What is Management?

The concept of management has acquired special significance in the present competitive and complex business world. Efficient and purposeful management is absolutely essential for the survival of a business unit. Management concept is comprehensive and covers all aspects of business. In simple words, management means utilising available resources in the best possible manner and also for achieving well defined objectives. It is a distinct and dynamic process involving use of different resources for achieving well defined objectives. The resources are: men, money, materials, machines, methods and markets. These are the six basic inputs in management process (six M's of management) and the output is in the form of achievement of objectives. It is the end result of inputs and is available through efficient management process.

The term 'management' is used extensively in business. It is the core or life giving element in business. We expect that a business unit should be managed efficiently. This is precisely what is done in management. Management is essential for the conduct of business activity in an orderly manner. It is a vital function concerned with all aspects of working of an enterprise.

Definitions of Management
1. According to George R. Terry, "Management is a distinct process consisting of planning, organising, actuating and controlling, performed to determine and accomplish stated objectives by the use of human beings and other resources". 2. According to Henry Fayol, "To manage is to forecast and to plan, to organise, to command, to coordinate and to control".

3. According to Peter Drucker, "Management is a multi-purpose organ that manages business and manages managers and manages workers and work". 4. According to Harold Koontz, "Management is the art of getting things done through and with people in formally organized groups. 5. According to Mary Parker Fallett, "Management is the art of getting things done through people".

Characteristics of Management
1. Management is a managerial process: Management is a process and not merely a body of individuals. Those who perform this process are called managers. The managers exercise leadership by assuming authority and direct others to act within the organisation. Management process involves planning, organising, directing and unifying human efforts for the accomplishment of given tasks. 2. Management is a social process- Management takes place through people. The importance of human factor in management cannot be ignored. A manager's job is to get the things done with the support and cooperation of subordinates. It is this human element which gives management its special character. 3. Management is action-based: Management is always for achieving certain objectives in terms of sales, profit, etc. It is a result-oriented concept and not merely an abstract philosophy. It gives importance to concrete performance through suitable actions. It is an action based activity. 4. Management involves achieving results through the efforts of others: Management is the art of getting the things done through others. Managers are expected to guide and motivate subordinates and get the expected performance from them. Management acts as an activating factor. 5. Management is a group activity: Management is not an isolated individual activity but it is a collective activity or an activity of a group. It aims at using group efforts for achieving objectives. Managers manage the groups and coordinate the activities of groups functioning in an organisation. 6. Management is intangible: Management is not directly visible but its presence is noticed in the form of concrete results. Management is intangible. It is like invisible spirit, which guides and motivates people working in a business unit. Management is like government, which functions but is not visible in physical form. 7. Management is aided, not replaced by computers: The computer is an extremely powerful tool of management. It helps a manager to widen his vision. The computer supplies ocean of information for important decisionmaking. The computer has unbelievable data processing and feedback

facilities. This has enabled the manager to conduct quick analysis towards making correct decisions. A computer supports manager in his managerial work. However, it cannot replace managers in business. They were required in the past, at present and also in future. Their existence is absolutely essential in the management process. 8. Management is all pervasive: Management is comprehensive and covers all departments, activities and employees. Managers operate at different levels but their functions are identical. This indicates that management is a universal and all pervasive process. 9. Management is an art, science as well as a profession: Management is an art because certain skills, essential for good management, are unique to individuals. Management is a science because it has an organised body of knowledge. Management is also a profession because it is based on advanced and cultivated knowledge. 10.Management aims at coordination of activities: Coordination is the essence of management. It gives one clear direction to the whole organisation and brings unity and harmony in the whole business unit. For such coordination, effective communication at all levels is essential. 11.Management is innovative: Management techniques are dynamic and innovative. They need to be adjusted as per the requirements of the situations. Another manager need not repeat the decisions of one manager. Similarly, a manager has to change his decisions under different situations. 12.Management has different operational levels: Every Organisation needs managers for managing business activities. The manager's job is basically the same at all levels. The managers at the higher levels have more important duties while managers at the lower levels have to perform routine functions i.e duties. 13.Management is different from ownership: Management is concerned with the management of business activities. Managers are not the owners but they manage the business on behalf of the owners. Separation of ownership and management is a special feature of modem business organisation. 14.Management has vast scope: The scope of management is quite comprehensive. It covers all aspects of business. The principles of management guide managers while managing various business activities. 15.Management is dynamic: Business is influenced by changes in economic, social, political technological and human resource. Management adjusts itself to the changing atmosphere making suitable forecasts and changes in the policies. Hence, management is treated as a dynamic activity. 16.Management aims at achieving predetermined objectives: Management is a meaningful activity. All organisations are essentially groups of individuals formed for achieving common objectives. An Organisation exists for the attainment of specific objectives.

Need of Management
1. Direction, coordination and control of group efforts: In business, many persons work together. They need proper direction and guidance for raising their efficiency. In the absence of guidance, people will work as per their desire and the, orderly working of enterprise will not be possible. Management is needed for planning business activities, for guiding employees in the right direction and finally for coordinating their efforts for achieving best/most favorable results. 2. Orderly achievement of business objectives: Efficient management is needed in order to achieve the objectives of business activity in an orderly and quick manner. 3. Performance of basic managerial functions: Planning, Organising, Coordinating and Controlling are the basic functions of management. Management is needed as these functions are performed through the management process. 4. Effective communication at all levels: Management is needed for effective communication within and outside the Organisation. 5. Motivation of employees: Management is needed for motivating employees and also for coordinating their efforts so as to achieve business objectives quickly. 6. Success and stability of business enterprise: Efficient management is needed for success, stability and prosperity of a business enterprise.

Modem business is highly competitive and needs efficient and capable management for survival and growth. Management is needed as it occupies a unique position in the smooth functioning of a business unit. This suggests the need of efficient management of business enterprises. Profitable/successful business may not he possible without efficient management. In this sense, "No management, no business" is true. Survival of a business unit in the present competitive world is possible only through efficient and competent management.

Meaning of Management Process

The term management is explained in different ways. For example, it is said that management is what management does. Here, management is explained with reference to its basic functions which include planning, organising, coordinating and controlling. Similarly, management is described as a process which involves various elements. Management process is a continuous

one and is run by the managers functioning at different levels. Management is now recognised as a distinct process in which managers plan, organise, lead, motivate and control human efforts in order to achieve well defined goals. In fact, process means a series of activities/operations undertaken/conducted for achieving a specific objective. Process is a systematic way of doing things. For example, in a factory there is a production process. Similarly, in the management process, resources and human efforts are used in an orderly manner for achieving specific objectives. The management process suggests functions to be performed by the managers.

Definition of Management Process

1. According to D. E. McFarland, "Management is the distinct process by which the managers create, direct, maintain and operate purposive organisation through systematic, co-coordinated and cooperative human efforts. 2. According to Gemp R. Terry, "Management is a distinct process consisting of planning, organisisng, actuating, and controlling, performed to determine and accomplish objectives by the use of people and other resources".

Functions of Management

The essential elements/components of Management Process are four.

a. Planning b. Organising c. Directing and d. Controlling.

We may add some more elements in the management process. Such elements are:-

i. ii. iii. iv.

Motivating Co-coordinating Staffing and Communicating.

The elements in the management process are actually the basic functions of management these functions constitute the management process in practice. Management process is in fact, management in practice. This process suggests what a manager is supposed to, do or the basic functions that he has to perform while managing the job assigned to him.

Luther Gullic gave a new formula to suggest the elements of Management Process i.e. basic functions of management. According to him, management process may be indicated by the word "PODSCORB. Here, P' states for 'planning'. "O" for 'organising', "D" for 'directing', "S" for 'Staffing', "CO" for 'Coordinating, "R" for 'Reporting' and "B" for 'Budgeting'. Gullic coined the word "PODSCORB" to suggest seven functions of management.

The following figures show the management process and the elements involved:

Elements of Management Process

1. Planning: Planning is the primary function of management. It involves determination of a course of action to achieve desired results/objectives. Planning is the starting point of management process and all other functions of management are related to and dependent on planning function. Planning is the key to success, stability and prosperity in business. It acts as a tool for solving the problems of a business unit. Planning plays a pivotal role in business management It helps to visualize the future problems and keeps management ready with possible solutions.

2. Organising: Organising is next to planning. It means to bring the resources (men, materials, machines, etc.) together and use them properly for achieving the objectives. Organisation is a process as well as it is a structure. Organising means arranging ways and means for the execution of a business plan. It provides suitable administrative structure and facilitates execution of proposed plan. Organising involves different aspects such as departmentation, span of control delegation of authority, establishment of superior-subordinate relationship and provision of mechanism for coordination of various business activities. 3. Staffing: Staffing refers to manpower 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 also from time to time for replacement and also along with the expansion and diversification of business activities. Every business unit needs efficient, stable and cooperative staff for the management of business activities. Manpower is the most important asset of a business unit. In many organisations, manpower planning and development activities are entrusted to personnel manager or HRD manager. 'Right man for the right job' is the basic principle in staffing. 4. 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 subordinates. Clear plans and sound organisation set the 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 subordinates. It also involves communicating, leading and motivating. Leadership is essential on the part of managers for achieving organisational objectives. 5. Coordinating: Effective coordination and also integration of activities of different departments are essential for orderly working of an Organisation. This suggests the importance of coordinating as management function. A manager must coordinate the work for which he is accountable. Co-ordination is rightly treated as the essence of management. It may be treated as an independent function or as a part of organisms function. Coordination is essential at all levels of management. It gives one clear-cut direction to the activities of individuals and departments. It also avoids misdirection and wastages and brings unity of action in the Organisation. Co-ordination will not come automatically or on its own Special efforts are necessary on the part of managers for achieving such coordination. 6. Controlling: Controlling is an important function of management. It is necessary in the case of individuals and departments so as to avoid wrong actions and activities. Controlling involves three broad aspects: (a) establishing standards of performance, (b) measuring work in progress and interpreting results achieved, and (c) taking corrective actions, if required. Business plans do not give positive results 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 be only an academic exercise Controlling is a continuous activity of a supervisory nature. 7. Motivating: Motivating is one managerial function in which a manager motivates his men to give their best to the Organisation. It means to encourage people to take more interest and initiative in the work assigned. Organisations prosper when the employees are motivated through special efforts including provision of facilities and incentives. Motivation is actually inspiring and encouraging people to work more and contribute more to achieve organisational objectives. It is a psychological process of great significance. 8. Communicating: Communication (written or oral) is necessary for the exchange of facts, opinions, ideas and information between individuals and departments. In an organisation, communication is useful for giving information, guidance and instructions. Managers should be good communicators. They have to use major portion of their time on communication in order to direct, motivate and co-ordinate activities of their subordinates. People think and act collectively through communication. According to Louis Allen, "Communication involves a systematic and continuing process of telling, listening and understanding".

