FUNDAMENTALS OF

MANAGEMENT
 Module 1
INTRODUCTION TO MANAGEMENT
Role of Management: to guide the organization
towards goal accomplishment.
 Meaning of Management
• A central agency is required to co-ordinate the
activities and efforts of various individuals
working together in the organisation so that
they can work collectively as a team. Such an
agency is called management.
• Management is the effective utilisation of
human and material resources to achieve the
objectives of the enterprise. It is concerned
with the planning, organising, directing and
controlling the affairs of an organisation.
• As the term ‘management’ is used in several contexts,
it has different meaning to different people.
• Management has been used as a ‘noun’, as a ‘process’
and as a ‘discipline’.
• As a noun, it refers to the individuals who perform the
managerial job (managers).
• As a process, it means a series of functions like
planning, organising, staffing, directing, controlling etc.
• As a discipline, it means an organised body of
knowledge that can be taught and researched.
 Definition of Management
• According to Mary Parker Follet,
“management is the art of getting things done
through people”.
• According to Peter F. Drucker “management is
a multi-purpose organ that manages a
business and manages managers and manages
worker and work”.
• “ Management is an art of knowing what you
want to do and then seeing that it is done, in
the best and cheapest way” __ F. W. Taylor
• “Management is the creation and
maintenance of an internal environment in an
enterprise where individuals, working in
groups, can perform efficiently and effectively
towards the attainment of group goals” -
Koontz and O’ Donnell
 Features of Management
• Management is an integrated process
• Management is goal-oriented
• It is a social process
• Management is situational
• It is a distinct activity
• It is a continuous process
• Management is multi-disciplinary
• It is universal in character
• Management is intangible
 Features of Management
• Management is an integrated process: Management
involves harmonising of human and physical resources
towards the attainment of common objectives. The
fundamental principles of management are applicable
in all spheres of life.
• Management is goal-oriented: All activities of
management are goal oriented. Management exists for
the achievement of specific objectives.
• It is a social process: Management consists of getting
things done through others. This involves dealing with
individuals at different levels of sensitivity and
understanding.
• Management is situational: Management is the application of
knowledge to realities in order to attain desired results.
Management concepts, propositions and principles are
relatively dependable guides for behaviour over a fairly wide
range of situations. They are to be applied with judgement.
• It is a distinct activity: It has distinct process consisting of
functions like planning, organising, staffing, directing and
controlling.
• It is a continuous process: Management is a dynamic and on-
going process. The cycle of management continues to operate
as long as there is organised action for the achievement of
group goals.
• Management is multi-disciplinary: Management has to deal
with human behaviour under dynamic conditions. Therefore it
depends upon wide knowledge derived from several
disciplines like engineering, sociology, psychology, economics,
anthropology, etc.
• It is universal in character: It is universal in character in
the sense that the principles and techniques of
management are equally applicable in the field of
business, education, military, government and hospital.

• Management is intangible: Management is unseen or

invisible force. It cannot be seen but its presence can
be felt everywhere in the form of results. But the
managers who perform the functions of management
are very much tangible and visible.
 Importance of Management
• Management focuses on efficiency and effectiveness: It
gives stress on best equipments, plants, offices, products,
services and human relations. These factors increase
effictiveness. To secure efficiency of operations
management has to reduce cost of production and
increase output.

