Lecture Notes: Management Concept & Practice (TMM - 660) Unit 01 Introduction to management, evolution of management theory, modern

n management principles, element of management: Planning, controlling, staffing, directing, coordinating, reporting and budgeting Introduction of Management Management can be defined as all the activities and tasks undertaken by one or more persons for the purpose of planning and controlling the activities of others in order to achieve an objective or complete an activity that could not be achieved by the others acting independently Frederick W Taylor is a practitioner of the field of management who has a background in production. He focuses on the critical role that efficiency plays in management. He has defined management as the art of knowing what you want to do and seeing that it is done in the best and cheapest way. Harold Koontz defines management as the art of getting things done through and with people in formally organized groups. The following aspects of management are clarified through the definitions: Management is a continuous process Many different and inter related activities are performed by managers to achieve the stated goals. The aim of managing is to create a surplus i.e. to be effective and efficient Functions of Management w.r.t. Level of Management:

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Besides various managerial functions, manager need to posses three kinds of skills. The relative importance of these skills once again differs at various levels in the hierarchy. Technical skill is a term used to denote the knowledge of methods, processes and procedures of the job. It is also reflective of the proficiency gained in each of these areas. For example, the supervisor of a welder should have the ability to teach him how to weld. Human skill is the skill to work with people. Conceptual skill is the ability to see and recognize significant elements in a situation. Design skill is the ability to effectively find workable solutions that will benefit the organization

Management-- Science, Art or Profession? In order to define management as any of these respective fields of study, we need to look at the nature of management. Like all other practices such as engineering, medicine, accountancy, human resources, public relations or even cricket, management is an art. However, managers can be better of by using systematically collected vast body of knowledge. The very existence of the body of knowledge and principles evolved on the basis of constant research, study and examination makes it eligible to be called as a science. Managers, like other practitioners, learn by trial and error and for reference they can always turn to the body of knowledge. This body of knowledge forms the basis for their practice. It is this knowledge that certifies management as science and its practice an art. In recent times, management has also gained recognition as a certified profession. The characteristics of a profession are as follows: Existence of an organized and systematic body of knowledge Formal methods of acquiring knowledge and skills Existence of an apex level body with professionalism as its goal Existence of an ethical code to regulate the behavior of the members of the profession Charging of fees based on service 2 Lecture Notes/ N.S.Bohra / Assistant Professor/ Faculty of Management/ GEU

A concern for social responsibilities A close scrutiny of management as a profession reveals that it has a long way to go to have a universal acceptance of its professional existence. Unlike other profession such as medicine, law etc., the practice of management is not restricted to individuals with a special degree. Any one with the right skills can take up the task of management. According to Peter Drucker, great damage can be done to an economy or to a society by attempting to professionalise management by licensing managers, for instance, or by limiting access to management to people with a special academic degree. There are many factors involved in the growing demand for professional managers. Management as a profession has gained a firm footing in India as stated earlier. It has still a long way to go for universal acceptance as a profession. Management can be science, an art or a profession. However, the fundamental concepts of management are universal in nature. The managers at different levels in the organization, in different organizations and in organizations at different places face different problems and situations. The application of concepts, techniques and methods will automatically vary in all such situations. This is the characteristic of the difference between theory and practice in any field. Evolution of Management Thought EARLY PERSPECTIVES: The first known management ideas were recorded in 30004000 B.C. One Pyramid built by Egyptian ruler Cheops required work to be done by 100,000 men for over twenty years in 2900 B.C. It covered 13 acres of land and measured 481 meters in height. The stone slabs had to be moved thousands of kilometres of distance. As folklore goes, even the sound of a hammer was not heard in the villages in the vicinity of the site of these pyramids. Such monumental work could not be completed without adherence to principles of sound management. CLASSICAL MANAGEMENT THEORY: Rational economic view, scientific management, administrative principles, and bureaucratic organization characterize this phase. While the rational economic view assumed that people are motivated by economic gains primarily; scientific management of F.W. Taylor and others emphasised one best way of production etc; administrative theorists personified by Henri Fayol etc looked at the best way to combine jobs and people into an efficient organization; bureaucratic organisation theorists led by Max Weber looked at ways to eliminate managerial inconsistencies due to abuse of power which contributed to ineffectiveness. This was the 3 Lecture Notes/ N.S.Bohra / Assistant Professor/ Faculty of Management/ GEU