Importance of Management
1. Optimum utilisation of resources: Management facilitates optimum utilisation of available human and physical resources, which leads to progress and prosperity of a business enterprise. Even wastages of all types are eliminated or minimized. 2. Competitive strength: Management develops competitive strength in an enterprise. This enables an enterprise to develop and expand its assets and profits. 3. Cordial industrial relation: Management develops cordial industrial relations, ensures better life and welfare to employees and raises their morale through suitable incentives. 4. Motivation of employees: It motivates employees to take more interest and initiatives in the work assigned and contribute for raising productivity and profitability of the enterprise. 5. Introduction of new techniques: Management facilitates the introduction of new machines and new methods in the conduct of business activities. It also brings useful technological developments and innovations in the management of business activities.

6. Effective management: Society gets the benefits of efficient management in terms of industrial development, justice to different social groups, consumer satisfaction and welfare and proper discharge of social responsibilities. 7. Expansion of business: Expansion, growth and diversification of a business unit are possible through efficient management. 8. Brings stability and prosperity: Efficient management brings success, stability and prosperity to a business enterprise through cooperation among employees. 9. Develops team spirit: Management develops team spirit and raises overall efficiency of a business enterprise. 10.Ensures effective use of managers: Management ensures effective use of managers so that the benefits of their experience, skills and maturity are available to the enterprise. 11.Ensures smooth functioning: Management ensures smooth, orderly and continues functioning of an enterprise over a long period. It also raises the efficiency, productivity and profitability of an enterprise. 12.Reduces turnover and absenteeism: Efficient management reduces labour turnover and absenteeism and ensures continuity in the business activities and operations. 13.Creates sound organisation: A dynamic and progressive management guarantees development of sound Organisation, which can face any situation - favorable or unfavorable with ease and confidence.

The very survival of an enterprise depends on its management. Ineffective management leads to disastrous consequences. According to George Terry, "Ineffective management cuts at the very roots of economy of an enterprises. This suggests the importance of efficient management. In brief, management occupies a unique position in the functioning of business enterprises. Its importance and positive role is accepted in all sector-private, public, joint and co-operative. Management is like a human brain. It is an integral aspect of business itself. The importance of management is not fully realised in many developing countries. The economic progress of western countries is not merely due to abundant material resources but because they are efficiently managed and utilised. In other countries, resources are not utilised fully and properly due to lack of managerial skills. This suggests that management is a key factor in the working of business enterprises. There is no substitute to efficient management. An inefficiently managed business enterprise has no place in the present complex and competitive business world groups.

Management in the Future

In the next couple of decades, management theory and practice is bound to change in order to meet the complex and ever changing environmental variables. The phenomenal growth in multinational and transnational operations, fast changing technology, increasing complexity of decision making, dynamic social and economic environment, globalisation of business and elastic project organisations and task groups will significantly influence the future managerial world and managerial tasks. There are successful business and management leaders publishing their memories and offering their experience to the world. There is great increase in the number of business schools. Management education is bank ably providing expertise to nonage the business and this trend is likely to continue. Career paths are likely to be based on expertise alone. Managers will be under pressure to develop this expertise and apply it in an ever-widening range of situations rather than their ability to survive the bureaucratic jungle. They will have to combine their personal, professional and operational qualities and capacities to the satisfaction of employers and the society. The future must be considered as an opportunity and not a problem. The future business environment will he dominated by information technology (IT), globalisation, material and energy shortages, problems of pollution and ecological balance, consumerism, inflation and R & D. The costs of employing expert managers are regarded as an investment for effective business performance. Management is a designated expertise, increasingly professionalized and is likely to progress to a highly organised status. It is assumed that young people will choose management as an occupation and will progress from lower to middle and from middle to top management positions. An ever-greater range of knowledge is available to all aspects of business and management. Some forces/factors that are likely to have an impact upon management in future are as mentioned below:1. Emergence of knowledge society. 2. Development of socially concerned Humanistic society. 3. Widespread application of information technology (IT) 4. Transition from industrial to service economy. 5. Growing use of innovations and R & D. 6. Social accountability of business. 7. Satisfaction of human and social values in man-machine system. 8. Liberalization and Globalisation of the business.

Development of Management Thought

Management thought has a long history. It is as old as human civilization itself. Management in one form or the other has been a significant feature of economic life of mankind throughout ages.

Management thought is an evolutionary concept It has develop along with and in line with the growth of social, political, economic and scientific institutions. Management thought has its origin in the ancient times. It developed gradually along with other socioeconomic developments. The contributors to management though are many. They include Management philosophers, management practitioners and scholars. Modem management is based on the solid foundations laid down by management thinkers from the early historical period.

Historical Background of Management

The recorded use of organised management dates back to 5000 B.C. when the agricultural revolution had taken place. These agricultural civilizations existed in India, China and Egypt According to Peter Drucker these irrigation civilizations "were not only one of the great ages of technology, but it represented also mankinds most productive age of social and political innovation". As the villages grew and civilizations evolved, the managers too grew and evolved. They became the priests, the kings, the ministers holding power and wealth in the society. Written documents found in the Sumerian civilization which 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, organising 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, organising, 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 in 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 Sangha in 530 B. C., provide evidence about the use of the principles of management. During the 13th and 14th centuries AD the large trading houses of Italy needed a means of keeping records of their business transactions. To satisfy their needs Luca Pacioli 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 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 in regard to 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.

Evolution of Management Thought

This evolution of management thought can be studied in the following flum broad stages:

A. The Classical Theory of Management (Classical Approach): It includes the following three streams of thought: (i) Bureaucracy, (ii) Scientific Management; and (iii) Administrative Management B. The Neo-classical theory of Management: It includes the following two streams: (i) Human Relations Approach and (ii) Behavioral Sciences Approach. C. 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.

a. Classical School/thought: 1900 to 1930. b. Neo-classical School/thought: 1930 to 1960. c. 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.

Contribution of F. W. Taylor to Management Thought

F.W. Taylor is one of the founders (the other two are Max Weber and Henry 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.

Principles of Scientific Management

According to Taylor, scientific management in its essence consists of a philosophy which 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, Froth, 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.

1. 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 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. 2. Scientific selection of workers and their development through proper training. 3. Scientific approach by management. The management has to develop a true science in all fields of work activity through scientific investigation and experiments. 4. Close co-operation of managers and workers (labour management relations) for better results and understandings. 5. Elimination of conflict between methods and men. The workers are likely to resist to new methods. This can be avoided by providing them an opportunity to earn more wages.

Features of Scientific Management

1. Scientific task setting: F. W. Taylor suggested the introduction of standard task which 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 ratesetting 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. 2. Planning the task: For performing the task by every worker, Taylor suggested the need of 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. 3. 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 so as 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 so as 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. 4. 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. 5. Specialization: Taylor suggested specialization in the administrative and organizational setup of the plant He suggested functional foremanship. Taylor recommended eight functional foremen for different activities and functions. The foremen suggested by him are like route clerk, instruction card clerk, speed boss etc. Such specialization is useful for raising efficiency of the whole organisation. 6. 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 also in practice For this, Mental revolution on their part is essential The success of scientific management rests basically 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

1. Application and use of scientific methods. 2. Wide scope for specialization and accurate planning. 3. Minimum wastages of materials, time and money. 4. Cordial relations between workers and management. 5. Benefits to workers (higher wages and less burden of work), management (cost reduction, better quality productions) and consumers (superior goods at lower prices)

Scientific management not only developed a rational approach to solving organisational problems but also contributed a great deal to the professionalisation of management. Time and motion studies, scientific selection of workers, work design and one best way to doing a job are some new ideals suggested by Taylor and are responsible for the introduction of Many positive changes in the field of industrial/ production management.

F. W. Taylors Contribution to the Development of Management Thought / Science

The contribution of F. W. Taylor to management thought is as explained below:

1. Emphasis on rational thinking: Taylor suggested rational thinking on the part of management for raising efficiency and productivity. He wanted managements to replace old methods and techniques by Modern methods which will raise productivity and offer benefits to all concerned parties. He was in favour of progressive, scientific and rational thinking on the part of management on all managerial problems. Such progressive outlook is essential for the introduction of new techniques and methods in the Management. 2. Introduction of better methods and techniques of production: F. W. Taylor suggested the importance of improved methods and techniques of production. Work-study techniques are his contribution to management thought. He suggested new methods after systematic study and research. Taylor recommended the use of new methods for raising overall efficiency and productivity. 3. Emphasis on planning and control of production: Taylor suggested the importance of production planning and control for high production, superior

quality production and also for low cost production. He introduced the concept of production management in a systematic way. 4. Importance of personnel and personnel department: Taylor suggested the importance of manpower in management. He was in favour of progressive personnel policies for the creation of efficient and satisfied labour force. He suggested the need of personnel department and its importance. He favored incentive wage payment to workers. 5. 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 through the use of scientific methods. 6. Time and motion study: Taylor introduced new concepts like time study, motion study and work study in the field of industrial management such concepts are for the introduction of new methods which 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 greatest efficiency and prosperity".

F.W. Taylor a rightly treated as father of scientific management. In fact, through his concept of scientific management, Taylor actually developed a new science of management which is applicable not only to management of industrial units but also to the management of all other business units. He suggested certain techniques which can be applied purposefully to all aspects of management of business activities. This is treated as Taylors 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 revolutionalising 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 also by theorists. They oppose Taylor's scientific management on different grounds. The points of criticism we as explained below:

Criticism from Employers

1. Huge investment required: Heavy investment is necessary for reorganization of preliminary standardization of tools, machines and equipment and conduct 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. 2. Sudden change may disturb existing working arrangements: Sudden change due to the introduction of scientific management may paralyze the existing arrangement of work and will bring the entire Organisation in difficulties. There will be loss due to reorganization, if scientific management is to be introduced. 3. 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. 4. Benefits after a long period: The benefit 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. 5. Huge overhead expenses required: Introduction of scientific management involves huge overhead expenses which may erode profitability.

