In the Stone Age society, people stayed much the same for thousands of years, in the middle age, for a few hundred years, in the industrial revolution for ten or twenty years. But today, it is seen significant changes in our society brought about by technological advancement, social alternations, economic influences and political pressures. Since change is inevitable, change may assume a variety of forms, each with its unique problems. The new organizations of post-industrial society will be temporary which will emerged adoptive, rapidly changing, ad-hoc structure manned by members of techno-structure who owe allegiance not to the company but to the professional association. We find mob-centric managers who is in tune with high mobility between organizations to organizations. Change itself is a fact of life but it may be difficult to or edict its direction and intensity (depth) besides, there are too many forces at work to enable us to make prediction that the major changes going on in our society and then attempt to interpret with the knowledge that this is surely a many endeavor.
Rensis Likert is an American Social Psychologist born in 1903 and obtained PhD. in 1932 from Columbia University. Likert believed that the body of knowledge of social science could pave the way to frame a generalized theory of organization and management. He raised a question that why do some managers get better results than others? What do effective managers do that waste time, money foolishly that was dissipative manager do not? How can we measure effectiveness of manager? etc. Likert classifies supervisors in two categories.
- Job Centered
- Employee Centered
The study of human relations in management or administration is the study of worker’s relation with their job, leader and organization. George Elton Mayo (December 26, 1880 – September 7, 1949) was an Australian who spend most of his working life at Harvard University, eventually becoming prof. of industrial research in the Graduate School of Business Administration. In this post, he was responsible for the initiation and direction of many research projects, the most famous being the five year investigation of the Hawthorne works of the Western Electric Company in Chicago.
According to the investigation;
- First, Employees is the starting point until the employee is brought into the work environment, nothing happens.
- Second, the work environment is the central focus. The work environment is made up of the job, a worker has the leader who supervises the worker and other factors in the organization.
Related keywords Human Relation Approach
Behavioral Approach is the most important approach in the study of management and administration that has emerged during 20th century. The group which has the greatest influence in the growth and development of this new field, consisted of Chester Brrnard, J. G. March, Herbert Simon, Douglas McGregor, Abraham Maslow, Rensis Likert, Warren Bennis, etc. Behaviorist’s empirical investigation based on systematic and detailed observation in organizations supported by findings of social sciences of human behavior, provided the basis for building uniformities and concepts, which could be utilized by managers for improved practises, instead of relying on personal experience which was often based on insufficient foundation in fact.
Related keywords Behavioral Approach
The term Bureaucracy is derived from the French word Bureau and Cracy. Bureau means desks with drawers and Cracy means the government. Martin Albrow has traced the term “Bureaucracy” back to 1745, when Vincent de Gournay, a French physiocrat, used it to describe the Prussian government. In the eighteenth and early nineteenth centuries, the term was used to describe the type of government in which power resided with officials. The term was used as an additional Aristotle’s typology of governments. Aristotle noted three true forms of government Kingly rule, Aristocracy and constitutional government and three perversions of the true forms – Tyranny, oligarchy and democracy. Bureaucracy was used to represent a forth type of perversion of government.
Fredric W. Taylor (1856-1915) was a mechanical engineer. He joined the Midvale Steel, works as a laborer and rose rapidly to Foreman and later chief engineer. He was afterward employed at Bethlehem Steel, works as a consultant and devoted to the propagation of his idea.
Theoretical View for Scientific Management
To find out the best way of doing things was the essence of the movement knows as scientific management. The central tenets of their approach is that if material rewards are closely related to work effort, the worker will respond with maximum performance if he is physically capable of Taylor essentially paid attention to the physical character of the human body in routine job in using hammer, pick up loads. Eventually Taylor come to view human and machine resources as complementary to one another. Motivation, division of work, responsibility, good salary, time and motion study are the
Related keywords Scientific Management Theory
Fiscal Policy: Concept
Governmental financial policies and operations, concerning the raising and disbursement of funds, influence the economic behaviors and activities, and so the national income, employment, income distribution, price situation, international trade, etc. This realization has led to make deliberate adjustments in governmental income and expenditure policies and programs to attain the economic objectives. Such an adjustments is called the fiscal policy. So fiscal policy is concerned with the adjustments in the operation of the treasury to solve and attain economic problems and objectives.
Planning Programming Budgeting System: Background
The traditional budgeting system (i.e. the Line-Item and Incremental) has been unsuitable and ineffective in the effective utilization of limited governmental resources as well as in the context of planning. There are some shortcomings or weaknesses of the traditional budgeting system as follows:
- emphasize on the objectives of control and accountability rather than allocation of limited resources on programmes and projects;
- provides information on the objects of expenditures, not the objectives of expenditure;
- does not help in analyzing and assessment of the impact of budget on the economy;
- emphasize on the incremental approach without due consideration of the necessity;
- emphasize on the financial performance rather than the physical;
- does not relate the current expenditure with the future budgetary repercussions
Concept and History of Budgeting
Governments undertake different social, economic and political activities and policy measures, which involve finance. The mechanism to manage financial resources for this can be termed as budgeting. Government budget is the nerve center of the public economy. The word budget has been derived from the French word ‘bougette' which literally means a leather bag containing financial proposals of
Debt Management: Concept
Debt management is concerned with the determination of the structural characteristics of public debt. They are the size, types, proportions, terms, maturities, ownership patterns of public debt and the methods of its redemption. Debt management should help to achieve the economic objectives and should not have adverse effects on the economy.
