subordinate relationship become meaningful.
The flow of authority is from top to bottom that is a way of achieving
results.
2. Delegation of authority in a way gives enough room and space to the
subordinates to flourish their abilities and skill. Through delegating
powers, the subordinates get a feeling of importance. They get
motivated to work and this motivation provides appropriate results to a
concern. Job satisfaction is an important criterion to bring stability and

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soundness in the relationship between superior and subordinates.
Delegation also helps in breaking the monotony of the subordinates so
that they can be more creative and efficient. Delegation of authority is
not only helpful to the subordinates but it also helps the managers to
develop their talents and skills. Since the manager get enough time
through delegation to concentrate on important issues, their decision-
making gets strong and in a way they can flourish the talents that are
required in a manager. Through granting powers and getting the work
done, helps the manager to attain communication skills, supervision,
and guidance, effective motivation and the leadership traits are
flourished. Therefore, it is only through delegation, a manager can be
tested on his traits.
Delegation of authority is help to both superior and subordinates. This,
In a way, gives stability to a concern is working. With effective results, a concern can think
of creating more departments and divisions flow working. This will require creation
of more managers that can be fulfilled by shifting the experienced, skilled
managers to these positions. This helps in both virtual as well as horizontal
growth that is very important for a concern's stability.
Therefore, from the above points, we can justify that delegation is not just a
process but it is a way by which manager multiples himself and is able to bring stability,
ability and soundness in an organization

CHAPTER FIVE

Leadership

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Concept of Leadership

I used to think that running an organization was equivalent to conducting a symphony

orchestra. But i don't think that's quite it; it's more likejazz. There is more improvisation.
— Warren Bennis good leaders are made not born. If you have the desire and
willpower, you can become an effective leader. Good leaders develop through a never-
ending process of self-study, education, training, and experience (Jago, 1982). This
guide will help you through that process. To inspire your workers into higher levels of
teamwork, there are certain things you must be, know, and, do. These do not come
naturally, but are acquired through continual work and study. Good leaders are
continually working and studying to improve their leadership skills; they are not resting on
their laurels.
Definition of Leadership
Before we get started, let us define leadership. Leadership is a process
by which a person influences others to accomplish an objective and
directs the organization in a way that makes it more cohesive and
coherent. This definition is similar to Northouse's (2007, p3) Definition
— leadership is a process whereby an individual influences a group of
individuals to achieve a common goal. Leaders carry out this process by
applying their leadership knowledge and skill is called, process leadership (Jago,
1982). However, we know that we have traits that can
influence our actions. Is called, trait leadership (Jago, 1982), in that it
was once common to believe that leaders were born rather than made.
These two leadership types are shown in the chart below (Northouse,
2007)human relations —-the six most important words: "i admit i made a mistake." -

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the five most important words: "you did a goodjob." -the four most important words:
"what is your opinion?" -the three most important words: "if you please." -the two
most important words: "thank you," -the one most important word: "we" -the least
important word: "i"

The Four Factors of Leadership.

There are four major factors in leadership
1. Leader
You must have an honest understanding of who you are, what you know, and what
you can do. Also, note that it is the followers, not the leader, or someone else who
determines if the leader is successful. If they do not trust or lack confidence in their
leader, then they will be uninspired. To be successful you have to convince your
followers, not yourself or your superiors, that you are worthy of being followed.
2. Followers
Different people require different styles of leadership. For example, a new hire requires
more supervision than an experienced employee does. A person who lacks
motivation requires a different approach than one with a high degree of motivation.
You must know your people! The fundamental starting point is having a good
understanding of human nature, such as needs, emotions, and motivation. You
must come to know your employees' be, know, and do attributes.
3. Communication
You lead through two-way communication. Much of it is nonverbal. For instance, when
you "set the example," that communicates to your people that you would not
ask them to perform anything that you would not be willing to do. What and how you
communicate either builds or harms the relationship between you and your
employees.

