Chapter – 4

Business Administration of

The Spiritual Centers (Sansthans)

4.1 Business: Any Business activity that generates the economic opportunities can be categorized in to two sectors, the first being the “Manufacturing Sector” and the second being the “Service Sector.”

 Manufacturing Sector:

The firms engaged in the business of producing - buying - selling the products.

 Service Sector:

The firms engaged in the business of providing the services are the “Service Organizations”.

It is absolutely immaterial whether it is a company, a corporation, partnership, or has any such formal organization, but it can either be a street peddler or the big Multinational Corporate Entity.1

The Spiritual Centers (Sansthans) being the organizations engaged in the activity (function) of service providing has been considered as the „Service Sector‟.

4.1.1 Forms of business

The business can be developed in many ways taking into account the involvement of the promoters, the requirement of the capital, the motive of profit or not for profit and so on. Based on these facts a Business can broadly be described into various forms which are as follows ---

 Sole proprietorship  Partnership  Corporation  Cooperative  Franchises  A company limited by guarantee  A company limited by shares

1 https://en.wikipedia.org/wiki/Business browsed on 22 June 2018. 129

4.1.2 Classification of Business

The business can be broadly categorized and classified as under –

 Agriculture  Financial services  Entertainment  Industrial manufacturers  Real estate  Trading  Transportation  Utilities

4.1.3 The major factors affecting how a business is organized are usually:

The size and scope of the business firm, its structure, management and the ownership, broadly analyzed in the theory of the firm. Generally, a smaller business is more flexible, while larger businesses, or those with wider ownership or more formal structures, will usually tend to be organized as corporations or (less often) partnerships. In addition, a business that wishes to raise money on a stock market or to be owned by a wide range of people will often be required to adopt a specific legal form to do so.

Private profit-making businesses are different from government-owned bodies. In some countries, certain businesses are legally obliged to be organized in certain ways.

Different structures are treated differently in tax law and may have advantages for this reason.

Different business structures may be required to make less or more information public (or report it to relevant authorities) and may be bound to comply with different rules and regulations.

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4.2. Non Profit making Organization A non-profit organization (NPO) is an organization which comes under the Service Sector. A non-profit organization (NPO) is one which is not driven by profit but by dedication to a given cause that is the target of all income beyond what it takes to run the organization2. Non-profit organizations are often used for trusts, cooperatives, advocacy and charity, environmental and religious groups.

Many but not all NPOs have paid staff in management positions; almost all use volunteers. NPOs have no owners for surplus profits to go to and any surplus after operating expenses are used to further its goals instead of being distributed between members or employees of the organization. For an NPO to qualify as a government-recognized and tax-exempt organization it has to fulfill conditions set out by government agencies. In the United States, the IRS determines the validity and tax status of NPOs. NPOs often rely on the dedication of employees who believe in their cause because it‟s hard for them to compete with private sector wages. On the other hand, executive salaries are often quite high as a means of competing with equivalent positions in the private sector.

Funding can be an issue for non-profits as they often rely on external sources, such as donations. Scrupulous accounting, transparency and accountability are essential to continuation of operations, as mismanaged or misdirected funds could result in the loss of funding from both public and private sources and loss of status.

The terms NPO and NGO (non-government organization) are also often used interchangeably but they are different. NGOs are separate from government and require no government council but depend on the government for funding. However, most NGOs are also non-profit organizations. The terms of nonprofit making organization would be different, as it differently focuses the various aspects of NPO. Some of the NPO‟s usually focus its Functions and Features,

2 https://whatis.techtarget.com/definition/non-profit-organization-NPO Browsed on 22 June 2018. 131

while the others focus on its objectives and Missions. The concept of “nonprofit” can be better understood from -

Taxation perspective - The NPO is an Organization that enjoys the special tax status as well as the status of an organization not distributing any profits.

Functional perspective - An organization engaged in performing the public tasks such as protection of the environment, social service providing, and an organization also engaged in performing the tasks for which there is a great demand from the society but at the same time there is no supply from the “organizations for profits” and also no supply at all from the government, such as Religious activity, Art and Museum etc. So, it is clear from the above mentioned different perspectives that, the NPO‟s are definitely not formed for the purpose of profit making, meaning thereby the NPO‟s are not commercially motivated and also not committed to distribute the profits to the different stakeholders of the NPO. The NPO‟s are on the other hand formed with the very basic objective of serving the common public. In nut shell the NPO is a self governing and voluntary type of organization operating for the benefit of the public.

4.2.1 Other terms popularly used for NPO

. Independent Sector . Nongovernmental Organization . Third Sector . Nonproprietary Organization . The Commons . Voluntary Sector . Peoples Organization . Charitable Sector . Civil Society . Community Organization

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4.2.2 Why Non profits?

According to the Economic Theory, there emerge and establish the NPO basically due to the following reasons more specifically which can be described as either due to the Market failure or due to the Government failure.3

4.2.2.1 Formation of NPO due to the Market failure –

The kind of services offered and the types of services provided to the society in general are managed mostly by the “Not for Profit organizations” simply because the “For Profit Organizations” are usually not interested in such social activities. It is because such social activities are not generating any revenues and obviously such activities do not enjoy any economic and financial potential for the organization engaged in such activities. Rather it is worth to mention the fact that neither any organization without a profit motive can establish on its own nor can it have the strong success in the future. An organization can be formed with an intention to serve the society purely on not for profit basis but it will have to face the evils of the financial stability on account of “Market Failure”.

4.2.2.2 Formation of NPO due to the Government failure –

A very high cost structure along with very limited response by the public are the main reasons why the Government is not interested in providing the services to the public. In the absence of the large part of the population demanding the services, the Government is unlikely to enter the service providing area to the common public. In such a situation a small group of individuals form an organization not for profit to provide the services to the public. The Government usually does not prefer to involve into the activity of service providing to all the community. The community at the same time also assumes the reluctant approach of the Government in the active participation of the service providing in each and every aspect of the society. This situation gives the booster dose to the process of formation of the NPO.