Debt management even being a part of fiscal policy, should be well coordinated with the monetary
The burden is interpreted as financial or direct and real or indirect. Increase in tax level transfers some income of people to government, and the loss in income of people is the financial or direct
Governments may raise public debt from both the internal and external sources. The effects of public debt are determined also by the sources and its size. The sources of public debt are as follows.
A. Internal Sources
- Individuals and Private Organizations - Individuals and private organizations provide loans to government with the purchase of securities like bonds and treasury bills. They provide loans reducing consumption, diverting savings accounts and corporate securities, and out of the funds that would remain idle. This source of debt normally does not exert inflationary pressure, except that from the idle funds, as there will be just a transfer of purchasing power from public to the government and no more money supply.
Public Debt: Concept
The practice of raising public debt by the state to finance government expenditure started only since 19th. Century. But the royalties used to borrow on their personal goodwill even since ancient times. These days government borrowing has been almost a normal method of financing government expenditure.
J.L.Hansen, “Public debt is the debt owned by a government to people and institutions within its own borders and/or to foreign creditors.”
Philip E. Taylor, "Government debt arises out of borrowing by the treasury from banks, business organizations and individuals. The debt is in the form of promises by the treasury to pay back the holders of these promises a principal sum and interest on the principal."
Public debt is raised internally by floating the securities like bonds and treasury bills, and overdrafts
Concept of Public Expenditure
“Public expenditure refers to the expenses of the public authorities – central, state and local governments – either for protecting the citizens and/or for promoting their economic and social welfare.” - Sundharam and Andley.
“Public expenditure refers to the expenses which the government incurs for its own maintenance as also for the society and the economy as a whole. These days governments are also incurring expenditure to help other countries.” - Bhatia.
There are two schools of thoughts or attitudes in relation to the scope of public expenditure. The first is led by Adam Smith and other by classical writers restricted state activities to mainly the primary functions. Adam Smith has pointed out ‘the sovereign has only three duties: protecting the society from violence and invasion from other independent societies; establishing the exact administration of justice; and erecting and maintaining certain public works and certain public institutions.'
J.B.Say said, “The very best of all plans of finance is to spend little.”
H.Parnell says, “Every particle beyond which necessity absolutely requires for the preservation of social order and for protection against foreign attack is waste and unjust oppressive imposition on the public.”
The second school of attitude after 1880’s did not restrict public expenditure only to the primary functions. Writers like Pigou, Dalton advocated public expenditure on social welfare activities. Similarly, after 1930’s depression, writers like Keynes advocated for state role to control economic fluctuations for maintaining economic stability in the developed countries. Prof. Musgrave advocated public expenditure for the activities such as: reallocation of resources, redistribution of national income and wealth, stabilization of economy, and some necessary commercial activities.
The basic objectives of taxation is to generate maximum potential revenue with desirable effects on the economy. For this, the tax system should be based on sound objectives and policies along with overall effective tax system. Due and Friedlander are of the view that a sound tax system should have the following characteristics:
- Equality in the distribution of the tax burden
- Productivity of the tax-system generating adequate revenue along with encouraging production in the economy
- Appreciation of the rights and problems of the taxpayers and
- Adaptability of the tax structure to meet the changing needs of the economy.
Taxes will have significant effects upon the economic behavior of individuals and functioning of the economy as a whole. This fact must be well considered in designing and execution of the tax structure and policies in a way so that there will be positive or desirable effects, and avoid undesirable or adverse behaviors in achieving the economic goals of the society. And also, the burden of taxes must be distributed among the people in a manner consistent with these goals. The goals accepted for optimum level of economic welfare in a liberal society are:
- Maximum freedom of choice consistent with the freedom of others
- Optimum level of living standard in terms of available resources and technology in consistent with the consumer and factor owner’s preferences and
- Distribution of income in conformity with the standards of equity currently accepted by the society.
Principles of taxation refer to the appropriate criterion for designing and executing the tax structure and policies. Adam Smith was the first writer to prescribe the principles of taxation in the form of canons of taxation. Later writers added some more canons. The canons of taxation are basically accepted as the general guiding principles of over-all tax system. The four canons of taxation advocated by Adam Smith were:
1. Equity: The burden of taxes should be distributed among the people in an equitable way. “The subjects of every state ought to contribute towards the support of the governments nearly as possible in proportion to their respective abilities, that is in proportion to the revenue they enjoy under the protection of the state”.
2. Certainty: The amount, time and mode (procedure) of tax payment should be certain.
3. Convenience: The time and mode of tax payment should be convenient to the taxpayers.
4. Economy: The cost of collection of taxes should be minimized as far as possible.
Later other writers like Bastable added other canons beside that of Adam Smith. They are:
5. Productivity: The tax system should be able to yield enough revenue so that government may not be forced to resort deficit financing, and also promote productivity of the economy.
6. Flexibility: The tax structure needs to be revised as per the need of the economy and the treasury.
7. Simplicity: All provisions and terms related with tax system must be clear and simple so that even a common man can understand, and not have ambiguities.
8. Diversity: It is necessary to have a wide range of taxes to avoid the chances of possible ill-effects some taxes as well as to generate maximum potential revenue.
Besides these canons, principle of taxation is mainly concerned with the distribution of the burden of tax on people (taxpayers) in an equitable way as accepted by the consensus of the society. Equity in the tax system refers to horizontal and vertical equity. The horizontal equity refers to equal treatment to the equals. The vertical equity refers to relative or discriminatory treatment to the unequals, There are two principles of taxation to maintain equity in taxation. They are the Benefit-received and Ability-to- pay principles.