Management Theory and

practice

Shrinivas S Shikaripurkar
February 2018
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S. No Reference No Particulars

1 Chapter 1 Evolution of Management

2 Chapter 2 Nature of Management

3 Chapter 3 Corporate Culture

4 Chapter 4 Structure of an Organisation
5 Chapter 5 Business Communication
6 Chapter 6 Managerial Decision Making
7 Chapter 7 Leadership
8 Chapter 8 Motivation
9 Chapter 9 Change & Management
10 Chapter 10 Management Information System
 Introduction
• Management is a universal phenomenon and is concerned with all
the aspects of an organisation’s functioning.
• The success of an organisation depends a great deal on the
effectiveness of management. The main objective of management
is to draw maximum output out of minimum efforts and resources.
Therefore, every organisation must ensure effective management.
• Efficiency and effectiveness are the two important aspects of
successful management. This is because management is a problem-
solving process of effectively achieving the objectives by efficient
use of resources.
• In an organisation, management is operated through a number of
functions called management functions. These functions are
planning, organising, staffing, directing and controlling.
 Chapter 1

Evolution of Management
 History of Management

• The history of management can be traced back to 5000 B.C.

when the agriculture revolution was at the initial stage.

• In Egypt, in 2900 B.C., the pyramids were built in a highly

organised and coordinated manner.

• Management was also a part of the Roman Empire, which

organised its general administration and controlled its
political, military and judgmental issues by using effective
communication.
 History of Management

Industrial Revolution (1760 to sometime between 1820 and 1840.)

Industrial revolution was a period of transition from manual production

methods to new manufacturing processes in the late eighteenth century.
During industrial revolution, management was based on two main
propositions, which are:

• Firstly, labour was perceived as a bunch of lethargic people who

would work only when controlled and supervised.

• Secondly, labour was the only factor that could bring reduction in
costs. Therefore, all the efforts were made to reduce labour costs and
increase production.
 History of Management

Industrial Revolution

There were many characteristics of industrial revolution. Some of

the important characteristics are:
 Specialisation
 Standardisation
 Synchronisation
 Maximisation
 Centralisation
 History of Management

Industrial Revolution - the important characteristics:

• Specialisation: During industrial revolution, the principle of division of labour

was followed wherein each worker was allotted a particular job with the
purpose of achieving specialisation in that job.

• Standardisation: During the industrial revolution, the main focus was laid on
standardisation wherein identical products were produced in huge quantities.

• Synchronisation: It refers to the blending of all different elements at one place.

• Maximisation: Here, it refers to the maximisation of production.

• Centralisation: Centralisation means that all controlling powers lie in the

hands of top management.
 History of Management
Forces Behind Management Thoughts

•Forces Affecting Management

Thoughts
•Political Forces
•Social Forces
•Economic Forces
 History of Management

Forces Behind Management Thoughts

• Political forces: Political forces, such as government regulations,

political institutions, and trade policies affect in the areas of
environmental analysis, organisational design and structure, and
employee rights.

• Social forces: These forces can be in the form of social norms arising
from the values and beliefs of people in a society.

• Economic forces: These forces are responsible for the formation of

base market economy and other concepts, such as private ownership
of property, economic freedom, and competitive markets
 Approaches to Management

Classical Approach
These approaches are discussed as follows:

• Scientific Management: The scientific management approach was developed by

Frederick Winslow Taylor (1856-1915), who was an American engineer. Thus,
scientific management is also popular by the name of Taylorism.

• Administrative Management: Henry Fayol (1841-1925), a French mining

engineer, promoted the concept of administrative management. He focussed on
developing administrative principles that could be applicable to both general and
higher managerial levels.

• Bureaucratic Management: Bureaucratic management was promoted by Max

Webber (1864-1920), who was a German sociologist. According to Webber,
bureaucratic management is the most appropriate administration.
 Frederick Taylor
• Father of Scientific
Management

“Workers can be retooled

like machines, their physical
& mental gears recalibrated
for better productivity”
 Bethlehem Steel
• 12.5 tons  47.5 tons
Correct
(loading of steel) movements+
• US$1.85  US$1.15 Tools +
Sequencing
(Incentive)

• Frank & Lillian Gilbreth  Time & Motion study

Max Weber
340 steps  How to deliver the package correctly?
 Henri Fayol

Remuneration

Discipline Scalar
Chain

Equity Esprit de corps

 14 principles by Henri Fayol
1. Division of labour
2. Authority and responsibility
3. Discipline
4. Line of authority
5. Centralization
6. Unity of direction – one plan of action
7. Unity of command – one boss
8. Order – right job
9. Initiative – encourage innovation
10. Equity
11. Remuneration
12. Stability of tenure
13. General interest over individual interest
14. Esprit de corps – union is strength – harmony and mutual understanding.
 Approaches to Management

Modern Approach
According to this approach, employees do not necessarily work for money and they
also like to receive affection and respect of co-workers, which further increases their
productivity.

• Quantitative approach: In this approach, quantitative tools are used for

managerial decision making.

• Operations research: It is an approach used for improving the effectiveness of

management decisions.

• Operations management: It is used to manage production in manufacturing

organisations.
 Approaches to Management

Modern Approach
• Management information system (MIS): This is a computerised management
system used to provide information required by organisations for their effective
management.

• Systems approach: According to this approach, a system can be defined as a set of

components that are interacting regularly or are interdependent, thus making a
single unit.

