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Principles of Management

Dr. Jitendra K. Sharma

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U 1.U 1. MANAGEMENTMANAGEMENT

Management is the art of getting things donethrough others.

Management in all business and human

organization activity is simply the act of getting

people together to accomplish desired goals.

Management comprises Planning, Organizing,

Staffing, Directing, Coordinating and Controlling an

organization for the purpose of accomplishing agoal..

Dr. Jitendra K. SharmaDr. Jitendra K. Sharma



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Management: an overview Management: an overview

Importance of Management:

1. It is goal oriented.2. It is an essential ingredient of the organization.

3. It is a distinct process consisting of Planning,

Organizing, Staffing, Directing and Controlling.

4.It integrates all resources to achieve objectives.5. Management is an unseen force.

6. It gets results by motivating others.

7. Management is a science & art. It has concepts,

principles & techniques, so it is science. It needs

skills, so it is art.8. It represents a system of authority.

9. It is multidisciplinary.

10.It has universal applications«




Functions of management1. It helps in Achieving organizational Goals - It arranges

the factors of production, and organizes the resources.2. Optimum Utilization of Resources - Management utilizes

all the physical & human resources productively.

3. Reduces Costs - It gets maximum results through

minimum input by proper planning and by using

minimum input & getting maximum output.

4. Establishes Sound Organization - No overlapping of

efforts (smooth and coordinated functions).

5. Establishes Equilibrium - It enables the organization to

survive in changing environment.

6. Essentials for Prosperity of Society - Efficient

management leads to better economical production

which helps in turn to increase the welfare of people..

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Dr. Jitendra K. Sharma 5

Difference: management and administrationDifference: management and administration

FactorsFactors AdministrationAdministration ManagementManagement

1.1. MeaningMeaning Formulation of Formulation of objectives & policiesobjectives & policies

Getting work doneGetting work donethrough others.through others.

2. Nature2. Nature DecisionDecision--making.making. Execution function.Execution function.

DoingDoing

3. Scope3. Scope Planning & controlPlanning & controlImplementationImplementation

4.4. DecisionDecision

makingmaking

What & when it is toWhat & when it is to

be done.be done.

Who will do it..Who will do it..

5.5.

EnvironmentEnvironment

Interaction withInteraction with

external environmentexternal environment

of businessof business

Internal factorsInternal factors

6. Status6. Status Higher levels of Higher levels of

managementmanagement

Lower levelsLower levels

7. Usage7. Usage In govt. offices.In govt. offices. In private sector In private sector



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LevelsLevels of of ManagementManagement:: Top,Top, MiddleMiddle && LowerLower..

TOP MANAGEMENT:TOP MANAGEMENT:

(Owner,(Owner, BoDBoD, CMD, CEO, ED etc.), CMD, CEO, ED etc.)

FunctionsFunctions::1.1. ToTo establishestablish goals/objectivesgoals/objectives..

2.2. ToTo makemake policiespolicies..

3.3. ToTo setset organizationorganization frameworkframework..

4.4. ToTo assembleassemble resourcesresources..

5.5. ToTo exerciseexercise effectiveeffective controlcontrol..

6.6. ToTo provideprovide overalloverall leadershipleadership....


Lower

Top

Middle



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MIDDLE MANAGEMENT:MIDDLE MANAGEMENT:(Divn(Divn heads,heads, PurchasePurchase Mgr,Mgr, MM,MM, HRHR Mgr,Mgr, FinFin.. MgrMgr..))

FunctionsFunctions::

1.1. ToTo interpretinterpret thethe toptop managementmanagement policiespolicies..

2.2. ToTo prepareprepare thethe organizationalorganizational setset upup inin ownown departmentsdepartments..3.3. StaffingStaffing of of peoplepeople..

4.4. ToTo assignassign dutiesduties forfor implementationimplementation..

5.5. ToTo compilecompile allall instructionsinstructions && givegive toto juniors juniors..

6.6. ToTo motivatemotivate juniors juniors..7.7. ToTo cooperatecooperate withwith otherother departmentsdepartments..

8.8. ToTo reportreport toto toptop managementmanagement....




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LOWER MANAGEMENT:LOWER MANAGEMENT:

(Foremen, supervisors, executives etc.)(Foremen, supervisors, executives etc.)

