Principles of Principles of ManagementManagement

By Sapna SuriBy Sapna Suri

Define Management Define Management

“ “ Management is the process of designing & Management is the process of designing & maintaining an environment in which maintaining an environment in which individuals, working together in groups, individuals, working together in groups, efficiently accomplish selected aims.”efficiently accomplish selected aims.”

Contd>>>>>>>Contd>>>>>>> As managers, people carry out the managerial As managers, people carry out the managerial

functions of planning, organizing, staffing, functions of planning, organizing, staffing, leading, & controlling.leading, & controlling.

Management applies to any kind of organization.Management applies to any kind of organization. It applies to managers at all organizational levels.It applies to managers at all organizational levels. The aim of all managers is the same: to create a The aim of all managers is the same: to create a

surplus.surplus. Managing is concerned with productivity, this Managing is concerned with productivity, this

implies effectiveness & efficiency.implies effectiveness & efficiency.

Define Organizations :Define Organizations :

““OOrganizations which can be defined as group of rganizations which can be defined as group of people working together to create a surpluspeople working together to create a surplus.”.”

In business organizations, this surplus is profit.In business organizations, this surplus is profit. In nonprofit organizations, such as charitable In nonprofit organizations, such as charitable

organizations, it may be the satisfaction of needs. organizations, it may be the satisfaction of needs.

Features of Management :Features of Management :

Organized activities Organized activities Existence of objectives Existence of objectives Relationship among resourcesRelationship among resources Working with & Through people Working with & Through people Decision- Making Decision- Making

Management & Administration :Management & Administration :

Administration is above management Administration is above management Administration is part of management Administration is part of management Management & administration are same Management & administration are same

Administration is above managementAdministration is above management : :

““administration is that phase of business administration is that phase of business enterprise that concerns itself with the overall enterprise that concerns itself with the overall determination of institutional objectives & the determination of institutional objectives & the policies necessary to be followed in achieving those policies necessary to be followed in achieving those objectives.”objectives.”

““Management on the other hand, is an executive Management on the other hand, is an executive function which is primarily concerned with function which is primarily concerned with carrying out broad policies laid down by the carrying out broad policies laid down by the administration.”administration.”

Difference between administration & Difference between administration & management :management :

Basis of Basis of difference difference

Administration Administration Management Management

11 Level in Level in organization organization

Top level Top level Middle & lowerMiddle & lower

22 Major focus Major focus Policy formulation & Policy formulation & objective determination objective determination

Policy execution for Policy execution for objective achievement objective achievement

33 Nature of Nature of functions functions

Determinative Determinative Executive Executive

44 Scope of Scope of functions functions

Broad & conceptual Broad & conceptual Narrow & operational Narrow & operational

55 Factors affecting Factors affecting decisionsdecisions

Mostly externalMostly external Mostly internalMostly internal

66 Employer-Employer-employee relationemployee relation

Entrepreneurs & ownersEntrepreneurs & owners Employees Employees

77 Qualities Qualities requiredrequired

AdministrativeAdministrative TechnicalTechnical

Administration is a part of management :Administration is a part of management :

Management is a generic name for the total process of Management is a generic name for the total process of executive control in industry or commerce.executive control in industry or commerce.

It is a social process entailing responsibility for the It is a social process entailing responsibility for the executive & economic planning & regulation of the executive & economic planning & regulation of the operation of an enterprise, in the fulfillment of a given operation of an enterprise, in the fulfillment of a given purpose or task.purpose or task.

Administration is that part of management which is Administration is that part of management which is concerned with the installation & carrying out the concerned with the installation & carrying out the procedures by which it is laid down & communicated, & procedures by which it is laid down & communicated, & the process of activities regulated & checked against plans.the process of activities regulated & checked against plans.

Management & Administration are sameManagement & Administration are same

Management & administration are synonymous; the Management & administration are synonymous; the difference between the two terms lies mostly in their usage difference between the two terms lies mostly in their usage in different countries or different fields of human in different countries or different fields of human organizations.organizations.

The distinction between the two terms may be drawn by The distinction between the two terms may be drawn by analyzing the origin of the word “administration”.analyzing the origin of the word “administration”.

The government often uses the word administrator, The government often uses the word administrator, instead of manager, to handle & manage its affairs instead of manager, to handle & manage its affairs

The functions of management :The functions of management :

Management can be break down into 5 Management can be break down into 5 managerial functions : planning, managerial functions : planning, organizing, staffing, leading & controlling organizing, staffing, leading & controlling

Management as an essential for any Management as an essential for any organizationorganization

Managerial functions as at different Managerial functions as at different organizational levels .organizational levels .