• Brings order in organisation: People in an organisation may

vary with respect to their educational qualification and
values. So their style of functioning and management may
be different. Hence the management must direct all the
activities towards the attainment of common objectives.
• Optimum utilisation of resources: Management
effectively utilises and controls all the factors of
production like men, materials, money, machine
and methods. The efficient use of these resources
depends upon the efficiency and motivation of
workers.
• Meet the challenge of change: Management
enables an organisation to face the challenge of
change. Managers maintain a dynamic
equilibrium between an enterprise and its
environment through innovation and creativity.
• Determination of objectives: The success of various
operations of an organisation mainly depends on
identification of its objectives. Objectives are identified
and laid down by the management. Thus management
enables an enterprise to achieve its desired objectives
through proper planning and control.
• Economic growth: The efficient and effective
management of scarce resources leads to economic
development and growth. Efficient management leads
to greater and more economic production for the
society.
• Achieving group goals: Along with the attainment of the
individual goals of each managerial personnel,
management must ensure efficiency through the efforts of
the group to attain the overall goal of the organisation.
• Stability: Management co-ordinates the activities of the
different departments in an enterprise and establishes
team spirit amongst the personnel. It directs and controls
the organisation to keep it in the right track.
• Human development: Management improves the
personality and caliber of people to raise their efficiency
and productivity. A good manager provides suitable
guidance to his subordinates so as to develop their inborn
talents.
 Nature of Management
• Management as an art
• Management as a science
• Management as a profession
• Management as a social process
• Management as a discipline
 Management as an art
• Art means the application of knowledge and
personal skills to achieve desired results.
• Art involves practical application of theoretical
knowledge and skill.
• Management is an art because it fulfils this
feature.
• However, the application of these principles
depends on the experience and skill of managers.
• Like any other art, management creates results.
Management as an art has the following
features:
• Situational
• Personal skill
• Personal judgement
• Continuous practice
• Practical knowledge
 Management as a science
• Science is a systematically organised body of
knowledge.
• It is based on logically observed findings, facts
and events. It comprises exact principles,
which are capable of verification.
Management is a science because it contains all
essentials of science.
• Management is now a systematised body of
knowledge.
• Principles and theories are now available in
every area of management.
• Principles of management have been evolved
through practical experience and theoretical
research.
• Managerial principles have a wide and
repetitive range of application.
• Management theory and principles can be
taught in classrooms and industry.

Management is an inexact science

• Effective performance of management functions need
an adequate basis of knowledge and a scientific
approach. Thus management is both an art and a
science.
• Science and art in management exist together in every
function of management.
 Management as a profession
• Profession is a well defined body of
knowledge which is learned intellectually and
organisationally. In a profession, examination
or education restricts entry.
• It is primarily concerned with services to
others.
• Professionals normally work for professional
charges in the form of fee.
Because of satisfying the following features,
management may be said to be a profession.
• Specialised knowledge
• Formal methods of training
• Fees as remuneration
• Existence of ethical code
• Establishment of representative organisation
Profession refers to an occupation which requires
specialised knowledge and training. The basic
requirements of profession are:
• Existence of skill and specialised body of knowledge
• Availability of formal methods of training and
experience.
• Existence of a professional organisation.
• Formal ethical code of conduct for the guidance for its
members.
• Charging fees based on the nature of service extended.

Management is an art, a science and also a

profession.
 Management as a social process
• Management is a social process. Workers,
supervisors, managers etc. are vital elements
of the society. It is therefore, necessary that
the business must be responsible to all these
elements of the society.
The following factors give emphasis to the fact that
management is a social process.
• Social responsibility
• Human touch is inseparable part of management
• Management is a group activity
• Responsibility of management towards
employees.
• Arrangement for social security.
• Quality products to consumers at fair prices.
 Management as a discipline
Discipline is a body of knowledge, which can be organised
and taught. A discipline should have the following
features.
• It should gain acceptability.
• It should be capable of discovering completely verified
knowledge.
• It should be capable of being passed on to others.
• The knowledge derived thereof can be successfully
applied.
Management is a specialised body of knowledge, which is
studied and practiced in specialised institutions and
enterprises.
 SCOPE OF MANAGEMENT

Functional areas Subject Matter

Financial
management Human
Production
Resource
Management Office
Management
Management Marketing
Management

Planning Organising Staffing Directing Controlling

1. Functional areas of management
• Financial Management: It deals with how
funds are procured and utilised.
• Human Resource Management: HRM deals
with acquisition and utilisation of human
resources in the organisation.
• Production Management: It consists of
production related aspects like production
planning, production control, quality control
etc.
• Office Management: It is concerned with
office layout, staffing, equipment layout.
• Marketing Management: It deals with aspects
like price determination, channels of
distribution, sales promotion, etc.
• Maintenance Management: It deals with
proper care and maintenance of buildings,
plants, machinery, furniture etc. of the
business enterprise.
2. Subject matter of management