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4. Situation
All situations are different. What you do in one situation, will not always work in another.
You must use your judgment to decide the best course of action and the
leadership style needed for each situation. For example, you may need to confront
an employee for inappropriate behavior, but if the confrontation is too late or too
early, too harsh or too weak, then the results may prove ineffective.
Also, note that the situation normally has a greater effect on a leader's action than
his or her traits. This is because while traits may have an impressive stability over a period,
they have little consistency across situations (Mischel, 1968). This is why a number
of leadership scholars think the process theory of leadership is a more accurate
than the Trait Theory of leadership.
Various forces will affect these four factors. Examples of forces are your relationship with
your seniors, the skill of your followers, the informal leaders within your
organization, and how organized. Are you a leader or boss?
Although your position as a manager, supervisor, lead, etc. Gives you the authority to
accomplish certain tasks and objectives in the organization (called assigned
leadership), this power does not make you a leader, it simply makes you the boss
(Rowe, 2007). Leadership differs in that it makes the followers want to achieve high goals
(called emergent leadership), rather than simply bossing people around (Rowe,
2007). Thus you get assigned leadership by your position and you display emergent
leadership by influencing people to do great things. Bass' theory of
leadership
Bass' theory of leadership states that there are three basic ways to
Explain how people become leaders (Stogdill, 1989; bass, 1990). The
First two explain the leadership development for a small number ofPeople.
These theories are:

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1. Some personality traits may lead people naturally into leadership
roles. This is the trait theory.
A crisis or important event may cause a person to rise to the occasion,
which brings out extraordinary leadership qualities in an ordinary
person. This is the great events theory.
People can choose to become leaders. People can learn leadership
skills. This is the transformational or process leadership theory. It is
the most widely accepted theory today and the premise on which this
guide based.
TotalLeadership
What makes a person want to follow a leader? People want to be guided by those they
respect and who have a clear sense of direction. To gain respect, they must be
ethical. A sense of direction is achieved by conveying a strong vision of the
future.
When a person is deciding if she respects you as a leader, she does not think about
your attributes, rather, she observes what you do so that she can know who you really are.
She uses this observation to tell if you are an honorable and trusted leader or a self-serving
person who misuses authority to look good and get promoted. Self-serving leaders are not
as effective because their employees only obey them, not follow them. They succeed in
many areas because they present a good image to their seniors at the expense of their
workers.
Beknow do
The basis of good leadership is honorable character and selfless serviceto your
organization. In your employees' eyes, your leadership is
Everything you do that effects the organization's objectives and theirwell-being.
Respected leaders concentrate on (US Army, 1983):

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What they are /be/ (such as beliefs and character)
What they know (such asjob, tasks, andhuman nature)
What they do (such as implementing, motivating, and providingdirection).
What makes a person want to follow a leader? People want to be guided
By those they respect and who have a clear sense of direction. To gain
Respect, they must be ethical. A sense of direction is achieved byConveying a strong
vision of the future.
The two most important keys to effective leadership
According to a study by the hay group, a global management
Consultancy, there are 75 key components of employee satisfaction
(Lamb, Mckee, 2004). They found that:
Trust and confidence in top leadership was the single most reliablePredictor of employee
satisfaction in an organization.
Effective communication by leadership in three critical areas was the
Key to winning organizational trust and confidence:
1. helping employees understand the company's overall business
strategy.
2. helping employees understand how they contribute to achieving keyBusiness
objectives.
3. Sharing information with employees, on both how the company is
Doing and how an employee's own division is doing — relative toStrategic business
objectives.
So in a nutshell — you must be trustworthy and you have to be able to
Communicate a vision of where the organization needs to go. The next
Section, principles of leadership, ties in closely with this key concept.

