module 1 concepts of management

8/22/2019 Module 1 Concepts of Management

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Module 1 : Concepts of Management

Definition of Management

Management Science or Art,

Difference between Management and Administration,

Management thoughts by Management Gurus,

Functions of Management,

Types of Business Organization,

Business Ethics and Social Responsibility: Concept,

Shift to Ethics,

Tools of Ethics.

By : Monarch Anantkumar Joshi

Asst. Prof. ;Indu Management Institute, Vadodara

Principles of Management


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Definition of ManagementKoontz & ODonnel: Management is the process of designing and maintaining an

environment in which individuals, working together in groups, efficiently accomplish

selected aims.

Koontz : Management is art of getting things through and with people in formally

organized groups.

Peter Drucker : Management is multipurpose organ that manages a business,

manages a manager and manages a worker and work.

Henry Fayol : To manage is to forecast, to plan, to organize, to command, to

coordinate, and to control.

Frederick Taylor : Management is the art of knowing what you want to do and thenseeing that it is done in the best and cheapest way

Developed BY : Monarch A Joshi, Asst Prof,Indu Management Institute, Vadodara


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Nature of management

1. Multidisciplinary

2. Dynamic nature of principles

3. Relative not Absolute principles

4. Management is both Science & Art

5. Management as Profession

6. Universality of Management



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Purpose of management

1. Effective Utilization of Resources

2. Development of Resources

3. To Incorporate Innovations

4. Growth & Expansion of Organization5. Integrating various Interest Groups

6. Stability in the Society

4Developed BY : Monarch A Joshi, Asst Prof,Indu Management Institute, Vadodara


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Features of Management

1. Organized Activity

2. Existence of Objectives

3. Relationship among resources4. Working with & through people

5. Decision Making



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Management as Profession

1.Body of Knowledge

2.Development and updating the knowledge

3.Professional Journals

4.Professional Associations

5.Code of Conduct

6.Specialized Educational Qualification



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Management science or art

Koontz &ODonnell

: Managing as practice is an art;the organized knowledge underlying the practice may

be referred to as a science.

Management is Art :Existence of TheoreticalKnowledge.

Personalized Application.

Involves Practice & Creativity.

Management is Science :Existence of Systematized Body of

Knowledge.

Use of Scientific Methods of

Observation.

Principles Based on Experiments.

Universal validity of Principles.

Management is science & art



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management & Administration

In 1923 Oliver Sheldon raised conflict between the

two terms in his book - The Philosophy ofManagement

Three approaches emerged due to different views:

1. Administration is above Management.

2. Administration is part of Management .

3. Management and Administration is same.

Developed BY : Monarch A Joshi, Asst Prof,

Indu Management Institute, Vadodara


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Difference between management & AdministrationBasis of Difference Administration Management

1. Level of Management Top Level Middle & Lower Level

2. Major Focus Policy formulation and

objective determination

Policy execution for

objective achievement

3. Nature of functions Determinative Executive

4. Scope of functions Broad and conceptual Narrow and Operational

5. Factors affecting

decisions

External Internal

6. Employer Employee

Relation

Entrepreneurs & Owners Employee

7. Qualities Required Administrative Technical



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Management thoughts by management gurusClassification of Management Approach Major Contributors

A. Classical Approach

1. Scientific Management Frederick W. Taylor

Henry Gantt

Franck & Lillian Gilbreth

2. Administrative Management Henry Fayol

3. Bureaucratic Management Max Weber

B. Behavioral Approach.

1. Human Relation Approach Elton Mayo

2. Behavioral Science Approach Maslow

Herzberg

McGregor

Likert

Chester Bernard

C. Modern Approach.

1. Quantitative Approach Russel L. Ackoff

F. W. Lanchester

Thomas A. Edision

2. System Approach Churchman West

3. Contingency Theory Paul Hersey

4. Social System Approach Vilfredo Pareto

5. Decision Theory Approach Herbert A Simon

6. 7S Framework Mickensy

7. Theory Z William Ochi


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Taylor's Principles of Scientific Management1. Replacing rules of thumb with science (organized knowledge)

2. Obtaining harmony in group action, rather than discord

3. Achieving cooperation of human beings, rather than chaotic

individualism

4. Working for maximum output, rather than restricted output

5.Developing all workers to the fullest extent possible for their own and

their company's highest prosperity



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14 principles by Henry FayolFrench industrialist Henry Fayol (1841-1925),a prominent European management theorist,

developed a general theory of management. 14 principles are as follow..