• This primarily includes the various functions

performed by management such as planning,
organising, staffing, directing and controlling.
 Levels of Management
• Levels of management refers to a line of
separation between different positions held
by seniors and juniors drawn with a view to
distinguish each other in respect of their
duties, responsibilities, rights and authority.
Levels of Management
Top level Management: It consists of the Board
of directors, Chairman and the Chief executives.
The main functions of top management are;
• To co-ordinate and integrate the activities of different
departments and divisions of the company.
• To establish long term corporate plans of the company.
• To analyse and interpret changes in the external
environment of the company.
• To formulate and approve the Master Budget and
departmental budgets.
• To design a broad organisation structure.
• To provide overall direction and leadership to the company.
• To appoint departmental heads and key executives.
Middle level Management: All the functional department
heads come under middle level managers. Sales manager,
branch manager, office manager etc. Functions of these
managers are;
• To monitor and control the operating
performance.
• To co-operate among themselves so as to
integrate the various activities of department.
• To interpret and explain the plans and policies
formulated by top management.
• To lay down rules and regulations to be
followed by supervisory personnel.
Lower level Management: It consists of supervisors,
foremen, sales officers etc. These managers
maintain close contacts with the workers and
supervise the day to day operations. The functions
of supervisory management are as follows:
• To supervise and control worker’s operations and to maintain
personal contacts with them.
• To maintain discipline and good human relationship among
workers.
• To advise and assist workers by explaining work procedures,
solving their problems etc.
• To assign jobs to workers and to make arrangements for their
training and development.
• To plan day to day production within the goals laid down by
higher authorities.
• To report feedback information and workers’ problems to the
higher authorities.
Functions/Process of Management
Planning
• Planning is the initial task of every management.
Planning helps in determining the future course of
action to be followed for achieving the organisational
goals.
• It is the act of deciding in advance what to do, when to
do, how to do and who will do a particular job.
Planning is a process which involves thinking before
doing.
• Planning is a function performed by managers at all
levels.
• Planning bridges the gap between where we are and
where we want to go.
 Definition
• According to Koontz and O’Donnel “planning
involves selecting enterprise objective,
departmental goals and programmes and
determining the ways of reaching them”.
Organising
• The term organising refers to the process of
making orderly determination and
arrangement of the tasks, functions, relations
and role necessary for the achievement of
certain goals.
• To get things done through others, a manager
has to organise their activities properly, so
that objectives will be achieved easily.
 Definition
• According to Urwick “Organising is a process
of dividing up of activities which are necessary
to any purpose and arranging them in a group
which are designed to individuals.”
Staffing
• Staffing is the process of filling all positions in the
organisation with adequate and qualified
personnel. Staffing consists of:
• Manpower planning
• Recruitment, selection and training
• Placement of manpower.
• Development, promotion, transfer and appraisal.
• Determination of employee remuneration.
 Definition
• According to Theo Haimann, “Staffing function
is concerned with the placement, growth and
development of all those members of the
organisation whose function is to get things
done through the efforts of other individuals.”
Directing
• Directing is the managerial function of
guiding, supervising, motivating and leading
people towards the attainment of planned
target of performance.
• It initiates organised and planned action and
ensures effective performance by
subordinates towards the accomplishment of
group efforts.
 Definition
• Earnest Dale, “Direction is telling people what
to do and seeing that they do it in the best
possible manner.”
Controlling
• Control is essential for achieving objectives of an
enterprise.
• The planning of various activities does not ensure
automatic implementation of policies. Control is a
process which enables management to get its
policies implemented and take corrective actions
if the performance is not according to the
predetermined standards.
• If planning is the beginning of the management
process, controlling is the final stage.
 Definition
• Terry and Franklin, “Controlling is determining
what is being accomplished that is, evaluating
the performance and, if necessary applying
corrective measures so that performance
takes place according to plans.”
 Principles of Management
• During the early years of 20th century, a
number of principles of management were
suggested to assist in managerial thinking and
action. Henry Fayol, F.W. Taylor, J.D Mooney,
Max Weber and many other management
thinkers have derived certain generalisations
from their experience in managing
organisation. These generalisations have been
termed as principles of management.
 Principles of Management Meaning
• Principles are fundamental truth that explain the
relationship between two or more sets of
variables under given situations.
• Principles are based on scientific study, enquiry
and analysis.
• Principle means accepted rule of action or
conduct.
• It establishes cause and effect relationship and
serves as a guide to thought and action.
• They help in predicting the results of managerial
action.
• Management principles are statements of
fundamental truth, which provide guidelines
for managerial decision-making and
behaviour.
• Management principles are intended to apply
in all types of organisations and are flexible in
nature.
 Definition
• In the words of Herbert G. Hicks, “ Principles
of management are the guiding rules of laws
for managerial actions.”
Henry Fayol’s principles of
management
 Introduction