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Principle of leadership
To help you be, know, and do, follow these eleven principles ofLeadership (US Army,
1983).
1. Know yourself and seek self-improvement - in order to know
Yourself, you have to understand your; be, know, and do, attributesSeeking self
improvement, means continually strengthening yourAttributes. This can be
accomplished through self-study, formal classes,Reflection, and interacting with
others.
3. Be technically proficient - as a leader, you must know your job an
Have a solid familiarity with your employees' tasks.
Seek responsibility and take responsibility for your actions -
search for ways to guide your organization to new heights. And when
things go wrong, they always do sooner or later — do not blame others.
Analyze the situation, take corrective action, and move on to the next
challenge. .,
Make sound and timely decision: use good problem solving,
decision making, a planningtool
Set the example - be a goad role. Model for your employees. They
must not only hear what they are expected to do, but also see. We must
become the change we want to .see -mahatma Dandhi
Know your people and lookout for their well-being - know human
nature andtheimportance of sincerely caring for your workers.
Keep your workers informed -, know how to communicate with not
only them, but also seniors and other key people. ,1.
8. Develop a sense of responsibility in your workers,-help to develop
good character traits that will helpthem carryout their professional

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responsibilities.
9. Ensure that tasks are understood, supervised, and accomplished -
Communication is the key to this responsibility.
Train as a team, - although many so called leaders call their
organization, department, section, etc. A team; they are not really
teams...they are just a group of people doing their jobs.
Use the full capabilities of your organization - by developing a
team spirit, you will be able to employ your organization, department,
section, etc. To its fullest capabilities.
Attribute of leadership
If you are a leader who can be trusted, then those around you will grow to respect you. To
be such a leader, there is a leadership framework to guide you:
Beknow do
-be a professional. Examples: be loyal to the organization, perform
Selfless service, and take personal responsibility.
-be a professional who possess good character traits. Examples;
Honesty, competence, candor, commitment, integrity, courage, Straight forwardness,
imagination.
-know the four factors of leadership follower, leader,Communication,
situation.
-know yourself. ; Examples; strengths, and weakness of your character,Knowledge and
skills.
-know human nature. Examples: human needs, emotions, and how
People respond to stress.
-know your job. Examples: be proficient and be able to train others intheir tasks. ',
•-Know your organization. Examples, where to go for help its climate and culture, who the
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unofficial leaders are.
-Do provide direction. Examples: goal setting, problem solving,Decision making,
planning.
-Do implement. Examples: communicating, coordinating, supervising,Evaluating.
-Do motivate. Examples: develop morale and esprit de corps in theOrganization, train,
coach, counsel.
Environment
Every organization has a particular work environment, which dictates to a considerable
degree how its leaders respond to problems and opportunities. This brought
about by its heritage of past leaders and its present leaders.

Goals, values, and concepts

Leaders exert influence on the environment via three types of actions:
'-1. The goals and performance standards they establish. I
The values they establish forthe organization.
The business and people concepts they establish.
Successful organizations have leaders who set high standards and goals across the
entire spectrum, such as strategies, market leadership, plans, meetings and presentations,
productivity, quality, and reliability. Values reflect the concern the
organization has for its employees, customers, investors, vendors, and
surrounding community. These values define the manner in how business will
be conducted. Concepts define what products or services the organization will
offer and the methods and processes for conducting business. These goals, values,
and concepts make up the organization's personality or how both outsiders and
insiders observe the organization. This personality defines the roles, relationships,
rewards, and rites that take place.