Top level

Managers

Middle-level Managers

First-level Supervisors

Functions of Top Management :Functions of Top Management :

To analyze, evaluate & deal with the external To analyze, evaluate & deal with the external environmental forcesenvironmental forces

To establish overall long-term goals strategy & policies of To establish overall long-term goals strategy & policies of the company including the master budget to allocate the company including the master budget to allocate resources.resources.

To create an organizational framework consisting of To create an organizational framework consisting of authority responsibility relationships.authority responsibility relationships.

To appoint departmental & other key executives.To appoint departmental & other key executives. To provide overall leadership to the company.To provide overall leadership to the company.

Contd >>>>>>>Contd >>>>>>>

To represent the company to the outside world, e.g. ; trade To represent the company to the outside world, e.g. ; trade associations, government, trade unions, etc.associations, government, trade unions, etc.

To exercise overall review & control on the company’s To exercise overall review & control on the company’s operations &operations &

To coordinate the activities & efforts of different To coordinate the activities & efforts of different departments. departments.

Functions of Middle Management :Functions of Middle Management :

To interpret & explain the policies framed by top To interpret & explain the policies framed by top management .management .

To compile & issue detailed instructions regarding To compile & issue detailed instructions regarding operations.operations.

To maintain close contacts with operating results so as to To maintain close contacts with operating results so as to evaluate performance.evaluate performance.

To participate in operating decisionsTo participate in operating decisions To cooperate among themselves so as to integrate or To cooperate among themselves so as to integrate or

coordinate various parts of a division or a department coordinate various parts of a division or a department

Functions of Supervisory ManagementFunctions of Supervisory Management : :

To plan day-to-day production within the goals laid down To plan day-to-day production within the goals laid down by higher authorities.by higher authorities.

To assign jobs to workers to make arrangements for their To assign jobs to workers to make arrangements for their training & development.training & development.

To supervise & control workers & maintain personal To supervise & control workers & maintain personal contact with charge hands.contact with charge hands.

To arrange materials & tools & to maintain machinery.To arrange materials & tools & to maintain machinery. To advise & assist workers by explaining work procedures, To advise & assist workers by explaining work procedures,

solving their problems, etc solving their problems, etc

Importance of Management :Importance of Management :

Effective Utilization of Resources Effective Utilization of Resources Development of Resources Development of Resources To Incorporate Innovations To Incorporate Innovations Integrating Various Interest Groups Integrating Various Interest Groups Stability in the Society Stability in the Society

Skills of Management :Skills of Management :

Technical skillsTechnical skills Human skillsHuman skills Conceptual skills Conceptual skills Design skills Design skills

Nature of Management :Nature of Management :

Management as an activity (or a process )Management as an activity (or a process )

I.I. PlanningPlanning

II.II. Organizing Organizing

III.III. StaffingStaffing

IV.IV. Directing &Directing &

V.V. Controlling Controlling

Contd >>>>>>>Contd >>>>>>> Management as a discipline Management as a discipline I.I. Management education is gaining popularity in the Management education is gaining popularity in the

present –day-times.present –day-times.II.II. Scholars are interested in study of management Scholars are interested in study of management

discipline, for purposes of conducting research studies discipline, for purposes of conducting research studies & making new & valuable contributions to this & making new & valuable contributions to this discipline discipline

III.III. Practitioners of management are much interested in a Practitioners of management are much interested in a study of management discipline study of management discipline

IV.IV. Management discipline is growing into specialized Management discipline is growing into specialized branches of management like production, marketing, branches of management like production, marketing, personnel, finance & several others personnel, finance & several others

Contd >>>>>..Contd >>>>>.. Management as a group ( class or team or society) Management as a group ( class or team or society) I.I. Micro-level : the economic results, in terms of the Micro-level : the economic results, in terms of the

attainment of common objectives, of the group-attainment of common objectives, of the group-endeavor endeavor

II.II. Macro-level : the survival, growth & prosperity of the Macro-level : the survival, growth & prosperity of the economy would be determined by the integrity, economy would be determined by the integrity, competence & efforts of the total management classcompetence & efforts of the total management class

Management as an economic resource (or a factor of Management as an economic resource (or a factor of production) . The economist has been all the time been production) . The economist has been all the time been speaking of 4 factors viz , land, labour, capital & speaking of 4 factors viz , land, labour, capital & enterprise.enterprise.

Management science or Art :Management science or Art :

Management science or art differ in the following ways :Management science or art differ in the following ways : Commonsense is vague as compared to scientific Commonsense is vague as compared to scientific

knowledge knowledge Flagrant inconsistency often appears in commonsense Flagrant inconsistency often appears in commonsense

whereas logical consistency is the basic of science whereas logical consistency is the basic of science Science systematically seeks to explain the events with Science systematically seeks to explain the events with

which it deals, commonsense ignores the need for which it deals, commonsense ignores the need for explanationexplanation

The scientific method deliberately exposes claims to the The scientific method deliberately exposes claims to the critical evaluation of experimental analysis, commonsense critical evaluation of experimental analysis, commonsense method fails to test conclusions in any scientific fashion method fails to test conclusions in any scientific fashion

Management as profession :Management as profession :

““PProfession is an occupation for which specialized rofession is an occupation for which specialized knowledge, skills & training are required & the use of knowledge, skills & training are required & the use of these skills is not meant for self-satisfaction but these are these skills is not meant for self-satisfaction but these are used for larger interests of the society & the success of the used for larger interests of the society & the success of the use of these skills is measured not in terms of money use of these skills is measured not in terms of money alone.” alone.”

