1.
System Approach Applied to Organization
What is it?
The system approach sees an organization as a big system made of
smaller parts (like departments) that work together to achieve goals.
Each part depends on the others, and the organization interacts with the
outside world (like customers or suppliers).
How it works:
● The organization has inputs (like money, people, materials),
processes (like making products), and outputs (like goods or
services).
● All parts (e.g., sales, production) must connect and work smoothly.
● It also considers the environment (like market trends or laws).
Example: A school is a system. Teachers (one part) teach students, the
office (another part) manages fees, and the principal coordinates
everything. The school interacts with parents and follows government
rules to run well.
Why it matters: It helps managers see how all parts of the organization
affect each other and plan better.
2. Managerial Skills
What are they?
Managerial skills are the abilities a manager needs to do their job well.
There are three main types:
● Technical Skills: Knowing how to do specific tasks in the job.
Example: A restaurant manager knows how to cook or use a cash
register.
● Human Skills: Working well with people, like communicating or
motivating. Example: A teacher listens to students’ problems and
encourages them.
● Conceptual Skills: Thinking big and solving problems. Example:
A company boss plans how to grow the business in five years.
Why they matter: Managers need these skills to lead teams, solve
issues, and make smart decisions.
Example: A store manager uses technical skills to manage inventory,
human skills to motivate workers, and conceptual skills to plan a new
branch.
3. Importance of Management
Why is management important?
Management helps an organization succeed by:
● Setting goals: Decides what to achieve. Example: A shop plans to
sell more toys during holidays.
● Using resources wisely: Makes the most of money, people, and
time. Example: A factory uses less electricity to save costs.
● Guiding people: Keeps workers motivated. Example: A team
leader encourages employees to work hard.
● Solving problems: Fixes issues quickly. Example: A manager
handles a customer complaint calmly.
● Growing the business: Plans for the future. Example: A café
opens new branches to reach more people.
Example: In a school, management plans the timetable, hires good
teachers, and ensures students learn, making the school run smoothly.
4. Behavioral Management Approach
What is it?
The Behavioral Management Approach focuses on people in the
organization, not just tasks or rules. It says happy and motivated workers
do better work. It studies how people behave, communicate, and work
together.
Key Ideas:
● Treat workers kindly and understand their feelings.
● Motivate them with rewards, respect, or good work conditions.
● Encourage teamwork and leadership.
Example: A toy store manager gives workers breaks, listens to their
ideas, and praises good work, so they’re happier and sell more toys.
Good Points:
● Workers are more motivated (e.g., a happy team works harder).
● Improves teamwork (e.g., employees share ideas).
● Creates a better workplace (e.g., less stress).
Bad Points:
● Takes time to understand people.
● May ignore strict rules or efficiency.
Example: A tech company like Google gives employees free food and
fun offices to keep them happy and creative.
5. Modern Management Theories
What are they?
Modern Management Theories are new ideas about managing
organizations, combining old theories with today’s needs. They focus on
flexibility, technology, and teamwork.
Key Types:
● Systems Theory: Sees the organization as a system with
connected parts. Example: A car company links production, sales,
and marketing to work together.
● Contingency Theory: Says there’s no one best way to manage; it
depends on the situation. Example: A shop changes its style
during busy holidays.
● Total Quality Management (TQM): Focuses on improving quality
in everything. Example: A bakery checks every cake to ensure it’s
perfect.
Why they matter: They help organizations stay flexible and meet
modern challenges like technology or competition.
Example: A phone company uses TQM to ensure every phone works
perfectly and contingency theory to adjust plans during a supply
shortage.
6. Single Ownership (Sole Proprietorship)
What is it?
Single ownership is when one person owns and runs a business alone.
They make all decisions and keep all profits.
Advantages:
● Easy to start (e.g., a small tea shop opens quickly).
● Full control (e.g., the owner chooses what to sell).
● Keeps all profits (e.g., a tailor earns all money from stitching).
● Simple rules (e.g., fewer government forms).
Limitations:
● All losses are the owner’s (e.g., if the shop fails, the owner pays
debts).
● Limited money (e.g., only the owner’s savings fund the business).
● Hard to grow big (e.g., a single shop can’t open many branches).
● Owner works a lot (e.g., no one else to manage).
Example: A street food stall run by one person who cooks, sells, and
keeps all earnings but risks losing personal money if business fails.
7. Partnership
What is it?
A partnership is when two or more people start a business together,
sharing work, money, and profits.