3 www.learningtogive.org/resources/npo 133

4.2.3 Features of NPO • Special Tax Status is enjoyed.

• The profits (if any) are not distributed.

• Focus mostly the Social Activities.

• Serves the common public and not to generate the Revenue.

• Self Governing voluntary organization.

4.2.4 Area of working of NPO • Promotion of education for women, children and the deprived sections of society.

• Arrangement of Food for the hungry and needy.

• Pollution control and the Environment Protection.

• Promotion of health services.

• Water Conservation.

• Protection of the depletion of the Natural Resources.

• Protection of human rights and to fight against its violations.

• Rehabilitation of the victims of the displaced people due to the development projects

• Plantation of the trees.

• Disposal of the wastes.

4.2.5 Advantages of NPO • More Human Face to it.

• Much effective as it is Volunteer based. 134

• The Team of expert Volunteers.

• Field based development activity.

• Commitments for the fairly long period of time.

• Present where the Government is unable to reach.

• Low cost structure.

4.3 The „Spiritual Centers (Sansthans)‟

In a country like India, having a multi- dimensional culture and multi- religious background the existence and widespread growth of the Worship centers is obvious in nature. Here the researcher has classified the worship centers into two broad categories viz. Deosthans and Sansthans.

4.3.1 Deosthans:-

A worship center in the form of the Temple of the “Deities”, God and Goddesses is categorized as the “Deosthans.” The Deosthans are the worship centers where the “Antiquated Deities” are worshipped.

The most of the Temples in India especially the Hindu Temples are dedicated to Lord Shiva, Lord , Lord , Lord Vishnu, Lord Krishna, Lord , Goddesses Laxmi, Saraswati, Durga, and Kali. It is believed that, there are in all 33 Crore Gods in the Hindu Religion. It is also believed that the number 33 crore Gods was the actual total number of the known population of the human beings on the planet earth. This kind of belief is in line with the overall Hindu belief that, there exists “God” in every human being.

Few of the highly worshiped deities have been mentioned in „the list of Hindu Deities, God and Goddesses‟ 4 (Please refer Annexure III) and the referred list is incomplete and hence inclusive also.

4 www: godchecker --- list of hindu deities

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One thing is absolutely sure about the Deosthans is that the Deities, God and Goddesses being worshiped in such worship centers / temples are never or have never been physically seen, and experienced by any human being at any point of time on this Planet Earth. To a great extent, such Deities, God and Goddesses are the very famous, very highly respected and faithfully worshiped “mythological” characters in the Cultural Environment of India

4.3.2 Sansthan:-

A Worship Centre in the form of Temple, Place of Birth and Samadhi Mandir of the “Spiritual Gurus (Maharaj)” having a status of the "Deities “are categorized as the Sansthans. Spiritual Centers (Sansthans) act as a Centre for the fulfillment of Desire of the Devotees scattered not only all over the country but also scattered all over the Globe. In a way such Sansthans can be described as a "Power Centre" in modern era for the Peace, Satisfaction and Solace. The Spiritual Centers (Sansthans) are engaged in giving the satisfaction, building the confidence, generating the power among the Visitors- Devotees - Volunteers, on a regular basis, with a very smoothness right from the existence of the Spiritual Guru's till date.

There are almost 1855 (Please refer Annexure IV) notable, respectable, and more importantly influence able known personalities in the Cultural Environment of India, which have been mentioned in the referred list.

One thing is sure again about the Sansthans, as opposed to the Deosthans, the each and every Spiritual Guru / Maharaj were actually seen and experienced by many human beings, in a “HUMAN AVATAR” at a particular point of time, somewhere or the other place on this “Planet Earth”.

5 www. wikipedia/ list of hindu gurus and saints browsed on 6-2-2017.

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4.4 Spiritual Centers (Sansthans) as NPO

The Spiritual Centers (Sansthans) being the registered trusts are the organizational set - up for the charitable purpose. This organizational set – up is an attempt for satisfying the basic needs of the visitors and devotees at the Spiritual Center (Sansthan) without any intention of making any profits. The distribution of the food either at a concessional rate or absolutely free of cost, the accommodation facility at a cheaper and affordable rate as compared to the Private Service Providing Organizations underlines the fact that the Spiritual Centers (Sansthans) are the “Not for Profit Organizations (NPO)”. The features of the NPO such as enjoying the special tax status, involvement in social activities, intention not to generate revenue and make any profits but to serve the common public support the above statement that the Spiritual Centers (Sansthans) are the “Not for Profit Organizations (NPO)”. Similarly the area of workings of the NPO such as arrangement of food for the needy and hungry, promotion of the education for the deprived sections of the society, promoting the health related services, protection of the environment (cultural at least one can say), plantation of the trees, and most importantly shaping all the above mentioned activities through the fleet of expert – devoted – motivated – and committed “Volunteers” again strongly supports the above statement that the Spiritual Centers (Sansthans) are the “Not for Profit Organizations (NPO)”.

4.4.1 Activities of the Spiritual Centers justifies that it is “NPO”

Let us consider the functions and activities in the different areas by the Shree

Gajanan Maharaj Sansthan, Shegaon6 as a reference to highlight the fact that the

Spiritual Centers (Sansthans) are the “Not for Profit Organizations (NPO)”.

6 www.gajananmaharaj.org 137

• Daily Food Distribution to almost 45, 000 people (Approx)

• Volunteers working 9, 000 (5, 000 Reserve)

• Distribution of Musical sets 16, 823

• Ayurvedic Treatment to 25, 29,384 patients.

• Homoeopathic Treatment to 43, 52 871 patients.

• Allopathic Treatment to 88, 37, 803 patients.

• Optometry Treatment to 13, 642 patients.

• Handicapped Rehabilitation of 6, 172 patients.

• Plantation of 2, 25, 000 Trees (Approx)

The valuable contribution by the Spiritual Center, Shree Gajanan Maharaj Sansthan, in the social activity, food distribution, medical facilities itself justifies the fact that the Spiritual Centers (Sansthans) like “Shree Gajanan Maharaj Sansthan” Shegaon, are the “Not for Profit Organizations (NPO)”.