era of the industrial revolution and factory system of production. Large scale production would not have been possible without adherence to the principles governing organising production based on division of labour and specialisation, relationship between man and the machine, managing people and so on. NEO CLASSICAL THEORY HUMAN RELATIONS APPROACH: This school of thought developed between 1920s to 1950s felt that employees simply do not respond rationally to rules, chains of authority and economic incentives alone but are also guided by social needs, drives and attitudes. Hawthorne Studies at GEC etc., were conducted then. It was quite natural that in the early phases of the industrial revolution, the emphasis was on development of techniques and technology. The attention to the human factor was the salient aspect of this school of thought. This attention was to serve as a precursor to the development of behavioral sciences. MANAGEMENT SCIENCE/OPERATIONAL RESEARCH: It emphasizes research on operations and use of quantitative techniques to aid managers to take decisions. The evolution of modern management began in the closing decades of the nineteenth century, after the industrial revolution had swept through Europe, Canada, and the United States. In the new economic climate, managers of all types of organizationspolitical, educational, and economicwere increasingly trying to find better ways to satisfy customers needs. Many major economic, technical, and cultural changes were taking place at this time. The introduction of steam power and the development of sophisticated machinery and equipment changed the way in which goods were produced, particularly in the weaving and clothing industries. Small workshops run by skilled workers who produced hand-manufactured products (a system called crafts production) were being replaced by large factories in which sophisticated machines controlled by hundreds or even thousands of unskilled or semiskilled workers made products. Owners and managers of the new factories found themselves unprepared for the challenges accompanying the change from small-scale crafts production to large-scale mechanized manufacturing. Many of the managers and supervisors had only a technical orientation, and were unprepared for the social problems that occur when people work together in large groups (as in a factory or shop system). Managers began to search for new techniques to manage their organizations resources, and soon they began to focus on ways to increase the efficiency of the workertask mix.

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F.W. Taylor and Scientific Management Frederick W. Taylor (18561915) is best known for defining the techniques of scientific management, the systematic study of relationships between people and tasks for the purpose of redesigning the work process to increase efficiency. Taylor believed that if the amount of time and effort that each worker expended to produce a unit of output (a finished good or service) could be reduced by increasing specialization and the division of labour, then the production process would become more efficient. Taylor believed that the way to create the most efficient division of labour could best be determined by means of scientific management techniques, rather than intuitive or informal rule-of-thumb knowledge. Based on his experiments and observations as a manufacturing manager in a variety of settings, he developed four principles to increase efficiency in the workplace: Principle 1: Study the way workers perform their tasks, gather all the informal job knowledge that workers possess, and experiment with ways of improving the way tasks are performed. To discover the most efficient method of performing specific tasks, Taylor studied in great detail and measured the ways different workers went about performing their tasks. One of the main tools he used was a time-and-motion study, which involves the careful timing and recording of the actions taken to perform a particular task. Once Taylor understood the existing method of performing a task, he tried different methods of dividing and coordinating the various tasks necessary to produce a finished product. Usually this meant simplifying jobs and having each worker perform fewer, more routine tasks, as at the pin factory or on Fords car assembly line. Taylor also sought ways to improve each workers ability to perform a particular taskfor example, by reducing the number of motions workers made to complete the task, by changing the layout of the work area or the type of tool workers used, or by experimenting with tools of different sizes. Principle 2: Codify the new methods of performing tasks into written rules and standard operating procedures. Once the best method of performing a particular task was determined, Taylor specified that it should be recorded so that the procedures could be taught to all workers performing the same task. These rules could be used to standardize and simplify jobs furtheressentially, to make jobs even more routine. In this way, efficiency could be increased throughout an organization. Principle 3: Carefully select workers so that they possess skills and abilities that match the needs of the task, and train them to perform the task according to the established rules and procedures. 5 Lecture Notes/ N.S.Bohra / Assistant Professor/ Faculty of Management/ GEU