1.Division of work: Work specialization results in improving efficiency of operations.

2.Authority and responsibility: Authority and responsibility are two side of a coins. when a

manager exercise authority, he should be held responsible go for getting the work done in

the desired manner.

3.Discipline: It is vital for running organization smoothly.

4.Unity of command: Each employee should receive orders or instructions from one

superior only.

5.Unity of direction: Activities should be organized in such a way that they all come under

one plan and are supervised by only one person.

6.Subordination of the individual interest to the general interest: Individual interest

should not take precedence over the goals of the organization.

7.Remuneration: The compensation paid to employee should be fair and based on factors

like business conditions, cost of living, productivity of employees and the ability of the firm

to pay.



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8. Centralization: Depending on the situation, an organization should adopt a centralized

or decentralized approach to make optimum use of its personnel.

9. Scalar chain: This refers to the chain of authority that extends from the top to the

bottom of an organization.

10 Order: This refers to follows order. Either they may be social or material.

11. Equity: All employees should be treated fairly. A manager should treat all employees

in the same manner without prejudge.

12. Stability of tenure of personnel: A highly labor turnover should be prevented and

manager should motivate their employees to do a better job.

13. Initiative: Employees should be encouraged to give suggestion and develop new and

better work practices.

14. Esprit de crops: This means a sense of union. There should have harmony and co-ordination between all.


W y y


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MAX WEBER theory of Bureaucracy


Bureaucracy can be considered to be a particular case of rationalization,

or rationalization applied to human organization.

Bureaucratic coordination of human action, Weber believed, is thedistinctive mark of modern social structures.

In order to study these organizations, both historically and in

contemporary society, Weber developed the characteristics of an ideal-

type bureaucracy:

Hierarchy of authority

Impersonality

Written rules of conductPromotion based on achievement

Specialized division of labor

Efficiency

Human Relation Approach


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Human Relation Approach:Hawthorne studies consist of four interrelated experiment.

Illumination Experiment

Relay Room Experiments

Bank Wiring Observation Room

Experiment Interview Program

Behavioral science approach

1. Contribution of Maslow

Basic physiological needs

Safety & Security needs

Social needs

Ego needs

Self actualization

2. Contribution of HerzbergMotivational Factors

Hygiene Factors

3. Contribution of McGregor

Theory x & Theory y



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Managerial Skills and the Organizational HierarchyThe four skills required of administrators:

Technical skills

Human skills

Conceptual & Design skills



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Functions of management

The five managerial functions around whichmanagerial knowledge are organized: planning,

organizing, staffing, leading, controlling.

Planning involves selecting missions and objectivesand the actions to achieve them, which requires

decision making.

Organizing involves establishing an intentionalstructure of roles for people to fill in an organization.




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Staffing involves filling, and keeping filled, thepositions in the organization structure.

Leading is influencing people so that they will

contribute to organization and group goals.

Controlling is measuring and correcting individual

and organizational performance to ensure that eventsconform to plans.



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Time Spent in Carrying Out Managerial Functions



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The Systems Model of Management and Organization


Roles of Managers (10) b Mintzberg


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Roles of Managers (10) : b Mintzberg

INTERPERSONAL

Figurehead Performs ceremonial and symbolic duties such as greetingvisitors, signing legal documents.

Leader Direct and motivate subordinates, training, counseling &communicating with subordinates.

Liaison Maintain information links both inside and outside organization;use mail, phone calls, meetings.

INFORMATIONAL

Recipient Seek & receive information, scan periodicals and reports,maintain personal contacts.

Disseminator Forward information to other organization members; send

memos and reports, make phone calls.Spokesperson Transmit information to outsiders through speeches, reports,

memos.

DECISIONAL

Entrepreneur Initiate improvement projects, identify new ideas, delegate idearesponsibility to others.