4.5 List of the Business Activities of the Spiritual Centers

It is evident from the “Organizational Structure” of the Sansthan, that they are typically engaged in the Business Activities as per the systematic set-up of the various “Departments” formed exclusively for the satisfaction of the needs of the Visitors and Devotees at the Spiritual Centre. The heavy volume of the Visitors and Devotees at the Spiritual Centre, on a regular basis calls for the various basic needs to be satisfied by the Sansthan as such. This initiative by the Sansthan in the satisfaction of the very basic needs of the Visitors and Devotees takes the shape of the “Activities” carried on by the Sansthan. And as the Sansthan is generating the revenue from such activities, the same have been indentified and named as the “Business Activities” consisting of the service providing in the area of- * Food,

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* Accommodation, * The spiritual publication, * Parking, * Transportation facilities, * Medical facilities, * Education, * Entertainment etc.

Almost all the Spiritual Centers arrange and provide for the above mentioned very basic needs of the Visitors and Devotees at the Spiritual Centre. As far as the Spiritual Centers for the present research are concerned these basic needs of the Visitors and Devotees are taken care of by the concerned Spiritual Centers through the systematically set-up Departments at the Spiritual Centers.

4.6 Need of the Business Activities of the Spiritual Centers

Any Organization, necessarily - directly or indirectly creates various Avenues or opportunities in and around itself. Such Avenues or Opportunities happen to be the reason for the emergence of various Businesses in the service sector around the Sansthans. Here, as far as the Spiritual Centers i.e. Sansthans are concerned, there is a huge and continuous flow of the visitors and the devotees for the worshiping of the Spiritual Guru /Maharaj at the Spiritual Centre. Merely the existence of the Spiritual Center creates the huge opportunities in the service sector at the so called S.M.S. (Service Model around the Sansthan). The heavy volume of the visitors and the devotees results in the fulfillment of their basic needs like ---

* Water and eatables,

* Arrangements of the Accommodation,

* Offering materials like Sweets, Flowers, Pooja materials,

* Parking and Transportation facility,

* Availability of the spiritual materials,

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* Medical facilities,

* Entertainment,

* Education etc.

The “Huge Crowd” at the Spiritual Centre on a regular basis itself justifies the need of the Business Activities (in the form of Service providing) by the Spiritual Centers (Sansthans). The daily gathering of the masses at the different Spiritual Centers as mentioned below clearly underlines the great need of the Business Activities (in the form of Service providing) by the Spiritual Centers (Sansthans).

Shree Gajanan Maharaj Sansthan, Shegaon -

There are more than 45,000 Visitors and Devotees on a daily basis. Generally, the volume during the “Special Events”, „‟Festive Seasons” and on weekends typically ranges in between 1, 50,000 to 1, 75,000 per day.

Shree Sai Baba Sansthan Trust, Shirdi -

The Visitors and Devotees to the extent of 50,000 are daily visiting the Sansthan, and the number of the same goes to 3,00,000 to 5,00,000 Visitors and Devotees during the Special Events, Festive Seasons, Holidays and weekends.

Chaitanyopasana Shree Sadguru Bramhachaitanya Maharaj Gondavalekar Sansthan, Gondavale -

The Visitors and Devotees to the extent of 2,000 are daily visiting the Sansthan, and the number of the same goes to 4,000 to 5,000 Visitors and Devotees during the Special Events, Festive Seasons, Holidays and weekends.

Shree Annachhatra Mandal, Akkalkot -

There are more than 20,000 Visitors and Devotees on a daily basis. Generally, the volume of the Visitors and Devotees during the “Special Events”, “Festive Seasons” even goes beyond the above mentioned figure.

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4.7 Classification of Business Activities of the Spiritual Centers 4.7.1 Revenue without any Activities:-

While observing the Spiritual Centers (Sansthans) carefully, an interesting point was noticed that, where generally no one can get anything, especially in the economic and monitory terms without doing something in this world, but the Sansthans were observed as an excellent exception in this regard.

The Spiritual Centers (Sansthans) in a way came out as an interesting example of getting the huge economic and monitory benefit by generating huge and more importantly the regular source of income by way of the „Offerings‟, into the Vessel i.e. the offering box kept at the Spiritual centers for collecting the voluntary offerings by the Visitors and the Devotees. An important point should be noted here that, the „Offerings‟ are purely the offerings on the voluntary basis and which is offered without leaving behind any clue of the Donor. In a way it is a secret kind of an offering by the Visitors and the Devotees, as against the usual, regular, formal kind of an offering by the Visitors and Devotees at the official counter of the Sansthans, in the form of „Donations‟ which leaves behind the whereabouts of the Donor, and also the official Accounts and Records are maintained for the same and thereafter an official „Donation Receipt‟ is handed over to the „Donor‟.

4.7.2 Revenue with the Activity:- Sansthans, being the Trust are offering or rendering various services to the Visitors and Devotees, of course by charging either at a concessional rate or at normal or whatever rate, but are generating revenues and making monies out of it. This activity of the Sansthans must be considered as a regular and usual service providing activity of the Sansthan. The Sansthans are engaged in running the said activity of providing the services so smoothly and professionally, it seems that the

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Sansthans are not only the Spiritual Organizations, but also the neatly managed Service Organizations. The balancing of the Spiritual Activities along with the Service providing activities of the Sansthans is just amazing and professional and that is why only such Sansthans can also be identified as or described as the “Service Organization.”