• Henry Fayol, a French industrialist, is now

recognised as the Father of Modern
Management. In the year 1916 Fayol wrote a
book entitled “General and Industrial
administration”. In this book, he gave 14
principles of management. These 14 principles
of management are universally accepted and
used even today.
Henry Fayol’s principles of
management
1. Division of work: This principle states that
various functions in the organisation should be
divided in order to get the benefit of
specialisation. Specialisation increases the skill
and ability of the workers, which in turn
increases output.
2. Authority and Responsibility:
3. Discipline :

o Discipline is required not only on the part of

subordinates but also on the part of management.
4. Unity of command: This principle insists that
subordinate should receive orders from one superior
only. It is necessary to avoid conflicting orders and
confusion. The basic fact is that one subordinate can
serve only one master at a time.
5. Unity of Direction: The entire organisation should
be moving towards a common objective in a
common direction. People engaged in same kind of
activities must have the same objectives in a single
plan. This is essential to ensure unity and
coordination in the enterprise. Unity of command
cannot exist without unity of direction.
6. Subordination of individual interest to general
interest: Management should try to reconcile
individual interests with common interests.
When there is conflict between the two, the
interest of the organisation should prevail over
individual interests. For this employees should
be honest and sincere and there should be
continuous supervision of work.
7. Remuneration of Personnel: The remuneration for
work done must be fair and reasonable. It should act
as a source of satisfaction and means of motivation
for the employees. If an organisation wants efficient
employees and best performance, then it should
have a good remuneration policy.
8. Centralisation: The management must decide the
degree of centralisation and decentralisation of
authority. Everything that reduces the importance of
subordinates role is centralisation. Everything that
increases the subordinates importance is
decentralisation. There should be a proper balance
between centralisation and decentralisation.
9. Scalar chain: Scalar chain refers to the line of
authority or the chain of superiors starting from
the highest and moving towards the lowest
rank. This states the superior subordinate
relationship and the authority of superiors in
relation to subordinate at various levels.
10. Order:
11. Equity: Equity implies that employees should
be treated with justice and kindness. Managers
should adopt a sympathetic and unbiased
attitude towards subordinates. Equity helps to
create cordial relations between management
and workers.
12. Stability of tenure of personnel: Fayol states
that employees should not be moved from their
positions frequently. Employees can not work
efficiently unless job security is assumed to them.
Reducing the turnover of personnel will result in
more efficiency and less expense.
13. Initiative: Initiative implies the creativity in an
individual. The power to think, develop and execute a
plan is collectively referred to as initiative.

14. Esprit de corps: The word meaning is “union is

strength”. This refers to harmony and mutual
understanding among the members of an
organisation. Management should strive to maintain
team-spirit and co-operation among employees so
that they can work together as a team for the
accomplishment of common objectives.
 Scientific Management