Criticism from Workers and Trade Unions. Why did Trade Unions Oppose Scientific Management?
1. Heavy burden on workers: Workers feel that they will have to share more burden of work as a result of introduction of scientific management. They also fear that the benefits will he shared by the employer alone and that they will be at a loss from all sides. Workers and their unions feel that it will lead to their exploitation and they oppose scientific management on this ground. 2. Reduces initiative among workers: Workers and trade unions argue that scientific management will destroy their initiative and they will be converted into 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. 3. 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. 4. 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. 5. Possible adverse effects on workers unity: Trade unions also oppose 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 counterarguments to every point of criticism noted by them. For 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 Henry Fayol to Management Thought

Henry Fayol (1841-1925) is rightly treated as 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 Henry Fayol. After obtaining an engineering degree, Henry 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, Henry Fayol came to be recognised as the founder of modern management theory. His analysis of management process acts as the foundation of the whole management theory and the present super-structure of management has been built on it.

Henry 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 organisations. Each principle suggested by him has specific meaning and significance. According to him, managers in all organisations 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 also result-oriented. In fact, these principles are the outcome of his long experience as a practicing manager. These basic principals are useful for effective management of business activities. They are related to the basic components of 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 enterprises but also in other organisations such as colleges, hospitals, charitable institutions and government departments. Due to his contribution to management theory and principles, Henry Fayol is rightly treated as the Father of Modern Management Thought. Fayol is the first management thinker who provided the conceptual framework of the functions of management in his book General and Industrial Management. The functions of management according to Fayol are,

1. Planning 2. Organising 3. Staffing 4. Commanding 5. Coordinating 6. Controlling

The fourteen principles of management suggested by him are related these 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 Henry Fayol, managers should be flexible in the application of these principles. The fourteen principles of management suggested by him are related these 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 Henry Fayol, managers should be flexible in the application of these principles. Fayol divided general and industrial management into following six groups:-

a. Technical activities (production, manufacture, adaptation). b. Commercial activities (buying, selling and exchange). c. Financial activities (search for and optimum use of capital). d. Security activities (protection of property and persons). e. Accounting activities (stock taking, balance sheet, cost, and statistics). f. Managerial activities (planning, organising, command, coordination and control).

Henry Fayol also suggested 14 principles of management. These principles are:-

1. Division of work, 2. Authority and responsibility, 3. Discipline, 4. Unity of command, 5. Unity of direction, 6. Subordination of personal interest to organizational interests, 7. Remuneration, 8. Centralization, 9. Scalar chain, 10.Order, 11.Equity, 12.Stability of tenure, 13.Span of co-operation and 14.Initiative

Henry Fayols contribution to management theory is certainly remarkable. He gave overall concepts of general management and suggested the basic functions of management. He recommended the selection and training of workers and managers. He also advocated the use of organisation charts. He suggested certain qualities of managers winch include physical, mental, moral, educational technical and experience. Fayols theory of management was the first

complete theory of management as we understand today. It incorporated proven principles, elements, procedures and techniques based on his practical experience.

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 also treated as human relations approach to management. It was Mayo who 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 associates came to the following conclusions from their famous Hawthorne experiments:

1. The amount of work to be done by a worker is not determined by his physical capacity but by the social norms. 2. Non-economic rewards play a significant role in influencing the behavior of the workers. 3. Generally the workers de not reacts as individuals, but as members of group. 4. Informal leaders 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 rest pauses or changing working hours but a combination thease 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 the efforts of Mayo and his associates, the managers in different organisations recognize that workers' performance is related to psychological, sociological and physical factors. Thus, Hawthorne Study was an important landmark to study the behavior of worker and his relationship to the job, his fellow workers and the organisation. It proved that informal work groups and the opportunity to be heard and participate in decisionmaking have an important impact on the productivity of the workers.

Mayo is one leading management thinker and also a leading advocate of neo-classical theory. 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 as the Hawthorne Studies. They were conducted in the Hawthorne plant of Western Electric Company in the USA between 1927 and 1932. It is said that 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 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 Studies we as noted below:

1. Employee's behavior is influenced by mental attitudes and emotions including prejudices. 2. The workers in a group develop a common psychological bond uniting them as a group in the form of informal organisation. 3. In managing and motivating employee groups, human and social motivation plays greater role then financial incentives. 4. Management must understand that a typical group behavior can dominate or even supersede individual propensities and preferences. 5. 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 organisation 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 organisation, 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 quality and quantity of the work produced.

Mayo developed his Human Relations Theory of Management on his Hawthorne experiments. He introduced human relations approach to management and is rightly considered as one of the pioneers of the Human Relations Theory of Management.

Features of Human Relations Approach

1. A business organisation is not merely a techno-economic system but also a social system and involves human element. 2. An individual employee is motivated not merely by economic incentives but also by non economic incentives, psychological and social interests, needs and aspirations. 3. The informal groups in the organisation are more important than individuals and play an important role in raising productivity. 4. In place of task-centered leadership, the employee-centered, humanistic, democratic and participative style of leadership should be introduced as it is more effective / productive. 5. Employees are not necessarily inefficient or negative in their approach. They are capable of self-direction and control. 6. Employees performance can be raised by meeting their social and psychological needs. Cordial atmosphere at work place is also useful for raising productivity. 7. Management needs social skills along with technical skills in order to create a feeling (among the employees) that they are a part and parcel of the organisation and not outsiders. 8. 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 decision-making. 9. The management has to secure willing cooperation of employees. The objective before the management should be to secure cooperative effort of its employees. For this, employees should be made happy and satisfied.

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 recognised but were unique when suggested by 1930. Human relations approach is a progressive development as compared to classical approach. 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

1. Too much importance to employees, and social needs: Human relations approach to management has given too 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 organisation and so on. 2. Employee-oriented approach to a limited extent: It is argued that human relations approach is apparently employee-oriented but in reality it is organisation-oriented. 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 sense of happiness. In brief, the human relations approach is employeeoriented but only to a limited extent. 3. 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, as a result of better working conditions and the human relations skills of managers did not result in productivity improvement as expected. Thus, workers satisfaction is one but not the only factor which raises industrial productivity. 4. Limited importance to economic incentives: The human relations approach has given limited importance to economic incentives in motivating employees. They prefer informal groups and cordial relations among them. However, their interest and loyalty to the organisation 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 of 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 thought suggested rationalizing work for greater labour productivity while Elton Mayo recommended/ advocated humanism work for enhanced efficiency and personal satisfaction. The basic 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 employee 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 organisation climate for achieving organizational goals. Taylor's approach is comparatively old and was popular in the early decades of 19th century the human relations approach (suggested by Elton Mayo) is comparatively new and got popularity by 1930s.

Systems Approach to Management Thought

Contributions to management thought/theory after 1960s 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. Systems Approach to Management, and c. Contingency Approach to Management.

Systems Management School

A system is an organised entity i.e. a company or a business enterprise made up of parts connected and directed to some purpose. Each system has an input, a process and an output. It acts as a self sufficient unit. Every system is interlinked with its subsystems. Any organisation is looked upon as an artificial system, the internal parts of which work together to achieve established goals and the external parts to achieve interplay with the environment including customers, the general public, suppliers and government. The manager integrates available facilities to achieve a goal by means of systems that relate activities required for the end result. The system serves as the media 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 systems established. A system is a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. Almost anything can be viewed as a system. As per systems management school, an organisation is looked upon as an artificial system. Its internal parts work together to achieve established goals and the external parts to achieve interplay with the environment including customers, the general public, suppliers and government. The manager integrates available facilities to achieve a goal by means of systems that relate activities required for the end result. In this way, the systems management school helps in achieving the established goals of the organisation. It is possible to establish such systems management organisation in a business enterprise. For this 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 of systems management Data processing work will become easy and quick. Systems management enables a manager to work more efficiently because of easy availability of information in different aspects of business.

Features Of Systems Approach to Management

1. Open or Closed Systems: Systems may be either open or dosed. An open system is one that is dependent on the outside environment for survival e.g., human body as a system is composed of many subsystems. This is an open system and it must depend on outside input and energy for survival. A system is considered closed if it does not interact with the environment. Physical and mechanical Systems are closed system because they are insulted from their external environment. Traditional organisation theorists regarded organisations as closed systems while according to the modern view organizations are open systems, always interacting with the environment. 2. Interdependent parts: A system is a set of interdependent parts which together form a unitary whole that perform some function. An organisation is also a system which consists of four interdependent parts viz., task, structure, people and technology. 3. Consideration of whole system: No part of the system can be precisely analyzed and under-stood apart from the whole system. Conversely, the whole system cannot be exactly evaluated without understanding all its parts. Each part is related to every other part. It means rather than dealing separately with the various parts of one organisation, the systems approach attempts to give the manager a way of looking at the organisation as a whole. For example, in order to understand the operations of the finance or production or marketing departments, he must understand the company as a whole. It is because activity of any one part of the company affects the activity of every other part.

4. 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. 5. Defined boundaries: Each system including an organisation has its own boundaries which 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 organisation, it has many boundary contacts or 'interfaces' with many external system like creditors, suppliers, customers, government agencies etc. The system is inside the boundary, the environment is outside the boundary'. 6. Synergy: Output of a system is always more than the combined output of its parts. This is called 'synergy. In organizational terms, synergy means when separate departments within an organisation cooperate and interact, they become more productive than if they had acted in isolation e.g., it is certainly more efficient for each department to deal with one secretarial department than for each department to have a separate secretarial department of its own. 7. Feedback mechanism: A system can adopt and adjust itself to the changing environment through the feedback mechanism. As operations of the system proceed information in feedback to the appropriate people. This helps to assess the work and if need be, to get it corrected. 8. Multidisciplinary approach: Systems approach integrates and uses with profit ideas emerging from different schools of thought. Management freely draws concepts and techniques from many fields of study such as psychology, sociology, ecology, economics, mathematics, statistics, operations research, systems 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 a systems phraseology. A system means to bring together or to combine. When viewed from the systems angle, the organisation 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 organisation which is not adaptive and responsive to its environment will not survive or grow. An organisation will have individuals, groups, formal structures, goals and resources. A manager has to see that all these parts work in co-ordination in order to achieve organizational goals. Absence of co-ordination will hamper the performance of the organisation. The systems approach suggests that the total performance of the organisation 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 organisation will be jeopardized. The managers, as decision-making entities, have to regulate the sub-systems of the Organisation. They should not work in isolation but operate in co-ordination with others. This will avoid shortfalls in different components and bring success to the organisation. The emphasis of systems approach is on interrelatedness of the parts of an organisation. The introduction of integrated approach is treated as major contribution of systems theory. The systems 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. The systems theory considers organisation as an open, adaptive system which has to adjust changes in its environment. It defines organisation as a structured process in which individuals interact for attaining objectives.