4.8 Organizational structure of the Spiritual Centers

Basically, there are two major components of the Service Model around the Sansthan (S.M.S.), the Sansthans being the first and the other Private Service Providing Organizations operating around the Sansthans being the second. The Sansthans are providing various facilities and the amenities to the Visitors and the Devotees in large numbers, and more importantly on a regular basis. In this regard, it is also observed that the Sansthans are capable of arranging such facilities very neatly and smoothly. Here the Sansthans can be described surely as a “Service Organization”. Being the service organization the Sansthans have developed a very systematic departmental setup in order to look after the proper service providing to the Visitors and the Devotees. Majority of the facilities and amenities like food, accommodation, parking‟s are provided to the Visitors and the Devotees by the Sansthans in the capacity of a service organization only. In the Sansthan there exists a systematically developed “Organizational Structure” consisting of the various “Service Departments such” as ---

* Accommodation Department

* Food Department

* Publication Department

* Other Services Department ((Health, Parking, Security, Education)

Even though, these departments works under the Sansthans as if, it is a Service Organization, these departments performs independently of each other. There is absence of any official and formal link in between these service departments making it an „Informal Organizational Structure‟. But, at the same time, a kind of interdependency can be observed at informal level, making it a „Matrix 142

Organizational Structure‟. Along with the Sansthans there is a very strong presence of the Private Service Providing Organizations in the Service Model around the Sansthan (S.M.S.). For instance a Devotee may prefer the food in Sansthans Prasadalaya, but may prefer the private lodging facility outside the Sansthan, but in the Service Model around the Sansthan (S.M.S.). Such interdependencies usually take up the shape of „Informal, but Matrix Organizational Structure‟ at the Service Model around the Sansthan (S.M.S.).

Figure No. 4.8 Organizational Structure of the Spiritual Centre

Board of Trustees

Service Executive Officer Departments

Accommodation Food Publications Other Services

Head / Manager

Asst. Manager

Supervisor

Employee

Other Services

Health Education Parking Security 143

The Sansthans are engaged in providing various facilities to the Visitors and the Devotees in large volumes visiting the Spiritual Center regularly and on a continuous basis. While providing the facilities to the Visitors and the Devotees, the Sansthans are doing nothing but trying to fulfill the very basic needs of them. The element like the regular as well as smooth handling of the huge crowd in providing the services, somehow portraits the character of the Sansthan as a Service Organization. The Sansthans peculiarly engage themselves in arranging the facilities for the Visitors and the Devotees through various Departments such as ---

* Prasadalaya, (arrangement of food/Prasad)

* Bhakta Niwas, (arrangement of accommodation facility)

* Publications, (arrangement of the spiritual material)

* Other Services (Health, , Parking`s, Security, Education)

The above Departments constitute the basic „Organizational Structure‟ of the Sansthans. Basically the departmental activity having the very popular identity and nomenclature „Prasadalaya‟ is the activity of distributing the „Prasad‟ which is a token of blessing of the Spiritual Gurus (Maharaj) received in the form of Food e.g. Laddu, Khichadi, Bhaji-Bhakri etc.‟Prasadalaya‟ is a place where the „Prasad‟ is distributed to the visitors and devotees. Similarly the „Bhakta Niwas‟ is a Residential facility or an accommodation made available by the Sansthans to the Visitors and Devotees. The Spiritual atmosphere is generally created through the „Publication‟ of the Spiritual Materials, in the form of print media and the audio- video media. The allied and ancillary activities like Medical facilities are taken care of under the „Health Department‟. The Sansthans are also running the „Educational Institutes‟ and are successfully providing the school level and higher level Educational Programs. Handling the large volume of the Visitors and the Devotees necessarily invites the handling of the „Parking`s‟ facility for their vehicles. The Organizational Structure of the Sansthan is divided into such Departmental activities engaged in providing the department specific services to the Visitors and the Devotees. Each Department has its own Levels and performs 144

various Operations at every level. In this regard it appears to be purely a professionally managed „Service Organization‟.

4.9 Administration and Management

The word “Manage” has its origin in the Italian word as “Maneggiare” which means “To handle” which in turn has been derived from the two Latin words “Manus” (Hand) and “Agere” (to act). The French word “Menagerie” has been derived from “Menager” which means “to keep the house”. Menagerie is the translation of the famous book “Oeconomicus” on the household husbandry.

The term “Management” includes the identification of the “Mission – Objective – Procedures – Rules and the manipulation of the Human Resources” of the organization in the contribution of the success of the organization. The term Management also includes the “Effective Communication” which implies the human “Motivation” in expectation of the successful outcome in the organizational systems. In a way the concept of Management is in no way related to the manipulation of the mechanism as such but it is actually an essential function to improve one's life and relationships. Therefore “Management” can be found everywhere and it has a very wider range of applications too! The measurements and plans, the various motivational as well as psychological tools, the goals and objectives, and more importantly the economic measures like Demand, Sales, and Profits etc may or may not constitute the essentials of the “Management”. The term management in many cases is viewed more from the functional perspective such as measurement of the quantities, adjustments in the plans and the achievement of the goals. All the above becomes applicable even in the absence of the Planning.

In short it can be said that the “Management” is the process of accomplishing the organizational goals by working with and through people and other organizational resources.

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4.9.1 Nature of Management:

As far as the profitable organizations are concerned the basic function of the Management is to satisfy the variety of stakeholders. This includes mainly making the profits for the shareholders, creation of the products at affordable prices for the customers, the employment opportunity generation for the society. In case of the organization not for profit the weight age is given for keeping the faith of the donors. In most of the models of management and governance the members and shareholders vote for and elect the “Board of Directors” and thereafter the Board of Directors then hires the senior management. Some organizations have applied the other methods like Employee voting for selecting or hiring the managers. But this method of management is very rare.

Generally in large sized organizations there are three levels of the Management, which usually takes the shape of a pyramid. Actually it is a hierarchical set up comprised of Senior Management, such as the Board of Directors, Chief Executive Officer (CEO) or President of an organization. The Senior Management is usually involved in the process of setting the Organizational Goals and the Strategies to achieve the same. The Senior Managers also provides the direction to the middle managers to report to them.

The Middle Management, such as Branch managers, Regional managers and Section managers provides the direction to front-line managers. The Middle Management also communicates the strategic goals of senior management to the front-line managers.

The Lower Management, such as Front-line team leaders as well as the Supervisors look after the work of regular employees or volunteers, in case of the Non Profit Organizations and provide the direction to their work.

4.9.2 Characteristics of Management:

 It is the process of related but continuous activities.  It concentrates on the accomplishment of the organizational goals.