Characteristics of profession :Characteristics of profession :

Existence of knowledge Existence of knowledge Acquisition of knowledge Acquisition of knowledge Professional associationProfessional association Ethical codesEthical codes Service motive Service motive

Objectives/ Advantages OR Significance Objectives/ Advantages OR Significance of Managementof Management : :

Micro level Micro level

Macro level Macro level

Micro level Micro level

Enterprise level Enterprise level

Maximum results with minimum inputs Maximum results with minimum inputs

I.I. Securing results in terms of production, sales, employee Securing results in terms of production, sales, employee satisfaction satisfaction

II.II. Maintaining a balance between the internal Maintaining a balance between the internal environment of the enterprise & the external environment of the enterprise & the external environment environment

Contd >>>>>>>Contd >>>>>>>

Ensuring maximum prosperity for both employers & Ensuring maximum prosperity for both employers & employees employees

I.I. Stability of employementStability of employement

II.II. Satisfactory working conditions Satisfactory working conditions

III.III. Fair remuneration Fair remuneration

IV.IV. Job-satisfactionJob-satisfaction

V.V. Justice & human treatmentJustice & human treatment

Ensuring survival, growth & prestige of the enterprise Ensuring survival, growth & prestige of the enterprise

Macro level Macro level

To further the process of economic growth To further the process of economic growth To ensure social welfare To ensure social welfare Generation of employment opportunities Generation of employment opportunities Helping maintain healthy industrial relations Helping maintain healthy industrial relations Conversion of challenges into opportunities Conversion of challenges into opportunities

Role of Management Principles :Role of Management Principles :

To increase efficiency To increase efficiency To crystallize the nature of Management To crystallize the nature of Management To carry on ResearchesTo carry on Researches To attain social objectives To attain social objectives

Evolution of Management Thought :Evolution of Management Thought :

Many different contributors of writers & Many different contributors of writers & practitioners have resulted in different practitioners have resulted in different approaches to management, & these make approaches to management, & these make up a “management theory jungle”up a “management theory jungle”

Taylor & scientific management :Taylor & scientific management :

The concept of scientific management was introduced by The concept of scientific management was introduced by Frederick Taylor in USA in the beginning of 20Frederick Taylor in USA in the beginning of 20thth century. century.

Scientific management was concerned essentially with Scientific management was concerned essentially with improving the operational efficiency at the shop floor level improving the operational efficiency at the shop floor level

Contd >>>>>>>>Contd >>>>>>>>

““scientific management is concerned with scientific management is concerned with knowing exactly what you want men to do knowing exactly what you want men to do & then see in that they do in the best & & then see in that they do in the best & cheapest way” cheapest way”

Elements & Tools of scientific ManagementElements & Tools of scientific Management : :

Separation of planning & doing Separation of planning & doing Functional Foremanship Functional Foremanship Job analysis Job analysis

1.1. Time study involves the determination of time a Time study involves the determination of time a movement takes to completemovement takes to complete

2.2. Motion study involves the study of movements in parts Motion study involves the study of movements in parts which are involved in doing a job & thereby eliminating which are involved in doing a job & thereby eliminating the wasteful movements & performing only necessary the wasteful movements & performing only necessary movements movements

Contd >>>>>>>Contd >>>>>>>

3. 3. Fatigue study shows the amount & frequency of rest Fatigue study shows the amount & frequency of rest required in completing the work.required in completing the work.

StandardizationStandardization Scientific selection & training of workers Scientific selection & training of workers Financial Incentives Financial Incentives Economy Economy Mental Revolution Mental Revolution

Principles of Principles of scientificscientific management : management :

Replacing rule of Thumb with science Replacing rule of Thumb with science Harmony in Group ActionHarmony in Group Action Co-operation Co-operation Maximum output Maximum output Development of workers Development of workers A more equal division of responsibility between A more equal division of responsibility between

management & workers management & workers

Contd >>>>>>>>>>>. Contd >>>>>>>>>>>.