Merits Of Systems Approach

Systems approach to management is comparatively new to the management thought. This approach represents a refreshingly new thinking on organisation 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 organisations. Systems approach provides clues to the complex behavior of organisation. The systems theory suggests to practicing manager to study/analyze a particular element by taking into consideration its interacting consequences with other elements. A variety of systems concepts and perspectives have been 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 organisation as an open system. The Organisation exhibits a 'holistic' character.

Limitations Of Systems Approach

1. The systems approach is criticized on the ground that it is too abstract and vague. It is difficult to apply it to practical problems directly and easily.

2. The systems theory/approach fails to provide specific tools and techniques for the practicing executives/managers. 3. The systems approach does not recognize differences in systems. It fails to clearly identify the nature of interactions and interdependencies between an Organisation and its external environment it also fails to offer a unified body of knowledge.

Contingency Management School / Contingency Approach to Management / Situational Approach

A common deficiency of the classical, behavioral and quantitative schools is that they have stress one aspect of the organisation at the cost of others. The classical approach emphasizes on 'task' 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 or tools will best do the job. The systems approach as well as contingency approach provide one integrated approach to management problems. The contingency/situational approach is the second approach (the first being the systems approach) whichattempts 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 organisations have to deal with different situations in different ways. There is no single best way of managing applicable to all situations. In order to be effective, the internal functioning of the organisation must be consistent with the needs and demands of the external environment. In other words internal organisation should have the capacity to face any type of external situation with confidence.

Features of the Contingency / Situational Approach

1. Management is entirely situational. The management has to use the measures/techniques as per the situation from time to time. 2. Management should match its approach as per the requirements of the situation. The policies and practices used should be suitable to environmental changes. 3. The success of management depends on its ability to cope up with its environment. Naturally, it has to make special efforts to anticipate and comprehend the possible environmental changes. Managers should realize

that there is no one best way to manage. They have to use management techniques as per the situation which they face.

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 also in deciding motivational and leadership approaches. In brief, the contingency approach is applicable to different areas of organisation and management it is an attempt to integrate various viewpoints and to synthesize 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

1. Contingency approach is pragmatic and open minded It discounts preconceived notions, and universal validity of principles. 2. Theory relieves 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. 3. The contingency approach has a wide-ranging applicability and practical utility in, organisation and management. It advocates comparative analysis of organisations to bring suitable adjustment between organisation structure and situational peculiarities. 4. The contingency approach focuses attention on situational factors that affect the management strategy. The theory combines the mechanistic and humanistic approaches to fit particular/specific situation. It is superior to systems theory as it not only examines the relationships between subsystems of an organisation but also the relationship between the organisation and its external environment.

Limitations of Contingency Approach

1. It is argued that the contingency approach lacks a theoretical base. 2. Under contingency approach, a manager is supposed to think through all possible alternatives as he has no dried principles to act upon. This brings the need of more qualities and skills on the part of managers. The responsibility of a manager increases 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 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 organisation 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 organisation objectives under particular situation/ circumstances and act accordingly. This is the practical aspect of contingency approach. What constitutes best/effective management varies with the organisations internal and external environment and the make-up of the organizational sub-systems. The best management pattern depends on a number of interrelated internal and external variable factors around the specific organisation/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 Koontz has termed "management theory jungle". Contingency approach is practical progressive and action oriented. It considers each organisation 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 not rejected in the, contingency approach. However, they are viewed as incomplete, vague and unsuitable to all organisations and situations.

Question Bank
1. Discuss the functions and nature of management. 2. Explain the nature of management process. Why management process is called social and consequential process? 3. What are the principles and features of scientific management of Taylor? Why did trade unions oppose scientific management? 4. Discuss contributions of Elton Mayo to the development of management thought? 5. Discuss features of systems approach to management. 6. What is management? Explain the characteristics of management. 7. Explain the importance of management in the present day business world.

Introduction To Human Resource Management

Every business unit needs human resource (manpower) for the conduct of different business activities. In fact, no organisation can exist or operate efficiently without the support of human resource. Such human resource includes top level managers, executives, supervisors and other subordinate / lower level staff / employees. A business organisation has to estimate its future manpower needs and adjust its manpower planning and development programmes accordingly. This is called 'staffing' function of management. Human resource management is also described as personnel management or manpower management.

According to Edwin Flippo, "Personnel Management is the planning, organising, directing and controlling of the procurement, development, compensation, integration and maintenance of people for the purpose of contributing to organizational, individual and social goals". Various areas such as recruitment and selection, wage payment and industrial relations are covered under human resource management.

Meaning of Human Resource

In an industrial unit, large number of persons are employed in order to conduct various operations and activities. This is treated as human resource or manpower employed. A business unit needs material resources as well as human resource for the conduct of various activities. Of all the "M"s in management (such as Materials, Machines, Methods and Money) the most important "M" stands for Men i.e., manpower working in the organisation. It is through manpower/employees that all other ingredients of an enterprise-money, machines, materials, marketing, etc., are managed. In brief, Human Resource (HR) constitutes the most important and the most productive resource of an industrial / business unit. It is rightly said that "machines are important in the production process but the man behind the machines is more important". He transforms the lifeless factors of production into useful products. Human resource (HR) is an important asset of a business unit. Well-trained, loyal and efficient team of workers brings success and stability to a business unit. This suggests the importance of human resource in business. People and the organisation in which they work are inter-related and interdependent. organisation moves towards prosperity only by using its available human resource purposefully. Similarly, employees get various monetary and other benefits through the prosperity of their organisation.

What is Human Resource Development? HRD

Human Resource Development (HRD) means to develop available manpower through suitable methods such as training, promotions, transfers and opportunities for career development. HRD programmes create a team of well-trained, efficient and capable managers and subordinates. Such team constitutes an important asset of an enterprise. One organisation is different from another mainly because of the people (employees) working therein. According to Peter F. Druker, "the prosperity, if not the survival of any business depends on the performance of its managers of tomorrow." The human resource should be nurtured and used for the benefit of the organisation.

Importance of Human Resource in Management

Human resource is most important resource in management and needs to be used efficiently. This is because success, stability and growth of an organisation depend on its ability in acquiring, utilizing and developing the human resources for the benefit of the organisation. In the final analysis, it is the people (i.e employees) who produce promising results and generate a climate conductive to the growth and development of an organisation. HR is a highly productive corporate asset and the overall performance of companies and corporations depends upon the extent to which it is effectively developed and utilised. It is the most delicate factor of production and need not be treated merely as a commodity to be bought and used in factories. According to Peter Drucker, "The function of management is to manage managers, workers and work". The importance of manpower in business management is now universally accepted. Employees have a capacity to grow and develop, if suitable opportunities are offered. They give positive response to monetary and non-monetary incentives, training opportunities, favorable work environment and motivation. According to Pigors and Myers, "Good management means getting effective results with people". This suggests the importance of human resource. Human resource is certainly important even in this age of extensive use of computer technology. This is because machine cannot be used as a substitute for human brain which has capacity to think, assess and react. It is correct to say that man is a power rather than man has a power. Progressive / professional managements invest huge funds on training and development of human resource and this suggests the importance of human resource and its contribution in industrial and economic development. Professionally managed companies in India such as Larsen and Toubro Ltd, TELCO, Reliance, etc., give special importance and good attention to HRD. The following remark of Shri Dhirubhai Ambani, former chairman of Reliance Industries Ltd. (made in the 21st AGM held on 3/8/95), is worth noting in this regard. "Our People : People are assets you can never show on a balance sheet. Our company has a human resource asset of around 12,500 people; 3,000 of which constitute scientific and technical manpower. Every year we add over 450 young professionals. These motivated and well-trained people are the backbone of our business. The team is young in spirit, conscious of its responsibilities and committed to building world class assets for the country".

Definitions of Human Resource Planning - HRP

1. Colemn has defined human resource planning as "the process of determining manpower requirements and the means for meeting those requirements in order to carry an integrated plan at the organisation". 2. Stainer defines manpower planning as "strategy for the acquisition, utilisation, improvement and preservation of an enterprise's human resources. It relates to establishing job specifications or the quantitative

requirements of jobs determining the number of personnel required and developing resources of manpower".

Objectives of Manpower / HR Planning

1. To ensure optimum utilisation of human resources currently employed in the Organisation. 2. To determine the future manpower requirements of the Organisation as per the need for renovations, modernisation, expansion and growth programmes. 3. To determine the recruitment level. 4. To ensure that necessary human resources are available as and when required. 5. To assess future accommodation requirements. 6. To design the basis for management development programmes so as to develop the required talents among the employees selected.

Advantages / Importance of HRP

1. Meeting manpower needs : Every Organisation needs adequate and properly qualified staff for the conduct of regular business activities. Imaginative HRP is needed in order to meet the growing and changing human resource needs of an organisation. 2. Replacement of manpower : The existing manpower in an Organisation is affected due to various reasons such as retirement and removal of employees and labour turnover. HRP is needed to estimate the shortfall in the manpower requirement and also for making suitable arrangements for the recruitment and appointment of new staff. 3. Meeting growing manpower needs : The expansion or modernisation programme may be undertaken by the enterprise. Manpower planning is needed in order to forecast and meet additional manpower requirement due to expansion and growth needs through recruitment and suitable training programmes. 4. Meeting challenges of technological environment : HRP is helpful in effective use of technological progress. To meet the challenge of new technology existing employees need to be retrained and new employees may be recruited. 5. Coping with change : HRP enables an enterprise to cope with changes in competitive forces, markets, products, and technology and government regulations. Such changes generate changes in job content, skill, number and type of personals. 6. Increasing investment in HR : An employee who picks up skills and abilities becomes a valuable resource because an organisation makes investments in its manpower either through direct training or job assignments.