Types of Partners:
● Active Partner: Works in the business daily. Example: A partner
runs a bakery’s daily sales.
● Sleeping Partner: Gives money but doesn’t work. Example: A
partner funds a shop but doesn’t manage it.
● Nominal Partner: Lends their name for reputation but doesn’t
work or invest. Example: A famous chef’s name is used for a
restaurant.
● Limited Partner: Only risks their investment. Example: A partner
funds a store but isn’t responsible for debts.
Advantages:
● More money (e.g., partners pool savings to open a bigger shop).
● Shared work (e.g., one manages, another sells).
● Better ideas (e.g., partners brainstorm new products).
● Easy to start (e.g., fewer rules than big companies).
Limitations:
● Partners may fight (e.g., disagree on how to spend money).
● Shared profits (e.g., earnings split between partners).
● Unlimited liability (e.g., partners pay debts with personal money).
● Ends if a partner leaves (e.g., business stops if one quits).
Example: Two friends start a clothing shop, sharing costs and work, but
argue over designs and risk personal savings if the shop fails.
8. Public Corporations
What are they?
Public corporations are businesses owned by the government to provide
services or products for the public. They don’t focus on profits but on
public welfare.
Advantages:
● Serves the public (e.g., a government bus service offers cheap
travel).
● Gets government funds (e.g., a public hospital gets money for
equipment).
● Stable (e.g., doesn’t close easily like private businesses).
● Focuses on welfare (e.g., provides services in poor areas).
Limitations:
● Slow decisions (e.g., government approvals take time).
● Less efficient (e.g., workers may not work as hard).
● Depends on government (e.g., needs funding to run).
● May lose money (e.g., if costs are higher than income).
Example: A government-run railway provides affordable travel but may
have delays due to slow decisions or lack of funds.
9. Line Organization
What is it?
Line organization is a simple structure where each person reports to one
boss in a clear chain, like a straight line from top to bottom.
Advantages:
● Clear roles (e.g., a worker knows their boss).
● Fast decisions (e.g., a small shop owner decides quickly).
● Simple to understand (e.g., everyone knows who’s in charge).
● Strong control (e.g., a boss directly manages workers).
Disadvantages:
● Overworks bosses (e.g., one manager handles too many tasks).
● No experts (e.g., no special advisors for tough problems).
● Not flexible (e.g., hard to change plans quickly).
● Works best for small groups (e.g., not good for big companies).
Example: A small grocery store where the owner manages workers
directly, making fast decisions but struggling with complex issues.
10. Functional Organization
What is it?
Functional organization divides work into departments based on special
skills, like sales, production, or finance. Each department has its own
expert manager.
Advantages:
● Experts handle tasks (e.g., a marketing team creates great ads).
● Better work quality (e.g., trained accountants manage money well).
● Clear focus (e.g., each department handles its own area).
● Helps workers grow (e.g., employees learn specialized skills).
Disadvantages:
● Slow decisions (e.g., departments must agree).
● Less teamwork (e.g., sales and production may not coordinate).
● Confusing for workers (e.g., reporting to multiple managers).
● High costs (e.g., hiring experts is expensive).
Example: A big clothing company has a design team, a sales team, and
a finance team, each doing specialized work but sometimes not
coordinating well.
11. Line and Staff Organization
What is it?
Line and staff organization combines line (direct bosses) with staff
(experts who advise but don’t decide). Line managers run daily work,
while staff give ideas.
Advantages:
● Expert advice (e.g., a tech expert helps a store manager).
● Better decisions (e.g., combines practical and expert ideas).
● Clear roles (e.g., line managers control, staff advise).
● Flexible (e.g., can handle complex problems).
Disadvantages:
● Conflicts (e.g., line managers ignore staff advice).
● Expensive (e.g., hiring experts costs more).
● Confusing (e.g., workers may not know who to listen to).
● Slows decisions (e.g., too many opinions).
Example: A hospital has doctors (line) treating patients and advisors
(staff) suggesting new equipment, but doctors may disagree with
advisors.
Confirmation of Covered Topics
The following topics were fully addressed in your previous questions:
● Organization: Definition, necessity, principles, formal vs. informal.
● Management: Definition, functions, levels, qualities (partially
covers skills).
● Theory of Management: Scientific and Administrative
Management.
● Forms of Ownership: Joint Stock Company, Co-operative
Societies.
● Organizational Structure: Committee Organization.
● Purchasing and Marketing Management: Purchasing (definition,
functions, methods), Marketing (definition, functions, importance,
including advertising as a function).