Disturbance

Handler

Take corrective action during disputes or crises, resolve conflicts

among subordinates; adapt to environmental crises.

Resource

Allocator

Decide who gets resources, scheduling, budgeting, setting

priorities.

Negotiator Represent department during negotiation of union contracts,sales, purchases, budgets; represent departmental interests.

21Developed BY : Monarch A Joshi, Asst Prof,



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Types of business organization

Organization is a group of people working together

to create a surplus / profit, satisfaction of needs, andachievement of goals viz. organizational as well as

individual. ]

Types of Organization1. Proprietorship

2. Partnership

3. Joint Stock

a) Private Ltd.

b) Public Ltd.

4. Cooperative / Society / Trusts




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Concept of Business ethics & socialresponsibility

Ethics is the discipline dealing with what is good and

bad and with moral duty and obligation.

Business ethics is concerned with truth and justice.

Corporate social responsibility is seriously considering

the impact of the company's actions on society.

Social responsiveness is "the ability of a corporation torelate its operations and policies to the social

environment in ways that are mutually beneficial to the

company and to society.Developed BY : Monarch A Joshi, Asst Prof,



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Areas of social responsibilitiesEcological & environmental quality

Consumption

Community need

Government relationMinorities and backward communities

Labor relations

Share holders relations

Corporate philanthropyInterest GroupsShareholders

Workers

CustomersCreditors & Suppliers

Government

Society



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Arguments for social responsibilitiesBusiness is part of Society.Avoidance of Government Regulations.

Long run Self Interest of Business (Improves Public Image).Traditional Values.Better and supportive environment for business.

Arguments against social responsibilitiesAgainst basic function of business (Profit Maximization).Domination of Business Values compared to Social Values.

Inefficiency in Organizational System.Social Responsibility execution cost.Lack of broad support from all the groups of society.



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Shift to ethics or Difference between SR & Ethics

Ethics Social Responsibility

1. Provides guidelines for

human behavior in every

field.2. Implications are wider.

3. Concerned with micro aspect

4. Related to daily operational

decisions with limited socialimpact.

1. Works in organizational

context.

2. Implications are narrow.3. Concerned with macro

aspects

4. Related to decisions with

broad implications for a largesegment of society.




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Theories of Ethics

1. The utilitarian theorysuggests that plans andactions should be evaluated by theirconsequences.

2. The theory based on rights holds that all peoplehave basic rights.

3. The theory of justice demands that decisionmakers be guided by fairness and equity, as well asimpartiality.



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Institutionalizing ethics1.By establishing an appropriate company policy or

code of ethics.2.By using a formally appointed ethics committee.

3.By teaching ethics in MDPs.

Factors to raise ethical standards1) Public disclosure and publicity.

2) Increased concern of a well-informedpublic.3) Teaching of ethics and values in higher education

institutions.


Tools of ethics


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Tools of ethics1. VALUES : Values are set of emotional rules people follow to help make the right

decision in life.

2. RIGHTS : Claims that entitles a person to take a particular action.

3. DUTIES : Obligation to take specific steps or obey the law.4. MORAL RULES : Rules for behavior that often become internalized as moral values.

5. HUMAN Relationship : Web of relationship.

6. COMMON MORALITY : The body of moral rules governing ordinary ethical problem.

BASIC PRINCIPLES OF COMMON MORALITY

A. Promise Keeping

B. Non - malevolence

C. Mutual Aid

D. Respect For Persons

E. Respect For Property

7. MORALITY OF CARE : Common morality - the morality of rules and justice.

TWO STRANDS OF MORAL THEORYA. Justice Perspective

B. Care Perspective



Whistle blowing


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Whistle-blowing is making known to outside agencies

what are considered unethical company practices.

Whistle-blowing

Developed BY : Monarch A Joshi Asst Prof

References & Suggested Readings1. Management - A Global and Entrepreneurial Perspective by Weihrich Heinz & Koontz Harold

2. Principles of Management by Koontz

3. Fundamentals of Management : Essential Concepts and Applications by Robbins S.P. & Decenzo David A

4. Management by Stoner, Freeman & Gilbert Jr.

5. Principles & Practice of Management by L. M. Prasad.

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module 1 concepts of management

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