7. Adjusting manpower requirements : A situation may develop in; an organisation when there will be surplus staff in one department and shortage of staff in some other department. Transfers and promotions are made for meeting such situations. 8. Recruitment and selection of employees : HRP suggests the type of manpower required in an organisation with necessary details. This facilitates recruitment and selection of suitable personnel for jobs in the Organisation. Introduction of appropriate selection tests and procedures is also possible as per the manpower requirements. 9. Placement of manpower : HRP is needed as it facilitates placement of newly selected persons in different departments as per the qualifications and also as per the need of different departments. Surplus or shortage of manpower is avoided and this ensures optimum utilisation of available manpower. 10.Training of manpower : HRP is helpful in selection and training activities. It ensures that adequate number of persons are trained to fill up the future vacancies in the Organisation.

Meaning of Personnel Management

Personnel refer to the employees working in an organisation. They represent the manpower which is an important asset of a business unit. Employees are the real supporters of a business unit and they contribute substantially for the stability and prosperity of a business unit. Employees have various problems relating to wage payment, promotions, transfers, working conditions, welfare facilities, training and so on. All such problems are treated as personnel problems. These problems come within the scope of personnel management which is one important area of total business management. Naturally, a separate department called 'Personnel Department' is created in every organisation. It looks after the personnel problems. The manager in charge of this department is called personnel manager. He has to perform various functions which are responsible in nature and also delicate. He needs tact and imagination while dealing with personnel problems. He also needs active support of the top management for dealing with personnel problems effectively. A personnel manager must be a specialist in organisation theory. In addition, he should be an expert in the personnel administration with knowledge of relevant Labour laws, procedures and so on. A personnel manager needs sound academic qualifications, communication skill, broad social outlook, sympathy and consideration for employees. Knowledge of subjects like philosophy, logic, sociology and ethics is also useful while discharging his duties and responsibilities. He needs a keen sense of social justice and also rights and interest of men (employees) at work. A personnel manager also needs other qualities which are normally required by a successful manager. In short, personnel management deals with the people working in an organisation. It studies and solves their problems in order to create an efficient, loyal and co-operative labour force for the benefit of a business enterprise.

Personnel management deals with "personnel" of the organisation. It is concerned primarily with the manpower resource inputs.

Definitions of Personnel Management

1. According to Edwin Flippo, "Personnel management is the planning, organising, directing and controlling of the procurement, development, compensation, integration and maintenance of the people for the purpose of contributing to organizational, individual and social goals." 2. According to George R. Terry, "Personnel management is concerned with the obtaining and maintaining of a satisfactory and a satisfied, workforce." 3. According to British Institute of Personnel Management, in London, "Personnel management is that part of management which is concerned with the people at work and with their relationship within an enterprise."

Features of Personnel Management

1. Personnel management relates to managing people at work. It covers all levels of personnels and their needs, expectations and so on. In this sense, it is a comprehensive function and is basically concerned with managing people at work. 2. Personnel management is concerned with employees, both as individuals as well as a group. The aim of personnel management is to get better results (for the Organisation) through their involvement, motivation and cooperation. It is a people-oriented process of bringing people and organisations together so that the goals of each are met property. 3. Personnel management is concerned with helping the employees to learn and develop their potentialities to the highest level for their benefits as well as for the benefits of their Organisation. 4. Personnel management is inherent in all organisations as all organisations (including industrial and commercial) need manpower for the conduct of their activities. They are concerned with recruitment, selection, utilisation and development of manpower available. Personnel management is an integral aspect of total business management. 5. Personnel management is a continuous activity/function in an Organisation as personnel problems continue to exist as long as employees are working in an Organisation. They need constant attention as they may disturb normal working of an Organisation, if neglected. 6. Personnel management aims as securing willing co-operation of employees for achieving organizational objectives. This is natural as industrial and other activities can be conducted only with the support of human resources.

Objectives / Purposes of Personnel Management

1. To attain maximum individual development (self development) of the members of an Organisation and also to utilise available human resources fully and effectively. 2. To mould effectively the human resources. 3. To establish desirable working relationships between employer and employees and between groups of employees. 4. To ensure satisfaction to the workers so that they are freely ready to work. 5. To improve the service rendered by the enterprise to the society through better employee morale which leads to more efficient individual and group performance. 6. To establish and maintain a productive and self respecting relationship among the members of an Organisation. 7. To ensure the availability of a competent and willing workforce to the Organisation for its progress and prosperity. 8. To help Organisation to achieve its goals by providing well trained, efficient and property motivated employees. 9. To maintain high morale and good human relations within the Organisation for the benefit of employer and employees. 10.To secure the integration of all the individuals and groups with the Organisation by reconciling individual/group goals with those of an Organisation.

Functions of Personnel / HR Management

The functions of HRM are directly or indirectly related to the human resource available in the organisation. HR manager has to perform the basic functions of management in the area of HRM. These managerial functions include planning, organising, directing and controlling the manpower of his department. The operative functions of the HRM include procurement of manpower, development of manpower, and payment compensation to manpower and so on. In short, HRM involves the following functions and these functions are to be performed by the HRM department of the Organisation: Functions of Personnel / HR Management are :1. Procurement of manpower : Procurement means acquiring or resourcing the human resources or the manpower required by an Organisation from time-totime. Such procurement will be from the employment market. The basic principle in procurement is "right man for the right job". The procurement function includes manpower planning and forecasting, recruitment, selection,

appointment, placement and induction of employees so as to have a team of efficient and capable employees for the benefits of the Organisation. Even promotions and transfers are covered by this broad personnel function. At present, scientific methods are used for recruitment and selection of most suitable manpower for the benefit of the Organisation. 2. Training and Development of manpower : Development of manpower (human resource development) means planning and execution of the training programmes for all categories of employees in order to develop new skills and qualities required for working at the higher level. Manpower development is possible through training programmes and not simply by offering attractive wages to workers. Such manpower development (possible through systematic training programmes) is required for meeting the growing and changing needs of manpower along with the expansion and diversification of business activities. Executive development programmes are introduced for the benefit of higher level managers. Promotions and transfers are possible when manpower development programmes are introduced regularly. Similarly, future manpower requirement will be met properly through such manpower development programmes. This suggests the importance / significance of human resource development. It aims at educating and training employees for the improvement of overall performance of an Organisation. HRD programmes are for education, training and development of existing manpower in an Organisation. This is for facing new problems and challenges likely to develop in the near future. 3. Compensation payment and reward to manpower employed : One function of HRM department is to pay compensation (in monetary form) to employees for the services rendered. For this, a fair system of remuneration payment (wages and salaries) needs to be introduced. Remuneration to employees should be attractive so that the labour force will be satisfied and disputes, etc., will be minimized. Fair wage payment acts as a motivating factor. Along with compensation payment, HRM also deals with reward system. It is a type of appreciation of exceptional good work and offer some monetary or nonmonetary incentive to suitable employees. 4. Integration of interests of manpower and the Organisation : Manpower is interested in wage payment while Organisation is interested in higher profits, consumer loyalty market reputation and so on. Personnel management has to reconcile the interests of the individual members of the Organisation with those of the Organisation. This will ensure cordial industrial relations. Reconciliation of individual, social and organizational goals and interest is one challenge before HRM. 5. Maintenance of manpower : This HRM function relating to maintaining of satisfied manpower in the Organisation through the provision of welfare facilities. For this attention needs to be given to health and safety measures, maintenance of proper working conditions at the work place, provision of welfare facilities and other non-monetary benefits so as to create efficient and satisfied labour force with high morale. Even collective bargaining and workers participation come within this broad personnel function. Maintenance of stable manpower is difficult due to the availability of ample employment opportunities.

6. Provision of welfare facilities : Employees are offered various welfare facilities. They include medical, educational, recreation, housing, transport and so on. These facilities are given for raising their efficiency and also for making their life happy. Welfare facilities create efficient and satisfied Labour force. To introduce new labour welfare facilities and to maintain the existing facilities is one of the functions of HRM. 7. Miscellaneous functions : Misc. functions performed under personnel management are :i. ii. iii. iv. v. vi. vii. viii. ix. Maintenance of service records of employees, Promotions and transfers of employees, Maintaining cordial industrial relations, Introduction of rational grievance procedure, Performance evaluation of employees, Career planning of employees, Maintenance of discipline, administering the policies with regard to disciplinary action and compliance of various labour laws, Restructuring of the Organisation, Formulating HRM strategy, etc.

These HRM functions need to be performed regularly for the benefit of employees and also for continuity in the production activities of the Organisation. W.R. Spriegel has divided the functions of personnel management / HRM department into the following six broad categories :a. Employment b. Promotion, Transfer and Termination. c. Training. d. Wages and other incentives. e. Service activities (welfare activities). f. Collective bargaining and workers' participation.

As per Indian Institute of Personnel Management (IIMP now called NIPM), the Personnel / HRM functions are classified as noted below :i. ii. Improvement of industrial relations, Promotion of joint consultation,

iii. iv. v. vi.

Helping management to formulate a labour policy and improving communication between management and employees, Advising management on the fulfillment of statutory obligations relating to safety, health and welfare of the employees, Improving factory amenities and welfare provisions, and Advising the management on the training and future education of employees.

In the HRM department, various sections are created in order to give attention to various functions which are basically HRM functions. The functions (as noted above) are varied in character. These are functions of HRM and also the functions of personnel management. They are important and needs constant attention. Efficient, satisfied and co-operative labour force can be created by giving proper attention to various personnel functions.

Recruitment And Selection

Recruitment and selection constitute staffing function of management. Scientific selection ensures right man for the right job. For creating a team of efficient, capable and loyal employees, proper attention needs to be given to scientific selection of managers and other employees. The conventional approach of selecting managers in a casual manner is now treated as outdated and is being replaced by scientific and rational approach. The basic principle in selection is "right man for the right job" and can be achieved only through scientific recruitment and selection.