• Frederick Winslow Taylor (March 20,1856-March 21,1915) is

considered to be the father of scientific Management.
• He was an American Mechanical Engineer who was always
looking for efficiency improvements within the production
industry
• During his career spanning a period of 26 years, he conducted a
series of experiments in three companies: Midvale Steel,
Simonds Rolling Machine and Bethlehem Steel.
• Taylor conducted a series of experiment over a period of more
than two decades.
• He launched a new movement in 1910 which is known as
‘Scientific Management’.
 Scientific Management
• Scientific means systematic, analytical and
objective approach but management means
getting things done through others.
• Scientific Management refers to the
application of science to management
practices. F.W. Taylor advocated a detailed
study of each job to determine the best way
of doing it.
• In the words of F.W. Taylor “Scientific
management means knowing exactly what to
you want men to do and seeing that they do it
in the best and cheapest way”.
 Principles of scientific management
• Replacement of old rule of thumb
method(Science, not Rule of Thumb)
• Maximum output
• Equal division of responsibility
• Scientific selection and training
• Standardisation
• Incentive wages
• Co-operation between Labour and management
Replacement of old rule of thumb method
• Under scientific approach, decisions are made
on the basis of fact as developed by the
application of scientific method to the
problem concern. The scientific methods
consist of research and experimentation,
collection of data, analysis of data and
formulation of certain principles on the basis
of such analysis.
Maximum output
• The management and workers must try to
achieve maximum output in the place of
restricted output. This will be highly beneficial
and useful to the workers, management and
the society at large.
Equal division of responsibility
• If management is responsible for planning and
organizing, the workers are responsible for the
execution of work as per the instruction of
management. This principle is known as equal
division of responsibility.
Scientific selection and training
• The selection of right type of the worker for
the right job is very significant. Under this, the
task of selection is entrusted to central
personnel department. Then the selected
workers are to be trained to avoid wrong
method of work.
Standardisation
• Taylor believed standardisation of methods,
tools, time, materials etc. for each activity is
very important. Therefore standards should be
fixed for each of them.
Incentive wages
• Taylor believed that wage incentives should be
integral part of each job. In his opinion if
labour is suitably rewarded and is satisfied
with the job he would definitely try to take the
enterprise on the top. Taylor suggested the
differential wage rate system.
Labour management co-operation
• There should be close co-operation between
workers and management in order to achieve the
best possible result. Scientific management
requires that work should be carried out by
individuals in co-operation with each other based
on mutual trust, confidence and sense of
belongingness. This can be achieved through a
change in mental attitude of workers and the
management towards each other. Taylor called it
as mental revolution.
Mental revolution
• This technique involves a shift of attitude of
management and workers towards each other.
Both should understand the value of each other
and work with full participation and cooperation.
The aim of both should be to improve and boost
the profits of the organisation. Mental revolution
demands a complete change in the outlook of
both the workers and management; both should
have the sense of belongingness.
 Techniques of Scientific Management
• Scientific task setting: Taylor suggested that
the task of every worker for every day should
be determined through scientific
investigation. Taylor called it “a fair day’s
work”. Every manager must know in advance
the fair day’s work for each worker.
• Planning: After setting the task of an average
workers the next step is to plan the plan the
production, Taylor advocated the planning
function should be separated from the
executive function. The planning department
should prepare detailed instruction and
information relating to the type, shape and
quality of products to be produced.
• Work study: Work study means organised,
systematic and objective analysis and
assessment of the operational efficiency of all
the elements connected with the work. This
include the following techniques.
a) Method study: It is a survey of production
process. It aims to evolve the best method of
doing a particular job by simplifying the
production process, methods, tools etc.
b) Motion study: Motion study relates to the
study of movements of a worker or a machine in
doing a job. It helps to eliminate unnecessary
movements and find out the best method of
doing a job.
c) Time study: Time study is the process of
recording the exact time taken for doing a job
with a view to find out a standard time for doing
the job.
d) Fatigue study: Fatigue study seeks to
determine the amount and frequency of rest of
intervals in completing task. Rest intervals
should be scientifically determined.
• Standardisation and simplification of work:
Standardisation involves setting up of
standards in every phase of business
operation. It can be standardisation of
process, raw material, time, product,
machinery, methods or working conditions.
• Scientific Rate setting: Positive measures should
be adopted to fine wage rate in such a manner
that the average workers is induced to attain the
standard for this purpose. Taylor recommended
the differential piece rate system of wage
payment in which higher rates are offered to
those workers who produce more than the
standard output and lower rates are given to
those who produce below standard output.
• Wages are given to the employees on the basis of
their performance.
• Functional foremanship: Taylor advocated that
specialisation must be introduced in an
organisation. He advocated ‘functional
foremanship’ for this purpose. Functional
foremanship is a form of organisation which
involves supervision of a worker by specialist
foremen.
 Roles of a manager
• Henry Mintz Berg has identified that apart
from performing basic managerial functions,
there are ten managerial roles to be played by
the managers in general.