• Contingency approach: In this approach, an organisation determines problems by

analysing its conditions and environment.
 Major Contributors

Charles Babbage
• Charles Babbage (1792-1891) was a mathematician, philosopher, and a
mechanical engineer.

• In his view, human factor plays a significant role in the success of an

organisation; therefore, employees should be associated with the management in
a manner that benefits both.

• He also developed the concept of profit sharing and participative decision making.

• He advocated the use of quantitative methods and industrial engineering

techniques to improve manufacturing.
 Major Contributors

Frederick W. Taylor
Fredrick Winslow Taylor is known as the father of scientific management. Taylor was
also known for his contributions in the following areas:

• Use of descriptive cost accounting

• Concept of mutual understanding between workers and management

• Provision of bonus to workers for making suggestions for improvement in

productivity

• Invention of an analytical machine, also known as differential machine.

 Major Contributors

Henry Laurence Gantt

• Henry Laurence Gantt was a management consultant.

• Gantt has been known for developing ‘Task and Bonus Plan. According to the
plan, bonus must be paid to those managers who teach their employees to finish
tasks efficiently in the given time period.

• His best contribution emerged in the form of Gantt charts, which are visual-
diagrammatic tools used for creating production schedules.

• The other variations of Gantt charts are Program Evaluation Review Technique
(PERT) and Critical Path Method (CPM).
 Major Contributors

Henri Fayol
Henri Fayol is also considered as the father of modern management. He also laid
down best practices for managers, which are as follows:

• Managers must be able to complete work within a specified period of time

• Managers must organise both human and non-human resources in order to carry
out tasks effectively.

• Managers must take commands while selecting and assessing workers.

• Managers must coordinate with all the workers for sharing information and
problems.

• Managers must ensure that all the activities are carried out as planned.
 Major Contributors

Robert Owen
• According to him, investing in human resource is far more intelligent than
investing in other assets. He advocated that employees should be working
because they are interested in it rather than being forced.

• He also propounded that there should be a harmonious relationship between

managers and employees in order to improve the efficacy of production.

• His philosophy and ideas are considered as a forerunner to the development of

behavioural approach of management.
 Major Contributors

Max Weber
Max Weber is famous for developing the bureaucratic management theory in which
he emphasised on the requirement of a hierarchy in organisations. Weber perceived

three types of administration, namely traditional, charismatic and bureaucratic.

• In traditional organisations, managerial positions are handed down from one

generation to the other irrespective of intelligence, knowledge, and experience.

• In charismatic organisations, management functions are not delegated and all

the employees are considered to be the loyal subjects of a leader.

• In bureaucratic organisations, a person is given a managerial responsibility as

per his/ her capability.
 Major Contributors

George E. Mayo
• He is famous for his contribution in Hawthorne studies.

• Mayo was involved in the project in 1929 and 1930, and interviewed the workers
involved in the experiments.

• The outcome of his findings in Hawthorne studies later gave way for the human
relations movement. The movement focuses on the concept of job satisfaction,
group norms, and leadership quality and their significance in the improvement of
productivity.
 Recent Developments in Management

Just In Time and Lean Production

• JIT is a philosophy of continuous improvement, wherein unused or waste
resources are identified and removed. The technique of JIT was first used by an
American organisation called Ford Motor Company during the 1920s. However,
the technique is known as Japanese Innovation because it was popularised by
Toyota Motor Corporation of Japan in 1954.

• Lean manufacturing is a management philosophy that is based on eliminating

the activities that do not add any value to the end product and finding
efficiencies. In lean manufacturing, the approach of ‘less is better’ is adopted to
produce goods on demand only.
 Recent Developments in Management

Some other Important Developments in Management

•5 S

•Six Sigma

•Kaizen
 Recent Developments in Management

Some other Important Developments in Management

5S: It is a waste eliminating technique used in organisations to improve production
efficiency. This technique comprises Japanese words beginning with ‘S.’

• Seiri (Sort): It refers to organising the work area in such a manner that all the
unnecessary items are eliminated.

• Seiton (Straighten): It refers to arranging all the required items in an accessible

range for users and substitutes too.

• Seiso (Shine): It refers to keeping machines, equipment, and tools clean.

• Seiketsu (Standardise): It refers to standardising the practices so that they are

similar across all the workstations that indulge in same type of job.

• Shitsuke (Sustain): It refers to continuing the process of improvement.

 Recent Developments in Management

Some other Important Developments in Management

Six Sigma: It is a technique that lays emphasis on measuring the quality to attain
perfection. Six Sigma was developed at Motorola in 1986 for improving processes. . In
the process of Six Sigma, 99.99966% of the products manufactured are statistically
expected to be free of defects (3.4 defective parts/million).

Kaizen: It is a Japanese word which means "improvement" or "change for the best.”
It can be described as a philosophy or practice that emphasises continuous
improvement of processes in manufacturing, engineering, and business management.
Is 99% good enough?
 Can you Relate Practically?
99% Good (2.8 Sigma) 99.99966% Good (6 Sigma)

20,000 lost articles of mail per hour 7 articles lost per hour

Unsafe drinking water for almost 15 One unsafe minute every 7

minutes each day months

5,000 incorrect surgical operations per 1.7 incorrect surgical operations

week per week

Two short or long landings at most One short or long landing every 5
major airports every day years

2,00,000 wrong drug prescriptions 68 wrong prescriptions per year

each year

No electricity for almost seven hours One hour without electricity every
each month 34 years
Thank You