Meaning of Job Analysis

Job analysis is prior to recruitment. Job means a task or a specific activity to be performed in one or the other department of a production unit. Clear understanding of the job is called job analysis. It creates a proper background for recruitment and selection. Job analysis is the process of collecting all relevant information relating to the job. This information relates to the nature and features of a job and the qualities and qualifications required for performing the job efficiently. Job analysis provides basic information which facilitates scientific recruitment and selection. According to Edwin Flippo, "Job analysis is the process of studying and collecting information relating to the operations and responsibility of a specific job."

Benefits of Job Analysis

1. Facilitates proper publicity of jobs : Exact details of the job and the qualifications, qualities, etc., required can be notified in the advertisement because of job analysis. Scrutiny of applications and selection of suitable candidates is made manageable, easy and quick. 2. Facilitates appropriate selection of psychological tests : Psychological tests can be adjusted exactly as per the need of the job due to the availability of details from job analysis. 3. Facilitates purposeful interviews : Interviewers should be given the details of job analysis before interviewing the candidates. This makes the interviews relevant as the candidates are judged accurately in the light of details of job analysis. 4. Facilitates appropriate medical examination : Even the medical examination is adjusted as per the information available from job analysis. 5. Facilitates scientific selection and placement of candidates : Job analysis makes the selection work accurate. The tragedy of misfit is avoided. In addition, proper placement (as per qualifications and qualities) of employees is possible due to job analysis. 6. Facilitates scientific promotions and transfers : Promotions and transfers become easy, quick and accurate on the basis of data of job analysis. 7. Facilitates impartial performance appraisal : A company can make scientific and impartial performance appraisal of its employees with the help of job analysis data. 8. Useful for providing training : Job analysis suggests the qualities necessary for performing specific job. This information can be used in a purposeful manner while framing training programmes for jobs. 9. Useful for fixing wage structure : Job analysis indicates relative worth of each job within the Organisation. This information is useful for fixing wage rates for different categories of workers. 10.Facilitates redesigning of jobs : Job analysis gives the details of different jobs and facilitates redesigning of jobs so as to improve operational performance or to enrich job content and employee improvement.

Meaning of Recruitment

Recruitment means to estimate the available vacancies and to make suitable arrangements for their selection and appointment. In the recruitment process, the available vacancies are given wide publicity and suitable candidates are encouraged to submit applications so as to have a pool of eligible candidates for scientific selection.

In recruitment, information is collected from interested candidates. For this different sources of recruitment such as newspaper advertisement, employment exchanges, internal promotions, etc., are used. In the recruitment, a pool of eligible and interested candidates is created for the selection of most suitable candidates. Recruitment represents the first contact that a company makes with potential employees. Recruitment is a positive function in which publicity is given to the jobs available in the organisation and interested candidates (qualified job applicants) are encouraged to submit applications for the purpose of selection.

Definition of Recruitment

According to Edwin Flippo, "Recruitment is the process of searching for prospective employees and stimulating them to apply for jobs in the Organisation."

Need for Recruitment

The need for recruitment may be due to the following reasons / situations :a. Vacancies : due to promotions, transfers, retirement, termination, permanent disability, death and labour turnover. b. Creation of new vacancies : due to growth, expansion and diversification of business activities of an enterprise. In addition, new vacancies are possible due to job respecification.

Meaning of Selection

Selection is next to recruitment. It is the process of choosing the most suitable candidates (Properly qualified and competent) out of many interested candidates. It is a process of selecting the best and rejecting the rest. In this selection process, interested applicants are differentiated in order to identify those with a greater likelihood of success in a job. Such candidates are selected and appointed. Selection is a negative function as it relates to elimination of unsuitable candidates. 'Right man for the right job' is the basic principle in selection. Selection of suitable candidates is a responsible type of work as selection of unsuitable persons for jobs creates new problems before the business unit. For appropriate selection, scientific procedure needs to be followed.

Recruitment and selection are Supplementary Activities

In recruitment prospective employees are encouraged to apply for the jobs and in the selection; the most suitable candidates are selected out of the pool of applicants. The purpose of both is to have the most suitable and most capable candidates for the Organisation out of a pool of available and interested candidates. The recruitment process widens the scope for selection and provides wide choice for the selection of best candidates out of many interested. Recruitment and selection need lengthy and scientific procedure particularly in the case of managerial posts. Such lengthy procedure must be followed for scientific selection of employees.

Sources of Recruitment and selection are Supplementary Activities

Sources of recruitment are the outlets through which suitable candidates are available. The Following chart shows the sources of recruitment at supervisory and managerial levels.

Steps In The Scientific Selection Process

In the selection procedure, out of the available / interested candidates, the best one is selected through written test, psychological tests, personal interview and medical examination. Such lengthy procedure is followed in order to select the most suitable candidate. Selection process is a screening process. It is a type of hurdle race to the candidates. Final selection is possible only when the candidate completes this hurdle race successfully. Lengthy selection procedure is needed for scientific selection of candidates. Steps involved in the selection procedure are :-

1. Job Analysis : job analysis prepares proper background for recruitment and selection. It gives details of a job to be performed and the human qualities and qualifications required for performing that job efficiently. Scientific selection is possible only when it is made in the light of the details available from job analysis. Job means an activity performed in one or the other department of a business unit. A job includes various positions. Clear and detailed understanding of the job is called job analysis or job study. 2. Advertisement : This medium is widely used for recruitment of all categories of personnel. Though quite costly, it provides a wide choice as it attracts large number of candidates from all over the country. The qualities and qualifications expected from the candidates are usually mentioned in the advertisement. 3. Collection of Applications Blanks : In this step, applications with necessary details are collected from interested candidates. Some companies give advertisement in the press and ask interested candidates to submit applications on a prescribed form. 4. Scrutiny of Applications Received : After the last date fixed for the receipt of applications, officer from the personnel department starts the scrutiny of applications received. Incomplete applications are normally rejected. Applicants, who do not possess required qualifications, experience, etc., are also rejected. Along with this, the certificates, testimonials and references are checked. 5. Written Tests : After the scrutiny of applications, a final list of candidates for written tests is prepared. The purpose of such tests is to judge the knowledge of the candidate and also to find out his :a. Intelligence, b. Aptitude, c. Capacity, d. Interests and e. Suitability for a specific job. Trade test is particularly necessary in the case of technical jobs such as junior engineer, computer engineer and research assistant and so on. At present, such test is given in the case of all types of jobs. For example, written tests are used by Banks and public sector organisations for selection purpose. 6. It is also possible to reject candidates whose performance in such written tests is not up to the mark. Testing of candidates is a lengthy process particularly when the number of applicants is large. In such testing, the process of elimination can be introduced. For example, all candidates may be invited for the first test and' the candidates with poor performance in the first test need not be called for the second test.

7. Psychological Tests : The psychological tests given to candidates include the following tests :a. Intelligence test, b. Aptitude test, c. Interest test, d. Achievement test, e. Analytical test, f. Performance test, g. Synthetic test and h. Personality test. Each test needs to be given separately and each test is useful for judging specific quality of a candidate to be selected for the executive post. 8. Personal Interview : The candidates who have shown reasonably good performance in the written examination and psychological tests are called for personal interview. Interview technique is used extensively for the selection of managerial posts. This interview is conducted by one interviewer or by a group of interviewers including top officers of the company and other professional experts. The candidate is asked various questions about his qualifications, experience, family background and performance in the written test and psychological tests by the interviewers during the course of the interview. In this final interview, an attempt is made to judge overall personality of the candidate. The selection committee notes the plus and minus points of every candidate and selects the best candidates for appointment by applying certain uniform norms. Here, 'short-listing of candidates' is done for final selection as per the need of the organisation. The final selection depends partly on the performance of the candidate in the tests and also on the performance in the personal interview. 9. Reference Check : The candidate is required to give at least two references which may be :a. Educational, b. Social and c. Employment. These references help to cross check the information provided by the candidate. 10.Medical Examination : The purpose of medical examination is to judge the general health and physical fitness of the candidate. Candidates who are not physically fit for the specific job are rejected even when they show good

performance in the tests and personal interview. Medical test is taken in the case of all candidates before appointment. In case of certain jobs, the test is of a general nature. However, medical examination has special importance in armed forces. 11.Final Selection for Appointment : The selection procedure comes to an end when the final appointment letter is sent to the candidate with a request to join the organisation on a particular date. This means the 'job is offered to the selected candidate' and he is asked to join the organisation within a specific time limit.

Psychological Tests / Selection Tests

For scientific selection of candidates (particularly for higher level / executive level posts) different types of tests are given to candidates as per the requirements of the post for which selection is required to be made. Such tests include written test, trade test and psychological tests. The basic purpose is to judge the knowledge, skills, intelligence, aptitude, etc., of the candidate before his selection. It is also possible to reject the candidates who show poor performance in such tests. The possible performance of the candidate in the future can be judged with the help of such tests. Such tests need to be conducted in a systematic manner and not as a mere formality. The assistance of experts should be taken while conducting such tests. In addition, the results of such tests should be used while taking final decision regarding selection of the candidate. Such tests are particularly useful for the selection of supervisory staff in an Organisation.

