chapter3 theory of management

CHAPTER 3

GUEVARRA INSTITUTE OF TECHNOLOGYGINGOOG CITY

Theory of Management in Business and Industry

Guevarra Institute of Technology

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The Meaning of Management

The word management is derived from the Italian word , Maneggiare,

which means “to train horses” or literally “to handle”

the French words, Maneger, meaning “to direct a household”, i.e. “ to economize” and Menager, “ an act of guiding or leading”. Etymologically, therefore it means

to handle , direct economically, guide and lead.


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Attributes of Management

Management is the art and science of

organizing, preparing and directing human

efforts applied to control the forces and

to utilize the materials of nature

for the benefit of man


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Management is the development of

people and not the direction of things.


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Management is the scientific utilization of

men, money and materials to

accomplish a desired purpose.


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Management is simply stated and defined as “the getting of things done through efforts

of other people.”


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Organization Management

Organization is considered as the relationships of the structural elements in business ,including the individuals to carry on the work to accomplish the desired purposes

Management as the planning , directing, controlling and coordinating of those elements

Relationship between Management and Organization


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Organization Management

Organization refers to the structure or form of an enterprise and the arrangement of all parts thereof in a manner suitable for use in service

Management includes all those in charge of the direction of the work of others, those who will see to it that the parts so arranged and structured are used in service to best advantage.

Relationship between Management and Organization


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Structural Factors

MenMaterialsMachinesMethodsMoney

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Who is Management?

Traditionally, management means one

individual or a small group of key people who

make the significant

decisions and keep the policy making power and function as

an absolute power over the organization.

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What is Good Management?

When competent men are placed as heads of the departments , when these men are responsible for and are in control of all activities and when they work as a team under the leadership of a strong executive.

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What is Good Management?

When changes in business activities could be effected on short notice

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When is Management Considered Successful?

When industry is efficient and this efficiency is measured concretely in

terms of quality and quantity of products

produced with the minimum efforts at the least possible

cost.


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PLANNING

COORDINATING

DIRECTING

CONTROLLING

Functions of Management

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Planning

Is a method technique of looking ahead in order to meet work requirements and to reduce the amount of mental efforts required while work is being done.

It is a continuing process.

It emphasizes prevention rather than correction of delays.

The essence of planning is to remember the value of time, the virtue of patience and the joy of originating.

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Coordinating

It means concurrence in purpose and performance to secure harmony in action toward a common end.

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Directing

It means the pointing of all efforts toward the known objective.

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Control

It includes the restraining, checking and motivating influences exercised by the government.

It requires a knowledge of what is being done, what should be done and what to do in order to rectify unsatisfactory conditions.


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PLANNED METHODS OF PROCEDURE

ONE OF THE MOST VALUABLE MECHANISMS OR AIDS OF MANAGEMENT.

SYSTEM MATERIALLY AIDS IN SECURING THE DESIRED RESULTS IN THE BEST

POSSIBLE WAY WITH THE LATEST EXPENDITURE OF TIME AND EFFORT.

System, A Fundamental in Operating a Business


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Advantages of Proper Use of System

System is the introduction or order and method wherever it is applied


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Everyday work becomes routine through a system


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System permits those in authority to devote their time and effort to more important work, such as planning, attending to major problems, searching for new markets and products, and the like.


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System aids in the control and reduction of costs


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Rules for Applying System

System Used in a Particular Concern Should Reflect a Basic General Plan

A System Must Represent a Definite and Useful Purpose.

Maintaining a System Must Prove Worth Its Cost


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Rules for Applying System

A System should be clear, simple, easily understood, and adequate to fit the need , but involving the least expenditure of time and effort.

There Should be Frequent Periodic Checking.


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Basic Principles of Management


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1. The Principle of Policy Making

Definite , clear-cut policies are essential

to effective management

General company policies

Major PoliciesDepartmental Policies


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2. The Principle of Improvement and Adjustment

To be successful, a business must

advance ; it cannot remain dormant.


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3. The Principle of Balance

To secure proper development of business and efficiency in

operation , a company must be internally

well-balanced.


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4. The Principle of Relationship of Task and Accomplishment

A person works best and accomplishes most when he is

given a definite job to be completed in a given time , the work being of a nature for which he is mentally and physically suited.


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5. The Principle of Individual Effectiveness

Individual effectiveness is increased through

training and improved working

conditions


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6. The Principle of Simplicity

All Elements which are not essential to

successful operation should be eliminated and all those retained should be applied in

the simplest way.


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7. The Principle of Specialization

Scientific distribution of work results in specialization of effort and task


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8. The Principle of Standardization

Whenever practicable, best practices should

be determined , expressed in terms of

definite units or standards and

adopted as a pattern for use in operation or performance and

in planning and control


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9. The Principle of Financial Incentive

Remuneration should be in direct

proportion to the value of

accomplishment


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10. The Principle of Human Relations

Management succeeds or fails as human

relations in business are intelligently or otherwise handled


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11. The Principle of Planning

In order to accomplish anything of

importance , there must be planning in

advance of doing.


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12. The Principle of Control

Planning is of little value unless there is subsequent control to make certain that the plans are carried out.


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13. The Principle of Cooperation

The efforts of two or more individuals working as a unit toward a common

goal are greater than the sum of the efforts

of the individuals working at individuals.


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14. The Principle of Leadership

Wise Leadership is the most important single factor in

successful operationGood leadership implies :The ability to do what sets

out to doThe spirit to carry on until

the task set is accomplished

The personality and ability to win cooperation

The skill to direct and control the efforts of others.


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15. The Principle of Delegation of Authority and Responsibility

Decisions should be made at the lowest

practicable organization level

Delegation means giving power to do certain things to subordinates and pointing out how that power is to be used.


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17. The Principle of Utilization of Executive Ability

Executive ability can be utilized fully by

freeing it of the need to attend to all

routine matters.


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The executive should have


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1. Physical and mental health

Vitality, strength and endurance are

required of executives.


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2. Intellect

Clear thinking and intelligence is either creative or judicial


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3. Personality

The executive should have maturity , social orientation , personal

magnetism that commands consent ,

cooperation, enthusiasm, the

ability to inspire , persuasiveness and

tact.


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4. Character

The good executive, as a leader, has integrity,

and other excellent character traits


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5. Language Facility

The leader should not only know but he

should also have the ability to teach and

communicate what he knows.


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Reference

Gutierrez, H., Pura, J. & Garcia, R. 1994, Business Organization and Management, 6th edn, R.M. Garcia Publishing House, Quezon City