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 It achieves the goals by working with and through people and other organizational resources.

4.9.3 Contribution to the theory of Management:

The concept of “Management” has been in existence for the years. Many management thinkers have created the background of the work which has helped the modern management theories. Few ancient military literatures (“The Art of War” by Chinese General Sun Tzu in the 6th century BO) focusing on the “strengths and Weakness of organization” has also been considered by the civilian managers. The other remarkable example includes “The Atrhashastra by Chanakya 300 BCE” and “The Prince” by the Italian author Niccolò Machiavelli (1515). In the recent past “The Wealth of Nations (1776)” by “Adam Smith” strongly discussed the efficient organization of work through the “Division of Labour”.

Contribution to the Management theory in the 19th century:

The classical economists like Adam Smith as well as John Stuart Mill made a valuable contribution in the field of “Production, Pricing, and Resource Allocation”. During the same period eminent management thinkers like Eli Whitney, James Watt, and Matthew Boulton contributed and developed a lot the concepts like Work Planning, Standardization, Quality Controls, Cost Accounting and Interchangeability of the Parts. Such management aspects existed in the 19th century in the economy of the United States. Millions of people had used the concept of management in the profitable process of mass production. Furthermore, the salaried managers were identified for the first time in the late 19th century.

Contribution to the Management theory in the 20th century:

At the beginning of the 20th century the management thinkers were busy in developing and implementing their management theories having one or the other scientific base. To name few of them such as –

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Management Thinkers and their Scientific Theory of Management

Sr. Management Thinker Scientific Theory of Period No. Management 1 Henry R. Towne's Science of Management 1890 2 Frederick w. Taylor Scientific Management 1911 3 Lillian Gilbreth' Psychology of Management 1914 4 Frank and Lillian Gilbreth Applied motion study 1917 5 Henry L. Gantt' The Chart`s 1910 6 J. Duncan Management-Textbook 1911 7 Ichiro Ueno Japanese Quality Assurance 1912 Table No. 4.9.3

For the first time the Management Degree “Master of Business Administration degree (MBA)” was offered by the appeared in The Harvard Business School. The management thinkers like “Henry Fayol” developed the “Principles of Management” and at the same time the various branches of management and their inter-relationships were described by Alexander Church.

The management thinkers like Ordway Tead, Walter Scott and J. Mooney developed the Principles of Psychology to Management at the beginning of the 20th century.

The other management thinkers like, Elton Mayo, Mary Parker Follett, Chester Barnard, Max Weber, Rensis Likert, and Chris Argyris approached the concept of Management from a “Sociological” perspective.

A very famous management thinker “Peter Drucker” wrote the books extensively on the “Applied Management: A concept of Corporation” (published in 1946). Drucker in total wrote 39 books on management.

Thornton C. Fry, Ronald Fisher and H. Dodge introduced for the first time the “Statistical Techniques” into management-studies. Patrick Blackett in the year 1940 made an attempt to develop a scientific approach in the process of solving 148 the decision-problems, and to apply the same directly to the multiple management problems, particularly in the areas of logistics and operations.

To name few of the latest as well as valuable contributions to the theory of “Scientific Management” such as –

 Management by Objectives (MBO).  Theory of Constraints.  Six Sigma.  Reengineering.  Agile Software Development.(IT – Driven Theory)  Cog's Ladder. (Group Management Theory)

Somehow in the 20th century the Managers started to gain strong recognition, reputation and more importantly the Prestige as the concept of “Management” being practiced either as an Art or the Science, it become more popular system.

At the end of the 20th century, the “Management” was considered to be a process of six separate branches, namely:

 Strategic Management.  Production and Operations Management.  Financial Management.  Marketing Management.  Human resource Management.  Information Technology Management (for M.I.S.)

Contribution to the Management theory in the 21st Century:

The 21st Century is witnessing the subdivision of the concept of “Management” into the various functional categories like “Processes” – “Tasks” – and – “Objectives” which are run simultaneously in the process of management. The management theory extends to that of Governments as well as the Not for profit

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Organizations (NPO) such as Public Management, Public Administration and the Management in the Educational Sector.

It is worth to note that the assumptions of management are targeted and are under pressure from the view points of ethics, the social as well as anti corporate activism and more importantly the critical management studies in the 21st century. Consequently, the democracy at the workplace has the negative impacts of disturbing the management functions among the workers. The management expects a very common democratic principle of “the support of the majority of the workers to the management in the long run” otherwise; the workers have to leave the organization to find other work or to go on strike. In fact the control of the management was evident during the recent layoffs for the employees working at the lower levels. In many cases the top management has been rewarded after the lower level employees lay off.

The process of management is carried out through the basic functions from the different perspectives such as –

Henry Fayol perspective:

The very basic four functions of management, according to Henry Fayol that make up the management process are as follows:

 Planning:

Planning usually includes the selection of the tasks that must be performed to accomplish the organizational goals, defining how to perform the tasks, and more importantly to indicate the exact timings of the tasks to be performed. The activity of Planning usually tries to focus the accomplishment of the goals. The top level management is mainly concerned about the success of the organization in the short term as well as in the long term.

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 Organizing:

The term “Organizing” is concerned with the assignment of the tasks developed in the planning process, to the various individuals and the groups within the organization. Organizing is a mechanism to convert the plans into the action. The tasks and the work assignment are given to the people within the organization so as to contribute into the organizational goals. The tasks are assigned to the individual in such a manner that the output of every individual contributes to the overall success of the departments, which in turn adds to the overall success of the units, divisions that ultimately results in the overall success of the organization.

 Influencing:

Influencing is described as an activity of motivating, leading and directing the individuals as well as the work groups within the organization. Influencing is concerned with the activity of guiding the members of the organization in such a way that, it can help the organization to achieve the basic objective of fulfillment of the organizational goals. The ultimate aim of the influencing activity is to increase the organizational productivity.

 Controlling:

“Controlling” is the process of gathering the overall information that can measure the levels of performance. In the controlling process the present performance is compared with that of the established standards and norms. The process of controlling focuses on the future action plans and the modifications therein for achieving the desired performance parameters. Controlling is a continuous process.