Important Psychological Tests

1. Intelligence test : Intelligence test is useful for judging the intelligence of a candidate. According to the industrial psychologist, "General intelligence is the capacity of a person for comprehension and logical reasoning." Previously only the passing certificates of certain examinations were universally accepted as evidence of intelligence. After long experience, employees discovered that such certificates were not always very reliable as they indicate only paper qualifications. Fortunately for them, two French psychologists. Simon and Binet had developed in 1916 suitable Intelligence Tests to measure general intelligence. According to these tests, intelligence of a person or his intelligence quotient (I.Q.) can be measured by his performance in the test. 2. Vocational aptitude test : Vocational aptitude has been defined as "the capacity or latent ability of an individual to learn a job, given the necessary training." It has been claimed that vocational aptitude is as important and perhaps more important than general intelligence for success on a job. It is, therefore necessary to ascertain the vocational aptitude of a candidate before final selection. 3. Analytical test : For the purpose of analytical tests, a job is first analyzed in terms of such qualities as speed, dexterity, observation, etc. Terms are then

devised to measure the degree to which a candidate possesses these qualities. Dr. Munsterberg, an industrial psychologist in the US, had first devised such tests for the selection of telephone operators for the American Telephone and Telegraph Company. He had also devised similar tests for the selection of inspectors for inspection of ball bearings for an American bicycle manufacturer. These tests had produced satisfactory results. 4. Synthetic test : In case of jobs which are complex and so cannot be analyzed and for which analytical tests cannot be developed, synthetic tests have been evolved. The essence of these tests is that the candidate is presented a complex situation, more or less similar to the one which he will have to face in his job but on a miniature scale and he is asked to handle the situation. His performance in such a test indicates his aptitude for the job. Dr. Munsterberg had devised such a test for the selection of tram drivers for a Tram Company in the United States. Today, a similar test is being used for the selection of motor and truck drivers. 5. Trade test : Trade test is necessary and useful in the case of jobs which involve technical work. For example, a stenographer or a typist should be given suitable test in order to judge his ability to take dictation or type. Similar trade tests can be given to welders, machine operators and so on. Workers can be given such tests in order to find out their capacities for the type of job for which they are being considered. 6. Personality test : Personnel managers have come across many individuals with the necessary intelligence and the vocational aptitude, and yet did not prove successful in the jobs for which they are selected. Industrial psychologists felt that they might not have a suitable personality or temperament and began to develop tests to measure personality traits. Protective test is one such test. Its essential feature is that it induces a candidate to reveal his inner or real personality.

Advantages Of Psychological Tests In SP

Note:- Here, SP = Selection Procedure

1. Objective comparison of candidates possible. 2. Incompetent candidates are eliminated. 3. Suitable candidates are given proper placement. 4. Right man to the right job is achieved. 5. Achievements of the candidates are verified. 6. Compatibility of the candidate can be found out. 7. Mental qualities of candidates are evaluated. 8. Overall ability of the candidates is measured.

9. Application of knowledge is found out. 10.Accuracy in selecting employees.

Importance / Role of Personal Interview In SP

Interviewing is the most 'popular element in the selection procedure'. It plays a crucial role in the selection procedure. For majority of executive posts, it is supplemented by written and other tests. Personal interview offers many benefits to the company and also to the candidates.

Management Development Training and Methods Meaning of Employee Training

Training is next to selection. A worker selected / appointed in an Organisation needs proper training. This enables him to perform the job correctly and also with efficiency. Similarly, a manager needs training for promotion and for his self improvement. Employees are now given training immediately after appointment and thereafter from time to time. Training is used as a tool / technique for management/executive development. It is used for the development of human resource working in an Organisation. In fact, training is the watchword of present dynamic business world. Training means giving information, knowledge and education in order to develop technical skills, social skills and administrative skills among the employees. According to Edwin Flippo, training is "the act of increasing the knowledge and skill of an employee for doing a particular job." Training is necessary due to technological changes rapidly taking place in the industrial field. It is also essential along with the introduction of new techniques, new methods and so on. It is necessary for developing overall personality of employees and also for developing positive attitude towards fellow employees, job and Organisation where he is working. Training of employees is the responsibility of the management / employer. Expenditure on such training is an investment for manpower development and gives good dividend in the long run. Employees should take the benefit of training facilities provided for raising their efficiency and also for self-development. Training need not be treated as a punishment but an opportunity to learn, to grow and to develop for jobs at the higher levels.

Types of Training

Different types of training are :1. Induction training, 2. Job training, 3. Training for promotion, 4. Refresher training, 5. Training for managerial development, etc.

Induction training aims at introducing the organisation to a newly appointed employee. It is a short and informative training given immediately after joining the organisation. The purpose is to give "bird's eye-view" of the organisation to an employee. Job training relates to specific job and the purpose is to give suitable information and guidance to a worker so as to enable him to perform the job systematically, correctly, efficiently and finally with confidence. Training for promotion is given after the promotion but before joining the post at the higher level. The purpose is to enable an employee to adjust with the work assignment at the higher level. The purpose of refresher training is to update the professional skills, information and experience of persons occupying important executive positions. Training for managerial development is given to managers so as to raise their efficiency and thereby to enable them to accept higher positions. A company has to make provision for providing all types of training.

Objectives of Training
1. To raise efficiency and productivity of employees and the Organisation as a whole. 2. To create a pool of well-trained, capable and loyal employees at all levels and thereby to make arrangement to meet the future needs of an organisation. 3. To provide opportunities of growth and self-development to employees and thereby to motivate them for promotion and other monetary benefits. In addition, to give safety and security to the life and health of employees. 4. To avoid accidents and wastages of all kinds. In addition, to develop balanced, healthy and safety attitudes among the employees. 5. To meet the challenges posed by new developments in science and technology. 6. To improve the quality of production and thereby to create market demand and reputation in the business world.

7. To develop cordial labour management relations and thereby to improve the organisational environment. 8. To develop positive attitude and behavior pattern required by an employee to perform a job efficiently. In other words, to improve the culture of the Organisation. 9. To prevent manpower obsolescence in an organisation. 10.To develop certain personal qualities among employees which can serve as personal assets on long term basis.

Importance of Training (A) Benefits of Training To Employer / Management

1. Training raises the efficiency and productivity of managers. It also improves the performance of workers due to their motivation. 2. Training improves the quality of production. It also reduces the volume of spoiled work and wastages of all kinds. This reduces cost of production and improves quality. 3. It reduces accidents as trained employees work systematically and avoid mistakes in the work assigned. 4. Training reduces expenditure on supervision as trained employees take interest in the work and need limited supervision and control. 5. Training brings stability to labour force by reducing turnover of managerial personnel. 6. Training raises the morale of employees. 7. Training creates skilled and efficient manpower which is an asset of an industrial unit. 8. Training moulds attitudes of employees and develops cordial industrial relations. 9. Training reduces absenteeism as trained managers find their job interesting and prefer to remain present on all working days. 10.Training facilitates the introduction of new management techniques and also new production techniques including automation and computer technology. 11.Training creates a pool of trained and capable personnel from which replacements can be drawn to fill up the loss of key personnel due to retirement, etc.

12.Training provides proper guidance and instructions to newly appointed executives and assists them to adjust properly with the job and the organisation.

(B) Benefits of Training to Managers / Employees

1. Training creates a feeling of confidence among the employees. It gives personal safety and security to them at the work place. 2. Training develops skills which act as valuable personal assets of employees. 3. Training provides opportunity for quick promotion and self-development to managers. 4. Training provides attractive remuneration and other monetary benefits to employees. 5. Training develops adaptability among employees. It updates their knowledge and skills and keeps them fresh. It actually refreshes the mental outlook of employees. 6. Training develops positive attitude towards work assigned and thereby creates interest and attraction for the job and the work place. 7. Training creates an attitude of mutual co-operation and understanding among the managers. Such attitude is useful not only at the work place but also in the social life.

Meaning of Management Development / Managerial Training

In addition to training for operative staff, an organisation has to take steps for training managers. Such training programmes are called 'managerial development / executive development programmes. Managerial talent is the most important asset that a company can possess. Management development ensures that as and when the demand for managers arise, suitably qualified persons are ready to fill the vacancies. Managerial development consists of all means by which executives learn to improve their performance. It is designed to improve the effectiveness of mangers in their present jobs and to prepare them for higher jobs in future. Managerial development aims at helping the mangers to realise their full potential. Management development is a way to improving the culture of the Organisation so that it could be geared to excellence. "People move organisations not machines." According to P. N. Singh, "Management development is an activity designed to improve the performance of existing managers, provide a supply of managers to meet the need of organisations in future and extend the understanding of the management activity by drawing

from the following three resource areas :- (a) Knowledge, (b) Experience, and (c) Trainee himself."

Need / Importance of Management Development

According to Edwin Flippo, "No organisation has a choice of whether to develop employees or not, the only choice is that of method." The need for management development is well accepted in the present business, which is fast changing due to technological and social developments.
1. Shortage of trained managers : Talented and matured managers are not easily available. It is not possible to appoint managers from outside for the key managerial posts. The better alternative is to select talented persons as trainee managers and develop their qualities through special training and wider exposures. In this way, the organisation can create its own team of talented managers to lead the whole Organisation. 2. Complexity of management jobs : The jobs of managers are now complicated and more challenging. They need varied skills for dealing with the complex organizational problems. For this, talented persons should be selected and proper training should be given to them. 3. Technological and social changes : Rapid technological and social changes are taking place in the business world. In India, such developments are fast taking place along with the liberalization and globalisation of business. Managers should be given proper training and exposure in computer applications and information technology. 4. Management obsolescence : Executive obsolescence occurs due to mental deterioration and aging process. This can be corrected by offering selfdevelopment opportunities to managers. In fact, self-development must continue throughout the career of an executive. 5. Complexity of business management : Business management is becoming very complicated due to government legislations, market competition, social pressures and consciousness among consumers. Well-trained and matured managers are therefore required. Such managers are not available easily. The best way is to train existing managers through management development programmes.

(B) Methods of Management Development / Managerial Development

For management development, several methods / techniques are used. These methods can be divided into two broad categories, namely,

i. ii.

Internal or On the job methods, and External or Off the job methods.

(A) Internal Training Methods / On The Job Methods

1. Coaching : Coaching on the job coaching is a method by which a superior teaches job knowledge and skills to a subordinate manager. He briefs the trainee executive about what is expected of him and how it can be done. The superior also checks the performance of his subordinate and guides him to improve his shortfalls and deficiencies. The superior acts as a friend and guide of his subordinate. Coaching method favours learning by doing. Its effectiveness depends on the capacity and the interest taken by the superior and also by the subordinate. The superior should adopt a positive approach in the coaching process and help the subordinate in achieving selfdevelopment. Coaching has certain limitations. For example, a trainee manager cannot develop much beyond the limits of his own superior's abilities. Similarly, the success of coaching method depends on the interest and initiative taken by the trainee - manager. 2. Counselling : Under this method, the subordinate wanting advice approaches his superior. Counselling is provided in matters relating to the job. However, on request from the subordinate, counselling may also be offered on matters not directly related to the job. There is two-way dialogue between the subordinate and the superior to find solution to his problem. Counselling provides emotional stability to trainee - subordinate. 3. Understudy assignment : An understudy is a trainee-manager who is to assume the full duties and responsibilities of the position currently held by his superior, when the later leaves his post due to retirement, transfer or promotion. Here, a departmental manager (head) selects one of his suitable subordinates to become his understudy. As an alternative, the personnel department may make the selection of understudy. The departmental manager will guide him (i.e. understudy) to learn his job and deal with the problems that confront the manager daily. The understudy will learn the job of his superior through observation and participation in the decision making. He may be given specific problems to study and to make recommendations for solving them. The understudy will be given wider exposure and an opportunity to develop capacity to deal with difficult problems and complex situations. 4. Job Rotation : It involves transfer of executives from one job to another. The aim of job rotation is to broaden the knowledge, skills and outlook of executives. This method can be used in the case of management trainee and also in the case of an existing manager due for promotion. Job rotation method is also useful for providing variety of job experience to managers. Advantages of Job Rotation 1. It brings all departments on the same footing as executives move from one department to other.