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Roles and relationships
Roles are the positions that are defined by a set of expectations about behavior of any job
incumbent. Each role has a set of tasks and responsibilities that may or may not be
spelled out. Roles have a powerful effect on behavior for several reasons, to
include money being paid for the performance of the role, there is prestige
attached to a role, and a sense of accomplishment or challenge.
Relationships are determined by a role's tasks. While some tasks are performed alone, most
are carried out in relationship with others. The tasks will determine who the role-holder
is required to interact with, how often, and towards what end. Also greater the
interaction, the greater the liking. This in turn leads to more interaction that
is
Frequent. In human behavior, it is hard to like someone whom we have
No contact with, and we tend to seek out those we like. People tend to do
What they are rewarded for, and friendship is a powerful reward. Many
Tasks and behaviors that are associated with a role are brought about bythese
relationships. That is, new task and'behaviors are expected of the
Present role-holder because a strong relationship was developed in thePast, either by that
role-holder or by a prior role-holder.
Culture and climate:There are two distinct forces that dictate how to act within an
Organization:
Culture and climate; Each Organization has its own distinctive culture. It is a combination
ofthe founders, past leadership, current leadership, crises, events, history,
And size (Newstrom, Davis, 1993). These results in rites: the routines,
Rituals, and the "way we do things." these rites influence individual
Behavior on what it takes to be in good standing (the norm) and direct theappropriate
behavior for each circumstance.

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The climate is the feel of the organization, the individual and shared
Perceptions, and attitudes of the organization's members (Ivancevich,
Konopaske, Matteson, 2007). While the culture is the deeply rooted
Nature of the organization that is a result of long-held formal and
Informal systems, rules, traditions, and customs; climate is a short-term
Phenomenon created by the current leadership. Climate represents thebeliefs about the
"feel of the organization" by its members. This
Individual perception of the "feel of the organization" comes from what
The people believe about the activities that occur in the organization.
These activities influence both individual and team motivation and
Satisfaction, such as:
-How well does the leader clarify the priorities and goals of the organization? What is
expected of us?
What is the system of recognition, rewards, and punishments in theorganization?
-How competent are the leaders?
-Are leaders free to make decisions?
-What will happen if i make a mistake?
Organizational climate is directly related to the leadership and management style
of the leader, based on the values, attributes, skills, and actions, as well as the priorities of the
leader. Compare this to "ethical climate" —• the feel of the organization about the
activities that have ethical content or those aspects of the work environment that
constitute ethical behavior. The ethical climate is the feel about whether we do
things right; or the feel of whether we behave the way we ought to behave. The
behavior (character) of the leader is the most important factor that influences the
climate.
On the other hand, culture is a long-term, complex phenomenon. Culture
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represents the shared expectations and self-image of the organization. The mature values
that create tradition or the "way we do things here." things are done differently in every
organization. The collective vision and common folklore that define the institution
are a reflection of culture. Individual leaders cannot easily create or change
culture because culture is a part of the organization. Culture influences the
characteristics of the climate by its effect on the actions and thought processes of
the leader. But, everything you do as a leader will affect the climate of the
organization.
The process of great leadership
The road to great leadership (Zouzes& Posner, 1987) that is common to successful
leaders:
Challenge the process - first, find a process that you believe needs
to be improved the most.
Inspire a shared vision - next, share your vision in words that can be
understood by your followers.
Enable others to act - give them the tools and methods to solve the
problem.
Model the way - when the process gets tough, get your hands dirty. A
boss tells others what to do; a leader shows that it can be done.
Encourage the heart - share the glory with your followers' hearts,
while keeping the pains

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Leadership Style
Leadership style is the manner and approach of providing direction, implementing plans,
and motivating people Robert.K(1993) led a group of researches to identify different styles
of leadership. This early studies has been very influential and established three major
leadership styles, the three major leadership style are;
Authoritative or Autocratic leadership
Participative or Democratic leadership
Delagative of Free Reign
Although good leaders use all three styles, with one of them normally dominant, bad
leaders tend stick with one style.
1. (Authoritarian) Autocratic leadership;
This style is used when leaders tell their employees what they want done and how they want
it accomplish, without getting the advice of their followers. Some of the appropriate
conditions to use it are when you have all the information to solve the problem, you are
short on time, and your employees are well motivated.
Some people tend to think of this style of leadership a vehicle for yelling, using demeaning
language, and leading by threats and abusing their power.
This is not the Authoritarian style, rather it is an abusive, unprofessional styles called
“Bossing people around” . It has no place in a leader’s repertoire.
The authoritarian style should normally only be used on rare occasions if you have the time
and want to gain more commitments and motivation from your employees, then you
should use the participative style.