Mental revolution on the part of management & workers Mental revolution on the part of management & workers

Merits of scientific Management :Merits of scientific Management :

More production & higher profits More production & higher profits Job-satisfaction Job-satisfaction Personality development Personality development Higher standard of living Higher standard of living

Fayol’s Administrative management :Fayol’s Administrative management :

Henry Fayol was a french mining engineer who turned a Henry Fayol was a french mining engineer who turned a leading industrialist & a successful manager leading industrialist & a successful manager

Perhaps the real father of modern operational Perhaps the real father of modern operational management theory is the French industrialist Henry management theory is the French industrialist Henry Fayol. Fayol.

Contd >>>>>>>Contd >>>>>>>

Fayol found that activities of an industrial organization Fayol found that activities of an industrial organization could be divided into 6 groups such as :could be divided into 6 groups such as :

1.1. Technical (relating to production)Technical (relating to production)

2.2. Commercial (buying, selling & exchange)Commercial (buying, selling & exchange)

3.3. Financial (search for capital & its optimum use )Financial (search for capital & its optimum use )

4.4. Security (protection of property & person)Security (protection of property & person)

5.5. Accounting (including statistics ) & Accounting (including statistics ) &

6.6. Managerial (planning, organization, command, Managerial (planning, organization, command, coordination, & control )coordination, & control )

Managerial qualities & training :Managerial qualities & training :

Physical (health, vigour , & address )Physical (health, vigour , & address ) Mental (ability to understand & learn, judgment, mental Mental (ability to understand & learn, judgment, mental

vigour, & capability)vigour, & capability) Moral (energy, firmness, initiative, loyalty, tact, & dignity)Moral (energy, firmness, initiative, loyalty, tact, & dignity) Educational (general acquaintance with matters not Educational (general acquaintance with matters not

belonging exclusively to the function performed)belonging exclusively to the function performed) Technical (peculiar to the function being performed) &Technical (peculiar to the function being performed) & Experience (arising from the work )Experience (arising from the work )

General Principles of Management :General Principles of Management :

Division of work Division of work Authority & ResponsibilityAuthority & Responsibility Discipline Discipline Unity of Command Unity of Command Unity of DirectionUnity of Direction Subordination of Individual to General Interest Subordination of Individual to General Interest Remuneration of PersonnelRemuneration of Personnel

Contd >>>>>.Contd >>>>>.

CentralizationCentralization Scalar chainScalar chain OrderOrder Equity Equity Stability of Tenure Stability of Tenure Initiative Initiative Esprit de corps Esprit de corps

Role & Functions of a Role & Functions of a manager & activities of manager & activities of management management

Functions of Manager :Functions of Manager :

Planning Planning Organizing Organizing Staffing Staffing DirectingDirecting ControllingControlling

Nature Management Functions :Nature Management Functions :

Management functions are universal Management functions are universal Management functions have interactive qualityManagement functions have interactive quality Although management process suggests a sequential Although management process suggests a sequential

arrangement of functions its not always possible in the arrangement of functions its not always possible in the performance of managerial functions strictly in a sequenceperformance of managerial functions strictly in a sequence

Since there are many managerial functions often a Since there are many managerial functions often a question arises which management function is more question arises which management function is more important so that managers devote more time to that important so that managers devote more time to that

Diagram Diagram

Planning

Staffing

directing organizing

Controlling

Roles Of Manager :Roles Of Manager :

Interpersonal Role Interpersonal Role Informational RoleInformational Role Decisional Role Decisional Role

Management Role :Management Role :

Formal authority &status +

Personal skills & characteristics

Interpersonal roles Figurehead

LeaderLiaison

International roles Monitor

Disseminator spokesperson

Decision roles Entrepreneur Disturbance

HandlerResource allocator

Negotiator

Functions at Various Levels of Functions at Various Levels of Management :Management :

Management

Top Management Supervisory Management Middle Management

Board of Directors Departmental heads Senior supervisors

chairman Divisional heads Intermediate supervisors

Chief executive Sectional heads Front-line supervisors

Top Management :Top Management :

Top management of an organization consists of board of Top management of an organization consists of board of directors, chairman & chief executive officer directors, chairman & chief executive officer

Functions of Board of Directors :Functions of Board of Directors : A board is elected by the owners (shareholders) & is A board is elected by the owners (shareholders) & is

responsible to them as their agent for managing the affairs responsible to them as their agent for managing the affairs of the organization.of the organization.

Board has authority to manage subject to the limitations Board has authority to manage subject to the limitations imposed by the Memorandum of Association & Articles of imposed by the Memorandum of Association & Articles of Association of the company as well as the provisions of the Association of the company as well as the provisions of the Companies Act Companies Act

Board of Directors Board of Directors

Divided into 6 categories :Divided into 6 categories : trusteeship, function implying that board trusteeship, function implying that board

must use the property of the companymust use the property of the company Determination of basic objectives & policies Determination of basic objectives & policies

of the organizationof the organization Selection of top executives & determination Selection of top executives & determination

of overall organization structure of overall organization structure Approval of financial matters like Approval of financial matters like