2. Job rotation facilitates inter-departmental cooperation. New procedures are introduced in departments along with the rotation of managers. 3. The benefit of wider exposure is available to trainee manager. 4. There is absence of monotony in the training process due to job rotation. Limitations of Job Rotation are:5. The work of departments is affected due to frequent changes of executives for training purpose. 6. The trainee manager finds it difficult to adjust himself to his new bosses. 7. Even the executives are not in a position to have specialized knowledge and training in one particular branch of work. 8. Frequent changes of position of executives may also affect their morale. 5. Delegation : Delegation is one more internal method of management development. The performance of subordinates may not improve unless additional responsibility and authority are delegated to them. Making the subordinates to achieve a particular target through delegation is one way by which subordinates will learn to grow and develop independently. They will develop leadership qualities and decision-making skills, which are necessary for a good manager. 6. Appointment as 'Assistant to' : A junior executive may be appointed as 'Assistant to' senior executive for the purpose of training and practical experience. Here, the junior executive is given exposure to the job of senior executive and he teams new techniques while providing assistance to his boss. This broadens his viewpoint and makes him ready for future promotions. The superior executive also gets the benefit as he can delegate some of his responsibilities to the assistant and also acts as guide of his assistant. 7. Membership of Committees : Inter-departmental committees are normally created for bringing co-ordination in the activities of different departments. Managers from different departments are taken on such committees. Junior managers are also given membership of such committees so as to give them a broader exposure to the viewpoints of other departmental heads. Ad hoc committee of executives is also constituted and is assigned a specific problem for study. Such commitee assignments offer opportunity of training to junior executives, as they have to study the problem in depth and make recommendations. 8. Project Assignment : In the project assignment method, a trainee manager is given a project that is closely related to the work of his department. The project relates to specific problem faced by the department. Here, the executive has to study the project on his own and make recommendations for

the consideration of the departmental head. Such assignment provides valuable experience to the trainee and develops problem-solving attitude, which is one essential requirement of an executive. 9. Promotions and Transfers : Promotions and transfers are two more internal methods of management development. Promotion gives an opportunity to a manager to acquire new skills required for the job at the higher level. It motivates him for self-improvement. Transfer also facilitates the broadening of viewpoint required for higher positions. It gives an opportunity to work at different positions and develop.

(B) External Methods of Management Development / Off The job Methods

1. Universities and Colleges : The universities and colleges, now, provide facilities of management education. Here, education is given through lectures, discussions, home assignments, tests and examinations. In India, Mumbai University (MU) has its Jamnalal Bajaj Institute of Management Studies (JBIMS) for various management development courses. Colleges affiliated to the Universities also conduct DBM, MBA and other management development programmes for the executives from business sector. Candidates working at managerial levels in companies are normally selected for such training programmes. 2. Management Institutions : Along with the universities and colleges, there are management training institutions such as NITIE, Bombay Management Association, and Productivity Councils and so on. These institutes run special training courses for graduates interested in management education and also orientation programmes for existing managers from public and private sector enterprises. Companies can depute their managers for short orientation courses and update the knowledge and information of their managers in specific areas. Even seminars, workshops and conferences are arranged for the training of managers by various associations such as chambers of commerce and export promotion councils. 3. Role-playing : Role-playing has been defined as "A method of human interaction, which involves realistic behavior in the imaginary situations." It is particularly useful for learning human relations and leadership training. Its objective is to raise the ability of trainee manager while dealing with others. In the role playing, a conflict situation is artificially created and two or more trainees are assigned different roles to play. For example, a male employee may assume the role of a female supervisor and the female supervisor may assume the role of a male employee. Then, both may be given a typical work situation and asked to respond as they expect others to do. Such role playing results in better understanding among individuals. It helps to promote interpersonal relations and attitude change. 4. Case Study : Case study method was first developed by Christopher Langdell at Harvard Law School. A case is a written account giving certain details of the situation is relation to a specific matter. Such case study may be related to any aspect of management such as production, marketing, personnel, finance and so on. The case presented is always incomplete. This

means the solution to the problem is not provided. The participants are supposed to identify the best available solution. A small group of managers are asked to study the case in the fight of theoretical study already completed and is followed by open discussion in the presence of capable instructor, who can guide intelligent discussion and analysis. There is nothing like one correct answer to the case study. Case study method has certain advantages like, (a) in-depth thinking about the matter by managers, (b) more perception in situation and greater respect for the opinions of others. 5. Conferences and Seminars : Deputing officers for conferences and seminars is a method available for management development. Various matters are discussed systematically in such conferences and seminars. This provides new information and knowledge to the managers. The participants in such conferences and seminars are limited. As a result, more persons get an opportunity to participate in such conferences for self-development. Conferences may be directed or guided or may be for consultation and finally for problem solving. 6. Simulation : Here, an executive or trainee is given practical training by creating situation / environment, which closely represents the real life situation at the work place. For example, activities of an organisation may be simulated and the trainee may be asked to make a decision in support of those activities. The results of those decisions are reported back to the trainee with an explanation. The report illustrates what would have happened if that decision was taken. The trainee teams from this feedback and improves his subsequent simulation. 7. Management / Business Games : A variety of computer and non-computer management / business games have been devised for training of managers. This training method is used in management development. It is a type of classroom method of training. The game is designed to represent real life situation. Employees for managerial positions are put in an exercise of actual decision-making. A problem is provided to them along with all the necessary information and constraints. The employee is asked to make a decision. The quality of this decision is judged by how well the applicant has processed the information provided to him. The processing of information is supposed to be guided by knowledge of the goals and policies of the organisation. Even if mistake is made in the game, the trainee can learn a lot out of his mistake. This avoids possible mistakes while taking decisions for his company. This method develops capacity to take rational decisions by managers. 8. TV and Video Instructions : TV and Video instructions are used for training and management development programmes. At present, programmes on management problems are arranged on TV network regularly. Videotapes are also available on management training. Books and periodicals are published regularly on management. Audio-visual aids (film strips, Video, tape recorders, TV, overhead projectors, etc.) are now used for training of managers.

Question Bank On Human Resource Management and Development - HRM / HRD

1. Explain the meaning, nature and features of human resource. 2. Explain, in brief, the steps in the selection procedure. 3. Explain the significance scientific selection of supervisory staff. 4. State and explain the different methods of training of managerial personnel. 5. What are the objectives and benefits of training of managers? 6. Write short notes on: i. ii. iii. iv. Recruitment and selection Sources of recruitment Meaning and objectives of employee training Advantages of training of employees

Article Source: PG Study Notes, Academic Year: 2009-2010, Article Sharing Motto: To Help Students Understand HRM Via Self-Study.

Article Source: Study Notes, Semester I, 2009-2010

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The term Levels of Management refers to a line of demarcation between various managerial positions in an organization. The number of levels in management increases when the size of the business and work force increases and vice versa. The level of management determines a chain of command, the amount of authority & status enjoyed by any managerial position. The levels of management can be classified in three broad categories: 1. Top level / Administrative level 2. Middle level / Executory 3. Low level / Supervisory / Operative / First-line managers Managers at all these levels perform different functions. The role of managers at all the three levels is discussed below:

LEVELS OF MANAGEMENT
1. Top Level of Management

It consists of board of directors, chief executive or managing director. The top management is the ultimate source of authority and it manages goals and policies for an enterprise. It devotes more time on planning and coordinating functions. The role of the top management can be summarized as follows -

a. Top management lays down the objectives and broad policies of the enterprise. b. It issues necessary instructions for preparation of department budgets, procedures, schedules etc. c. It prepares strategic plans & policies for the enterprise. d. It appoints the executive for middle level i.e. departmental managers. e. It controls & coordinates the activities of all the departments. f. It is also responsible for maintaining a contact with the outside world. g. It provides guidance and direction. h. The top management is also responsible towards the shareholders for the performance of the enterprise.
2. Middle Level of Management

The branch managers and departmental managers constitute middle level. They are responsible to the top management for the functioning of their department. They devote more time to organizational and directional functions. In small organization, there is only one layer of middle level of management but in big enterprises, there may be senior and junior middle level management. Their role can be emphasized as a. They execute the plans of the organization in accordance with the policies and directives of the top management. b. They make plans for the sub-units of the organization. c. They participate in employment & training of lower level management. d. They interpret and explain policies from top level management to lower level. e. They are responsible for coordinating the activities within the division or department. f. It also sends important reports and other important data to top level management. g. They evaluate performance of junior managers. h. They are also responsible for inspiring lower level managers towards better performance.
3. Lower Level of Management

Lower level is also known as supervisory / operative level of management. It consists of supervisors, foreman, section officers, superintendent etc. According to R.C. Davis, Supervisory management refers to those executives whose work has to be largely with personal oversight and direction of operative employees. In other words, they are concerned with direction and controlling function of management. Their activities include -

a. Assigning of jobs and tasks to various workers. b. They guide and instruct workers for day to day activities. c. They are responsible for the quality as well as quantity of production. d. They are also entrusted with the responsibility of maintaining good relation in the organization. e. They communicate workers problems, suggestions, and recommendatory appeals etc to the higher level and higher level goals and objectives to the workers. f. They help to solve the grievances of the workers. g. They supervise & guide the sub-ordinates. h. They are responsible for providing training to the workers. i. They arrange necessary materials, machines, tools etc for getting the things done. j. They prepare periodical reports about the performance of the workers. k. They ensure discipline in the enterprise. l. They motivate workers. m. They are the image builders of the enterprise because they are in direct contact with the workers.