Participative (democratic) Leadership:

Let’s work together to solve this …….

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This style of leadership involves including one or more employees in the decision making
process (determining what to do and how to do i t).
However,the leader maintains the final decision making authority using this style is not a
sign of weakness; rather it is a sign of strength that your employees will respect.
This is normally used when you have of the information, and your employee have other
part. Note that a leader is not expected to know everything –this is why you employed
knowledgeable and skilful employees. Using this style is of Z mutual benefit- it allows
them to become part of the team and allows you to make better decisions.
Delagative(Free Reign)
You two take care of the problem while I go…
In this style, the leader allows the employees to make the decisions.
However, the leader is still responsible for the decision that are.
This is used when employee are able to analyze the situation and determine what need to be
done and how to do it. You cannot do everything! You must set priorities and delegates
certain tasks.
This is not a style to use so that you can blame others when things go wrong, rather this is a
styles to be used when you fully trust and confident in the people below you. Do not be
afraid to use it, however, use it wisely.
Note ; This is also known as laissez fair {or laisser faire}, which is the noninterference in
the affairs of other, {French:lasserfaire,second person imperative of lasser,tolet:faire, to do}
A good leader uses all three styles, depending on what forces are involed between the
followers, the leader and the situation. Somes examples include
Using a Authoritarian style on a new employee who is just learning the job. The leader is
competent and a good coach. The employee is motivated to learn a new skill. The situation
is a new environment for the employee.
Using a participative style of leadership with a team of workers who know their job, The

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leader knows the problem, but does not have all the information. The employees know
theirjob and want to become part of the team.
Using a Delagative style with a worker who knows more about the job than you you do.
You cannot do everything and the employee needs to take ownership of her job! In addition
this allows you to be at other places, doing other things
Using all three: Telling your employees that a procedure (authoritarian). Asking for their
ideas and input on creating a new procedure (participative) Delegating tasks in order to
implement the new procedure (Delagative).
Forces that influence to use included
How much time is 7available?
Are relationship based on respect and trust or on disrespect?
Who has the information-you, your employees, or both?
How well your employees are trained, and how well you know the tasks.
Internal conflict
Stress level
Types of task. Is it structured, unstructured, complicated, or simple?
Laws established procedure such as, or training plans

Positive and Negative Approaches

There is a difference in ways leaders approach their employees, positive leaders use
rewards, such as education, independence, etc to motivate employee. While on the other
hand negative employers emphasizes penalties.
The negative leaders approach has a place in leader’s repertoire of tools;it must be used
carefully due to its high cost on the human spirit
Negative leaders act domineering and superior with people, they believe only way to get
things done is through penalties, such as loss of job, days off without pay, reprimanding
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employees in front of others, etc. They believe their authority is increased by frightening
everyone into higher levels of productivity. Yet what always happens when this approach is
used wrongly is that morale falls; which of course leads to lower productivity.
Also note that most leaders do not strictly use one or another, but are somewhere on a
continuum ranging from extremely positive to extremely negative. People who
continuously work out of the negative are bosses while those who continuously work of the
positive are considered real leaders.

Use of Consideration and Structure

Two other approaches that leaders use are:

1. Consideration (employee Orientation)-leaders are concerned about the human needs of
their employees they build teamwork, helps employees with their problems and provide
psychological support.
2. Structure (task orientation) - leaders believe that they get results by consistently keeping
people busy and urging them to produce.
There is evidence those leaders who are considerate in their leadership style are higher
performance and are more satisfied with their job (Scriesheim 1982).Also notice that
consideration and structure are independent to each other, thus they should not be viewed on
opposite ends of a continuum.
For example a leader who becomes more considerate does not necessary mean she has
become less structured. See Blake and Moutons managerial grid as, it is based on this
concept
Paternalism
Paternalism has an at times been equated with leadership style. Yet most definition of
leadership normally state or imply that one of the actions within leadership is that of