1. Interpersonal Roles
2. Informational Roles
3. Decision making
 Roles of a manager
1.Interpersonal Roles
• Figurehead role: In this role, every manager has to
perform some duties of a ceremonial nature, such as
greeting the touring dignitaries, attending the wedding
of an employee, taking an important customer to lunch,
and so on.
• Leadership role: As a leader, every manager must
motivate and encourage his employees. He must also try
to reconcile their individual needs with the goals of the
organisation.
• Liaison role: In this role of liaison, every manager must
cultivate contacts outside his vertical chain of command
to collect information useful for his organisation.
2. Informational roles
• Role of Monitor: The manager has to seek and receive
information about his organisation and external events.
An example is picking up a rumour about his
organisation.
• Role of Disseminator: It involves transmitting
information and judgements to the members of the
organisation.
• Role of Spokes persons or representatives: In this role,
a manager speaks for his organisation. A manager
addressing the trade union is an example.
3. Decision roles:
• As an Entrepreneur: It involves initiating change or
acting as a change agent.
• As a Disturbance handler: This refers to taking charge
when the organisation faces a problem or crisis.
• As a Resource allocator: In this role a manager
approves budgets and schedules, sets priorities and
distributes resources.
• As a Negotiators: As a negotiator, a manager bargains
with suppliers, dealers, trade unions, agents etc.
 Schools of Management Thought
• The schools of management thought are
theoretical frameworks for the study of
management thought are based on different
assumptions about human beings and the
organisations for which they work.
• Since the formal study of management began late
in the 19th century, the study of management
has progressed through several stages as scholars
and practitioners working in different eras
focused on what they believed to be important
aspects of good management practice.
 Schools of management theory
• The classical School
• The Human Relations School
• Behavioural Science School
• The systems School
• The contingency theory School
 The Classical school
• The Classical school is one of the oldest schools
of management thought. It concentrates on
organisational structure and their management.
• The classical writers like F.W. Taylor and Henry
Fayol emphasised on work planning, technical
requirement, principles of management, formal
structure and the assumptions of rational and
logical behaviour.
• The classical schools include: i) Taylor’s scientific
management, ii) Fayol’s Administrative theory iii)
weber’s bureaucracy.
 Features of classical school
• Study of formal organisation.
• Study of managerial experiences
• Emphasis on organisation structure
• Formal communications
• Motivated by economic rewards
A) Bureaucracy
B) Scientific Management
C) Administrative management or Process
management: Taylorism management was launched
in the U.S.A and his followers at about 1910. At
about the same time administrative theory of
management was initiated by Henry Fayol a French
Engineer-cum Manager in Europe.
• Sheldon, Mooney and Reliley, H. Simon, L.F
Urwick, L.Gulick, C.Bernard were the followers of
Fayol and they contributed a lot to the
administrative theory of management
 Human Relations School
• This school of thought was developed during the early
1930’s.
• The human relations school argues that the human
element plays an important role in any organisation
and their performance depend upon the extent of their
need satisfaction.
• McGregor, Likert, Simon, Elton Mayo were the
contributors to this school of Thought
• The Human relations approach emerged from a
research project that began as a scientific management
study called Hawthrone Experiment.
 Hawthorne Studies
• Western Electric Company was a manufacturer of
communication equipments. It hired team of Harvard
researchers comprising of Elton Mayo, Roethlisberger
and their associates. The idea was to find out the
influence of physical working conditions on worker
productivity, in its Hawthorne plant located in Chicago.
The research project is known as Hawthorne Studies.
• A series of experiments were conducted from 1924 to
1932.
• Illumination experiment, Relay Assembly Test Room
Experiment, The mass Interviewing program etc.
 Features
• The organisation is a psycho-social system.
• Employees not only have economic needs but
also non-economic needs such as psychological
and social needs.
• Participative style of management fulfills the
psychological needs of employees.
• Informal organisation and informal relationships
are important.
• Productivity and employee behaviour are
influenced by informal work groups.
 Behavioural Science School

• Behavioural science approach utilises methods and techniques

of social sciences such as psychology, sociology and
anthropology for the study of human behaviour.

• The noted contributors to this school include Abraham

Maslow, Fredrick Herzberg, McGregor, Lawler, Sayles
and Tannenbaum.
 Systems School
• The major contributions to the school have come from
Kenneth Boulding, R. A. Johnson, Efficast and Trist. The
systems approach attempts to view the organisation as a
unified, purposeful system composed of interrelated parts.
• As a system, an organisation draws inputs from the
environment, transforms these inputs and returns the
output back to the environment.
Features of systems approach school
• An organsation is a unified and integrative system.
• All the subsystems, parts and subparts are interrelated and
interdependent.
• This approach can be utilised by any other schools of
management thought.
 The contingency theory School

• Contingency approach was developed by J. W.

Lorsch and P. R. Lawrence in 1970. According to the
contingency school, management problems are
different under different situations.
• Also known as ‘Situational theory’
• Effective management requires identifying the
important variables of the particular situation and
choosing the techniques appropriate to the
situation.
Features of Contingency Theory School

• Management is entirely situational.

• Management policies and procedures should
respond to environmental conditions.
• Management should understand that there is
no best way of managing.
• Contingency approach is action oriented.