FunctionsFunctions::

1.1. TheyThey areare inin directdirect touchtouch withwith workersworkers..2.2. TheyThey handlehandle mostmost of of thethe implementationimplementation workwork..

3.3. OperationalOperational workwork isis handledhandled byby themthem..

4.4. TheyThey passpass thethe instructionsinstructions toto workersworkers....




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Frederick Taylor¶s Scientific Management:

A theory of management that analyzed and synthesized

workflows.Its main objective was improving economicefficiency, especially labor productivity.

Principles of scientific management:

1. Clear demarcation of authority

2. Responsibility3. Separation of planning from operations.

4. Incentive scheme for workers.

5. Management by exception: Investigating only those

situations in which actual results differ significantly

from planned results.6. Task specialization..




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HenriHenri Fayol¶sFayol¶s 14 Principles of Management:14 Principles of Management:

1.1. Division of work:Division of work: No overlappingNo overlapping

2.2. Authority & Responsibility:Authority & Responsibility: Balance is needed.Balance is needed.

3.3. Discipline:Discipline: Rules, norms, customs.Rules, norms, customs.

4.4.U

nity of command:U

nity of command: 1 employee1 employee

1 Boss.1 Boss.5.5. Unity of direction:Unity of direction: One manager One manager one plan.one plan. UoCUoC is notis not

possible withoutpossible without UoDUoD....

6.6. SubordinationSubordination of of IndividualIndividual InterestsInterests toto thethe CommonCommon

InterestInterest:: An organization is much bigger than the individual.

Therefore interest of the organization should prevail in allcircumstances.

7.7. Remuneration of personnel:Remuneration of personnel: Fair & equitableFair & equitable....




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8.8. CentralizationCentralization:: To large extent.To large extent.

9.9. Scalar chain of Command:Scalar chain of Command: From top to bottomFrom top to bottom

ranks.ranks.

10.10. Order Order:: Right person on right job.Right person on right job.

11.11. EquityEquity:: Justice & kindliness.Justice & kindliness.

12.12. StabilityStability of personnel tenure:of personnel tenure: Job security.Job security.

13.13. InitiativeInitiative:: Act without prompting from others. Act without prompting from others.

14.14. EspritEsprit de corpsde corps ((Union is strength).. _ Union is strength).. _


Henri Henri Fayol¶sFayol¶s 14 Principles of Management:14 Principles of Management:



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1. Too formal: Fayol's theory is said to be very formal.

2. Vague: Some of the concepts have not been properlydefined. For example, the principle of division of work

does not tell how the task should be divided.

3. Inconsistency: There is lack of practical studies. They

have not been verified under controlled scientificconditions.

4. Pro-management Bias: it is biased towards

management. Workers interests are ignored.

5. Historical value: Fayol's theory was relevant when

organisations operated in a stable and predictableenvironment. It seems less appropriate in today¶s

unstable environment. For example, now managers

cannot depend entirely on formal authority«

Criticism of Criticism of Fayol¶sFayol¶s theorytheory




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Criticism to Scientific Management: Taylor

1. It fails to appreciate the social context of work and

higher needs of workers.

2. Managers called it unwarranted interference in their

rights.3. Workers resisted it. Trade unions do not prefer it.

4. It fails to recognize the difference among people.

5. It fails to recognize the ideas and suggestions of

workers.

Criticism of Taylor¶s principlesCriticism of Taylor¶s principles




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POSDCORBPOSDCORB:: Planning,Planning, Organizing,Organizing, Staffing,Staffing, Directing,Directing,

Coordinating,Coordinating, Reporting,Reporting, BudgetingBudgeting::1. Planning: Outline the things that need to be done and

methods for doing them to fulfill the organizational

objectives;

2. Organizing: Establishment of formal structure of authority through which work subdivisions are

arranged, defined, and co-ordinated for the defined

objectives;

3. Staffing: Function of selecting and training the staff

and maintaining favourable conditions of work;4. Directing: Continuous task of making decisions and

translating them in specific and general orders and

instructions;

Process of Management: POSDCORBProcess of Management: POSDCORB-- GulickGulick




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POSDCORBPOSDCORB

5. Co-Ordinating: All important duty of interrelating the

various parts of the work;

6. Reporting: Keeping the supervisors informed about

what is going on through records, research and

inspection;

7. Budgeting: In the form of planning, accounting and

control..