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influencing. For example, the army uses the following definitions;
Leadership is influencing people- by providing purpose, direction, and motivation- while
operating to accomplish the mission and improving the organization.
The army further goes on by defining “influence” as; as a mean of getting people to do what
want them to do. It is the means or method to achieve two ends: operating and improving
but there is more to influencing than simply passing alone other. The example you set is just
as important as the word u speak .and u set an examples; good or bad; with every action you
take and word you utter ,on or off duty. Through your word and example, you most
communicate purpose, direction, and motivation .
While paternalism; is define as( Webster);
A system under which an authority is undertaking to supply needs or regulate conduct of
those under its control in matters affecting them as an individual as wels as in their
relationship to authority and to each other.
Thus paternalism suppliers needs for those under its protection or control, while leadership
get things done. The first is directed inwards while their later is directed outwards
Geert Hofstede, (1977) studied culture within organization. Part of his study was on
dependence relationship or power difference- the extent to which the less powerful
members of an organization expect and accept that power is distributed equally Hoftede
gave this story to illustrate this power difference:
The last revolution in Sweden disposed of king Gostav Iva, whom they considered
incompetent , and surprising invited GeanBaptise
Bernadotte, a French Genaral who served under Napoleon, to become their new king . He
accepted and became king Charles XIV. Soon after, he needed to address the Swedish
parliament. Wanting to be accepted he tried to do the speech in their language. His broken
language amused the Swedes so much that the roared with laughter .
The French man was so upset that he never tried to speak Swedish again . Bernodotte was a

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victim of culture shock- never in his French upbringing and military career had he
experienced subordinates who laugh at the mistakes of their superiors. This story has a
happy-ending as he, was considered very good and ruled the country as a highly respected
constitutional monarch until 1844.(his descendant still occupy the Swedish throne).
Sweden differ from French in the way society handle inequality
(Those in charge and the followers) . To measure inequality or power differences,Hostede
studied three survey questions from a larger survey that both factored and carried the same
weight :frequency of employees being afraid to express dis-agreement with their managers.
Subordinate’s perception of their boss’s actual decision ……making style
(Paternalistic style was one choice).
Subordinate’s preference of their boss’s decision making style (again, paternalistic style was
one choice)
He developed a power deference index (PDI) for the 53 countries that took the survey. Their
scores range from 11 to 104.The higher the number a country receive the more autocratic
and/or paternalistic their leadership which of course relate to employees been more afraid to
unwilling to disagrees with their Bosses . While lower numbers means a consultative style
of leadership is used, these translate to employees who are not as afraid as their bosses.
For example, Malaysia has the highest PDI scores, being 104, while Australia has the
lowest with 11.
In addition of course, as the study above illustrate, Sweden has a relative low score of 31,
while France has IU of 68. USA’s is 40..Note that these scores are relative, not absolute in
that relativism affirms that one culture has no absolute criteria for judging activities of other
cultures as “low” or “Noble”
Keeping the above in mind it seems that some pictures paternalistic behaviour as all most
barbaric way of getting things accomplished. Yet leadership is all about getting things done
for the organization. And in some situation a paternalistic style of decision -making might

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be required; indeed, in some cultures and individuals, it may also b expected by not only in
charge, but also the followers. That is what takes leadership style quit interesting –they run
alone the same continuum as Hofstede’s PDI ranging from paternalistic to consultative style
of decision-making. This allows a wide range of individual behavour to be dealt with,
ranging from beginners to peak performance .In addition, its account for the fact that not
every is the same.
However, when paternalistic or autocratic are relied upon too much and the employees are
ready and/or willing to react to consultative type of leadership style, then it normally
becomes quit damaging to the performance to the organization

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