Mary Parker Follett perspective:

Another eminent management thinker “Mary Parker Follett” (1868–1933) very strongly described the process of management as "An art of getting the things

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done through people". She described management as philosophy. This definition of management was accepted by many critics but found the explanation of management in a very restricted manner. The definition “Management is what managers do” is so narrow and it co- relates management with the management practices and management cadres. In a way the management is treated as equivalent to that of the “Business Administration” and thereby excludes the practice of management process beyond the commerce such as charity organizations and the public sector. It is more important that the management process of any organization must “Manage” its people, its tasks and works, processes and technologies to maximize the overall organizational effectiveness. Apart from profitable organizations even non-profitable organizations (NGOs) apply management concepts. The concept of management and its uses are not restricted as such. In a way management is the process of planning, organizing, staffing, leading and controlling.

4.9.4 Basic roles of Management:

 Interpersonal: The Roles focusing interaction-coordination with employees.  Decision: The Roles that requires the ability to make the decisions.  Informational: The Roles that concentrates on the handling, sharing, and analyzing of the information

4.9.5 Management skills:

 Political Skills: To be used for building a power base and establishing the connections.  Conceptual Skills: To be used for analyzing the complex situations.  Interpersonal Skills: To be used for the processes like communication, motivation and delegation.  Diagnostic Skills: To be used for visualizing the appropriate responses for a given situation.  Leadership Skills:

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To be used for leading and to providing the guidance to a specific group.

4.10 Administration and Management of the Spiritual Centers:

4.10.1 General Administration of the Spiritual Centers

Basically every Sansthan is an "Organization" in the form of a “Trust”. Thus each and every Sansthan being a Trust is officially registered under the Bombay Public Trust Act, 1950. In a way a Sansthan has a very typical organizational structure in the capacity of a Trust. The Sansthans has a formal body of its official members which is called as the “Board of Trustees”.

The Sansthan has a Chairman or the Managing Trustee elected by the Board of Trustees. In certain cases the Chairman or the Managing Trustee and the Board of Trustees are appointed by the State Government.7 In a recent development regarding the appointment of a key person in case of certain Sansthan like Shri. Saibaba Sansthan, Shirdi, the Supreme Court has given the orders to the State Governments to make the appointment of the super class- one officer or the Gazatted Officer to take the charge or to look after the affairs of the Sansthans.

Any organization, for its smooth functioning of the operations, follows a set of its own Administrative and Management policies. The Sansthans being the Trust also follows its own Articles and the By-laws where one can get the clear idea about the Administrative and Management Policies.

The gathering of the heavy crowd, that too with a great frequency compelled the Sansthans to enter into the service providing area with more sophistication and more modernization taking into account the increased expectation of the Visitors. Thus an extension of the Spiritual Organizations into the Service Providing area, which is inevitable from the forces of expectations of the Visitors, can be easily observed in the Administrative and Management policies of the Sansthans.

7 Daily Sakal Dated – 18 Feb. 2017 – Shirdi sansthanwar aata sanadi aadhikari.

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4.10.2 HR Management (Recruitment, Compensation)

The Sansthans are usually considered as a big crowd pulling organizations. India, being the highly populated country, and having a very strong tradition and the culture of the “Worshipment” spread across the country, it is obvious that the crowd will take a turn towards the Spiritual Centers. Here comes the crucial issue of the “Crowd management”! The very basic question regarding the smooth functioning and more importantly neatly managing of such a huge crowd at the Spiritual Centers is ---- How do the Sansthans manage the Visitors and the Devotees at the Spiritual Centers on regular basis? The answer to the above mentioned question can be traced out in the Human Resource Management Policy of the Sansthans. The Sansthans are intelligently handling the crowd management issue using the manpower from the following three important sources viz.-

* Regular employee on the payroll of the Sansthan.

* Casual employee on the Contract basis.

* Volunteers visiting the Spiritual Centers.

Using the manpower or the employee on the Sansthans payroll is not an issue of the Research at all. But, using the manpower in the form of the Volunteers in the crowd management and the service providing to the masses, is to a great extent an innovative concept from the HR Policy perspective. Using the Volunteers as a Human Resource can be defined as an innovative practice simply because, ---

-Volunteers are basically the Devotees and not merely the Visitors.

-Volunteers never carry a status of an employee.

-Volunteers are never constant. The duty is constant, Volunteers change.

-Volunteers work for the satisfaction, and not for remuneration or money.

-HR in the form of Volunteers is available free of cost.

-Volunteers being the Devotees give the maximum devotion.

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"The Demand and Supply side of the locally and easily available manpower in the Service Model around the Sansthan (S.M.S.) is also considered in the HR Policy of the Sansthans.

Shree Gajanan Maharaj Sansthan, Shegaon -

The great Faith of the “Devotees” in the Spiritual Guru especially at the Sansthan brings out the Service Motive of the Devotees to serve with a greater degree of Loyalty. Taking into account the huge crowd daily at the Sansthan, has initiated the Sansthan to start and run the “Devotee Service Department” exclusively for serving the large number of the Visitors and Devotees daily visiting the Sansthan. The calm and quiet, the most disciplined and obedient Volunteers is the remarkable feature of the Sansthan. The Volunteers are mentally and most importantly wholeheartedly involved in the services of the Visitors and Devotees at the Sansthan. During the Special Events, Festive Seasons, Holidays and Weekends there is a huge crowd at the Sansthan, and to serve such a huge crowd there are almost 9, 000 Volunteers across the 360 nearby Villages engaged in offering their services to Visitors and Devotees. In addition to this, there is a waiting list of applications of almost 5,000 Volunteers ready to offer their services at the Sansthan. The Sansthan, as per the requirement informs such Volunteers on the waiting list through the letter, and the Volunteers join the services of the Sansthan exactly at a specified date. The Volunteers are basically from the villages in the local area around the Sansthan.