Process of ManagementProcess of Management




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Project management is a carefully planned and

organized effort to accomplish a successful project.A project is a one-time effort that produces a specific

result, (eg: Building project).

This is opposite to a program, which is ongoing

process, such as a quality control program.

It includes developing a project plan, which includesdefining and confirming the project goals, identifying

tasks and how goals will be achieved, quantifying the

resources needed, and determining budgets & timelines

for completion.Projects follow major phases including feasibility,

project planning, implementation, evaluation and

support/maintenance..

PROJECT MANAGEMENTPROJECT MANAGEMENT




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Doing Project Management: Answering questions:1. Feasibility Studies -- Is the project worth doing?

2. Project Planning -- How do we determine project's

outcomes, goals and objectives?

3. Resource Allocation -- What do we need to

implement the plan (People, Money and Scheduling)?

4. Risk Management Analysis -- What could go wrong?

5. Ethical Analysis of Project -- Are we following,

morally and legally?

Project management Project management




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Doing Project Management± contd.

6. Implementation of Project Plan -- How do we ensureimplementation while managing change?

7. Earned Value Management -- How do we measure

progress and results?

8. Communicating Plans and Status -- What do we

communicate to whom and when?

9. Evaluating Projects and Results -- How do we

evaluate implementation and project results?

10. When Projects Are in Trouble -- How do we avoid

pitfalls and what do we do if they occur?





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Project manager:

To manage the project management processes, a

person should be well organized, have great follow-up

skills, be process-oriented, be able to multi-task.

He should have a logical thought process, be able to

determine root causes, have good analytical ability, be a

good estimator and budget manager, and have good

self-discipline..





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It is the process of mapping the likely consequences of decisions, working out the importance of individual

factors, and choosing the best course of action to take.

It is the act of making up mind about something, or a

position or opinion or judgment reached after consideration.

Decision making can be regarded as an outcome of

mental processes leading to the selection of a course of

action among several alternatives. The output can be anaction or an opinion of choice..

Unit 3:Unit 3: DECISION MAKINGDECISION MAKING




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Irreversible: This are those type of decisions, which, if

made once cannot be unmade. Whatever is decidedwould than have its repercussions for a long time to

come.

Reversible: This are the decisions that can be changed

completely, either before, during or after the agreed

action begins. Experimental: This types of decisions are not final

until the first results appear and prove themselves to

be satisfactory. It requires positive feedback before

one can decide on a course of action.

Delayed: Such decisions are put on hold until the

decision maker thinks that the right time has come.

Quick Decisions: These decisions enable one to make

maximum of the opportunity available at hand.

decision making typesdecision making types




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1. Identify the purpose of your decision. What is exactly

the problem to be solved? Why it should be solved?

2. Gather information. What factors does the problem

involve?

3. Identify the principles to judge the alternatives. Whatstandards and judgement criteria should the solution

meet?

4. Brainstorm and list different possible choices. Generate

ideas for possible solutions..

decision making techniquesdecision making techniques




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5. Evaluate each choice in terms of its results. Use your

criteria to determine the cons and pros of eachalternative.

6. Determine the best alternative. This is much easier after

you go through the above preparation steps.

7. Put the decision into action. Transform your decision

into specific plan of action steps. Execute your plan.

8. Evaluate the outcome of your decision and action

steps. This is an important step for further developmentof your decision making skills and judgement..

decision making techniquesdecision making techniques




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It is used in a situation when for each decision

alternative there is only one event and therefore onlyone outcome for each action. For example, there is only

one possible event for the two possible actions.

When results are predictable, it is known as decision

making under certainty.

When the outcome is not fixed and unpredictable, then

it is uncertainty. In this case, the outcomes are many

leading to varying consequences. These decisions may

be negative to some..

Decision making under Certainty/Uncertainty/RiskDecision making under Certainty/Uncertainty/Risk




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MEME

MANAGERIAL ECONOMICSMANAGERIAL ECONOMICS


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