B.Com. LL.B. (Five Years) Sem 2 Principles and Practice of Management 2016 Jun Question Paper with Solutions

Meaning

Administrative management theory is the branch of classical management thought that studies the management of the whole organisation from the viewpoint of top managers. It seeks general principles of management and organisation that can guide managers in any enterprise. It looks at management as a process made up of functions such as planning, organising, commanding, co-ordinating and controlling.

It differs from scientific management, associated with F. W. Taylor. Scientific management studied work at the operating level: how each worker can do a job most efficiently. Administrative management studies the organisation as a whole: how it should be structured and managed from the top. The two together form the classical school of management.

Henri Fayol: the founder

Henri Fayol (1841 to 1925), a French mining engineer, was managing director of the Commentry-Fourchambault mining company from 1888 to 1918. In Administration industrielle et générale (1916), translated as General and Industrial Management (1949), he laid the foundation of administrative theory.

4. Fourteen principles of management. He set out fourteen flexible principles. They are division of work, authority and responsibility, discipline, unity of command and unity of direction. Then come subordination of individual interest to general interest, remuneration, centralisation and the scalar chain. The last five are order, equity, stability of tenure, initiative and esprit de corps. He allowed a "gang plank" for direct contact between people at the same level when speed is needed.

Luther Gulick and Lyndall Urwick

Luther Gulick and Lyndall Urwick edited Papers on the Science of Administration (1937). In his essay in that volume, Gulick summed up the work of the chief executive in the word POSDCORB:

1. Planning;
2. Organising;
3. Staffing;
4. Directing;
5. CO-ordinating;
6. Reporting;
7. Budgeting.

3. functional differentiation, the division of work into distinct functions;
4. line and staff, the distinction between those who command and those who advise.

Main features of administrative management theory

1. A top-down view: management is studied from the viewpoint of the chief executive.
2. Universality: its principles are meant to apply to all organisations.
3. Management as a process: management is broken into functions.
4. Emphasis on structure: division of work, hierarchy, span of control and line and staff.
5. Formal organisation: the focus is on the official structure of authority and responsibility.
6. Principles: management is guided by general principles.
7. Teachability: management can be learnt and taught.

Contributions

1. It gave the first general theory of management for the whole organisation.

3. Neglect of the human side. The theory treated the organisation as a formal structure and people as parts of it. The Hawthorne studies and the human relations school showed the importance of informal groups, morale and social needs.
4. A mechanical, closed view. It paid little attention to the environment outside the organisation and assumed stable conditions.
5. Rigidity. Strict application of principles such as unity of command can make organisations slow and inflexible, and modern matrix structures break some of them.

Summary table

Relevance today

Much of administrative theory is still in use. Organisation charts, job descriptions and reporting lines apply its ideas of hierarchy, division of work and unity of command. Management courses are built around its functions. Discussions of span of control, delegation and centralisation follow the questions it first raised. At the same time, modern managers apply its principles flexibly, combining them with insights from the human relations, systems and contingency approaches.

Why it is called a classical theory

The theory is called classical because it was among the first systematic attempts to explain management. It also shares the outlook of the early twentieth century. It sought one best way of organising, assumed a stable environment and saw people mainly as holders of positions. Later schools did not throw it away. They added what it lacked: the human side, the environment and the idea that the best approach depends on the situation.