Shree Sai Baba Sansthan Trust, Shirdi –

As on 31st March 2016, the Sansthan has appointed the Permanent category of the on roll employees to the extent of 2,148, inclusive of the 4 Top Administrative cadres (C. E. O, Dy. Chief Executive, C. F. O, and Security Officer) In addition to this the Sansthan has the supportive non permanent workforce or the Casual Workers (not on the pay roll of the Sansthan) for the last three years was as under

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HR Policy of hiring Casual Employees at Sai baba Sansthan, Shirdi

Sr.No. Total 2014 2015 2016

1 Semi skilled casual workers 1,169 1,475 1,573

2 Security workers 606 743 751

Total 1,775 2,218 2,324

Table No. 4.10.2

4.10.3 Marketing Management (Organizing the Special Events)

As a part of Tradition, several special events and functions are organized by the Sansthans annually. Such special events and functions usually celebrated at the Spiritual Centers can be enumerated as under--

* Prakat Din.

* Nirwan Din/ Punyatithi.

* Guru Pournima.

* Ram Navami.

* Palkhi etc.

These special events and functions are the important elements in the Cultural environment of the Spiritual Centers. Such special events and functions are the strong foundations upon which the faith, values and beliefs are developed around the Spiritual Centers. Here, what generally observed is the great resemblance of such special events and the functions with that of the “Event Management”, which is a popular and very widely used concept in the field of management, especially in the “Marketing Management.” The grand celebration style of the Sansthan of the special events and functions usually attracts a huge crowd towards the Spiritual Center. What generally observed is the fact that the response to such

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special events and functions, of the Visitors in general and the Devotees in particular is so overwhelming, there is attached automatically a reputation of a Grand Celebration. The crowd is at its peak, the Bhakta Niwas are usually fully occupied by the Visitors and the Devotees, the demand for the “Prasad” which is a token of blessing of the Spiritual Guru's, is the maximum, the demand for the Offerings like flowers and the pooja material is also at its peak. A kind of the atmosphere, full of the spirituality content is deliberately created by the Sansthans taking in to account the faith, value and belief of the devotees.

This kind of style of a grand celebration of such events and functions points out the fact that there is a best utilization of the Modern Marketing Strategies in the form of “Event Management” which are being followed by the Sansthan at the Spiritual Center.

4.10.4 Financial Management (Revenue Generation)

Basically, in the past the Sansthans in the capacity of a Trust were already trying to satisfy the very basic needs of the Devotees like Prasad in the Prasadalaya and the accommodation in the Bhakta Niwas. But with the changing times, the response and the flow of the crowd started turning towards the Sansthans tremendously, thereby compelling the Sansthans to expand their basic need satisfying activity to the service activity. Again with the passage of time, the overwhelming response of the Visitors and the Devotees towards the Sansthans that to, on a regular and repetitive basis totally changed the character of the Sansthans. In a way it was an expansion or the extension of the identity of the Sansthan. Without losing the character and the identity of the Spiritual Organization, the Sansthans started gaining the character and the identity of the Service Organization. Here, an important point should be taken in to account, that the Sansthan itself and the other Private contributors of this Service Model which provides various services and facilities to visitors and make some kind of business in the service sector has a “Significant Financial Turnover.” The Service Model around the Sansthan (S.M.S.), comprising of the Sansthans itself along with the Private Service Organizations are actually generating the huge revenues by

157 serving the masses, and more importantly on a regular basis. The huge population of the country, the presence of strong cultural environment in the country, the growing trend of spiritual tourism, results in gathering the huge crowds at the Service Model around the Sansthan (S.M.S.). Even a single visitor is considered, visiting the spiritual center only once, there is generated a series of basic needs what the visitor is generally looking for. This type of the very basic needs of a single visitor, like water, food, shelter, transportation etc. once only, creates a momentum in the economic environment in and around the Sansthans. Now, if the visitors are in thousands a day (eventually in lakhs also), and more importantly on a regular basis, there must be essentially a very significant financial turnover in the Service Model around the Sansthan (S.M.S.). Furthermore, this kind of significant impact on the financial turnover can be observed more and more in the Service Model around the Sansthan (S.M.S.) during the times of ----

* Weekends and Holidays.

* Festive Seasons.

* Special events like Prakatdin, Nirwandin, Gurupournima, Palkhi etc.

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4.11 Service Organization:

The firms engaged in the business of service providing are the „Service Organizations‟. The Service sector has significantly grown over the last two - three decades all over the world. India, being a highly populated country is not an exception to this. Any economy that provides ample employment opportunities can be categorized in to two sectors, the first being the „Goods producing sector‟ and the second being the „Service providing sector‟. The goods-producing sector includes Manufacturing, Agriculture, Construction, Fishing, Mining and Forestry. The Service sector includes the following different Organizations engaged in providing variety of services ---

 Banking and Finance

 Insurance

 Real Estate

 Wholesale and Retail Trade

 Transportation

 Communication

 Education

 Healthcare

 Hospitality

The economies generally tend to prefer a progressive trend either in the Agriculture or in the Manufacturing sectors. There is a heavy reliance of the economy for the employment generation in these two sectors. This is because both the Agriculture and the Manufacturing sectors have the output that easily finds either the Domestic Market or the huge International Market. But the changing needs and requirements of the masses in the modern era call for a dominant role to be played by the organizations in the Service sector. The lower

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cost structure, the reliability and the speed of the communication and transportation, has made the Service Sector the most intensive and competitive sector in the economy. In a country like India the „Service Organizations‟ engaged in service providing has been considered as the soft part consisting of the services like Banking, Insurance, Transportation, Communication, Education, Health and Hospitality services.

The Service Sector in India today contributes more than half8 in the India's total Gross Domestic Production (GDP) which is more than the combined contribution of both the sectors that means to say the Agriculture sector and the Manufacturing sector. This shows the significance of the service industry in the Indian economy and this parameter of contribution to the GDP is taking the economy of the country closer to that of the basics of the developed economy. The super growth of the Service sector has been observed especially in the nineties and onwards after the „Liberalization‟ in the regulatory framework. As far as the current economic scenario is concerned it appears that such a boom in the Services sector will continue to stay here as India is very strongly emerging as global services hub with a great speed.

The super growth in the Service sector in the last three decades has prompted few very basic questions associated with this sector of the Indian economy and the reasons for such an upward trend for the same. Some of the questions regarding the super growth of the overall Service sector include ---

 What are the trends in the growth of the service sector in the Indian economy?

 What are the possible reasons behind such a growth?

 What is the service sector and what types of businesses operate in it?

 How is the service sector affected by recessions in the economy?

 What are the Human Resources issues associated with the Service sector?

4.11.1 Growth in the Service sector:

8 Cambridge Business English Dictionary 160

The Service sector in India has employed more individuals than in the Manufacturing sector or the Government sector. The three types of industries within the overall Services sector has experienced the major growth in the last two or three decades have been as follows ---

* Business services

* Health care

* Social services

Business services:

The Business Service is the area wherein the large numbers of employment opportunities are found. This Business Services has been further classified in to Computer Services and Personnel Supply. The Computer Services includes Software Production, customized software programming and customized computer systems designing. The Personnel Supply service includes the traditional Employment Agencies, and other firms engaged in the supply of labour to other companies. The main reason for the growth in these areas has been the changes in the overall business processes.

Health care:

The Health care services have also been engaged in opening the major source for the employment opportunities in the economy. The Medical Practitioners, Nursing and personal care centers, Hospitals and the Health care centers comes under the Health care services that offer the major employment. The main attributes for the increase in the Health care services are linked with that of the more advanced, more sophisticated and technologically advanced medical procedures and practices. The increased number of senior citizens and the old aged persons in the country requires more health care.

Social services:

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It is the third industry that has also gained the maximum employment in the area of the Social Services. The Social Services covers management and Engineering Services, Educational Services, Family Services like residential care – children care – care for the elderly.

The reason for the overall growth in the Service Sector has a direct link to the broad economic developmental aspects related to the services such as increased activities in Construction and the changes in the technology. Development of the construction industry brings more demand for the Survey, Landscape, Architecture, and the Engineering related services. Along with this the improvement in the Technology also brings in the higher demand for computer related services, such as Software Development, Technical support and of course the computer Repairs and Maintenance.

4.11.2 Recessions and the Service Sector:

It has been generally accepted that the Service Sector strongly resists the Economic Recessions.9 It means that the not all but most of the Service Organizations do not show a downtrend either in sales or in employment opportunities during the periods of the Economic slowdown.

Majority of the Service Organizations in the Service sector are cyclical in nature, meaning thereby such organizations are likely to come across the slowdown in the growth. This inevitably results in the reduced and downward turnover as well as the loss of the jobs in the organization especially during the recession. The other Business services are also cyclical such as the Agricultural and Horticultural services, automotive services like car rentals and repairs and maintenance and rentals also.

Similarly there are Service Organizations considered as the minimum counter cyclical, meaning thereby they do not get affected that much during the recessions and gain the jobs easily also during the economic slowdown. Health care services are the most counter-cyclical, especially during an economic slowdown.

9 U.S. Bureau of Labor Statistics 162

Obviously it is because of the nature and importance of this service. Service Organizations engaged in the Health care is free from the impact of the economic slowdown and the recession because it as a necessity rather than something dependent on the economy.

The other prominent counter-cyclical service area is Private Education, which otherwise always is in higher demand irrespective of the Economic Recession. An interesting thing is, if people are unemployed and not finding the jobs they simply prefer to update the knowledge and for that they simply opt for further learning. This way the demand for the Service Organization engaged in the field of Education rises despite of the economic slowdown.

4.11.3 The future of the Service Organizations……

The Service sector is absolutely distinct and separate from the goods producing sector in the economy10. This includes very wide variety of the industries and the jobs available therein. The employment opportunities in the Service Organizations are growing at a great speed in the recent past and the same situation will continue in future as well according to the data from the government sources.

In addition to this majority of the Service Organizations are treated as „Recession proof‟. This means that the possibilities of economic slowdown do not affect the whole Service Sector as such. The Service Sector do not require the capital blocking elements which are essentially required in the Manufacturing Sector such as –

 Plant and Machinery,

 Investment in Land and Building for the Plant,

 Stock in Trade (Raw materials and W-I-P),

 Inventory of Finished Goods,

Hence the whole Service Sector has the can survive and even succeed during the economic slowdown.

10 www.referenceforbusiness.com/management/Sc-Str/Service-Industry 163

4.12 Expectancy (V. I. E.) Theory:

The Expectancy Theory11 is one of the very famous and popular Motivational Theories. It is also identified with as the „Valence – Instrumentality – Expectancy Theory‟. A noted management thinker Victor H. Vroom has developed the Expectancy Theory (V. I. E.) during his research on the motivation behind the decision making process.

The Expectancy Theory of Motivation tries to explain the reason behind the particular behavior of an individual as compared to the other set of behavior. This process outlines the Motivational Force (MF) of various behavior patterns of an Individual based upon his own perception of the chances of achieving his Expected outcome. The motivational force has been explained using the following equation

MF = Expectancy X Instrumentality X ∑ (Valence)

Expectancy (E)

Expectancy means the relation in between the effort and performance. The perception of the individual is the effort he put will get converted in to his performance. It is heavily based on an individual's personality, self-confidence and past experiences.

Instrumentality (I)

11 https://www.leadership-central.com/expectancy-theory- of-motivation.html 164

Instrumentality means the relation in between the performance and reward. The individual evaluates the chances of attaining the level of performance to actually result in his reward.

Valance (V)

Valance means the value that the individual correlates to the outcome. A positive valance highlights the individual preference to get the reward as against a negative valance highlights the individual, as per his perception that the reward may not fill his personal goal, thus he doesn't place any value for his performance. The Motivational Force (MF) is simply a multiplication of Expectancy, Instrumentality and Valence. Any multiplication having a value of zero the individual's feeling is that as if „it's not going to happen‟, will ultimately result in a motivational force to be zero.

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