To increase specialization, Taylor believed workers had to understand the tasks that were required and be thoroughly trained in order to perform the tasks at the required level. Workers who could not be trained to this level were to be transferred to a job where they were able to reach the minimum required level of proficiency. Principle 4: Establish a fair or acceptable level of performance for a task, and then develop a pay system that provides a reward for performance above the acceptable level. To encourage workers to perform at a high level of efficiency, and to provide them with an incentive to reveal the most efficient techniques for performing a task, Taylor advocated that workers should benefit from any gains in performance. They should be paid a bonus and receive some percentage of the performance gains achieved through the more efficient work process. MODERN MANAGEMENT: It sees modern organizations as complex systems and underlies contingency approach and use of modern techniques to solve organizational and human problems. Principles of Management: o PLANNING o ORGANISING o STAFFING o DIRECTING Function of Management: Planning. Planning is determining the objectives and formulating the methods to achieve them. However, the concept is simpler said than done. It is believed that a job well planned is half done. During planning one need to ask oneself the following: What am I trying to accomplish? Or, what is my objective? What resources do I have? And what resources do I need to accomplish these objectives? What are the methods and means to achieve the objectives? Is this the optimal path? Types of Planning One can plan effectively only if one understands the different types of plans and its purposes. Planning involves dealing with the following organizational aspects: Purposes or missions of the organization Objectives of the organization Strategies for development 6 Lecture Notes/ N.S.Bohra / Assistant Professor/ Faculty of Management/ GEU

Policies for the organization Procedures as general guidelines Rules for all the departments Programs for action Budgets for monetary purposes The following principles should be kept in mind while planning effectively: 1. Take time to plan-- Planning should never be done in haste and repent. One may save some time by developing a plan quickly. But, in the event of things going wrong, if you have not considered all the factors in a hurry, you are under pressure of both the time and resources. This becomes a sure recipe for trouble. The trouble is not only for the individual, but also for the organization. 2. Planning can be top to down or bottom to top-- Generally, the top management of the organization prepares plans. However, some times the plans evolve from information that comes from the lower levels. This is called bottom to top approach. 3. Involve and communicate with all those concerned-- Such an exercise inculcates in people a commitment to achieve the goals. Participation in the process of planning gives a sense of pride and binds them to the objectives. Plans should be flexible and dynamic-- Vision is the art of seeing things that are not apparent. Plans work on similar lines. They should include the factors unexpected or at least should have enough scope for maneuvering in the event of an unforeseen change in the environment. 4. Evaluate and revise-- Evaluate the plans at regular intervals to make sure that it is contributing to the objectives in the expected manner. Steps in Planning There is no fixed formula or method for planning. It is carried out as per the need of the organization. However, one would broadly follow the steps in planning mentioned below: 1. The first step to determine the goals or objectives for the entire organization. If one fails to set correct or meaningful goals, it becomes impossible to make effective plans. Although goal setting is the first step in planning, the real starting point is the identification of the opportunity or the problem itself. This is very important because the manager should know where they are, what opportunities or problems they wishto handle and why or what they expect to gain. 7 Lecture Notes/ N.S.Bohra / Assistant Professor/ Faculty of Management/ GEU

2. The second step is to determine the planning premises. Planning premises, in simpler words, is the assumptions that are made about the various elements of the environment. It is important for all the managers involved in planning to agree on the premises. Internal premises include sales forecasts and policies of the organization. External premises are those factors that are out side the organization such as technological changes, general economic conditions etc. 3. The third step would be to decide the planning period. While operational planning focus on the short term, the strategic plans focus on the long term. 4. The fourth step in planning is to search for and examine alternative courses of actions. There is rarely a need to plan for where there exist no alternatives and generally an alternative that is not obvious proves to be the best. 5. The fifth step is evaluating the alternatives. After identifying the number of alternatives and examining their strong and weak points, it is logical to evaluate them against the planning premises and objectives. 6. The sixth step is the real point of decision-making. Here, a particular alternative is chosen from the given options. Based on this, the strategic plan is adopted. 7. The seventh step is to make derivative plans. The plan chosen after a through analysis is seldom complete without derivative plans. The plan, to make it operational, is split into departmental plans. Plans for the various operational units, within the departments, have to be formulated. The plans, thus, developed for the various levels down the organization are called derivative plans. Organizing; Arranging several elements into a purposeful sequential or spatial (or both) order or structure. Nature of organization 1. Specialization and division of work: The entire philosophy of organization is centered on the concepts of specialization and division of work. The division of work is assigning responsibility for each organizational component to a specific individual or group thereof. It becomes specialization when the responsibility for a specific task lies with a designated expert in that field. The efforts of the operatives are coordinated to allow the process at hand to function correctly. Certain operatives occupy positions of management at various points in the process to ensure coordination. 2. Orientation towards goals: Every organization has its own purposes and objectives. Organizing is the function employed to achieve the overall goals of the organization. 8 Lecture Notes/ N.S.Bohra / Assistant Professor/ Faculty of Management/ GEU

Organization harmonizes the individual goals of the employees with overall objectives of the firm. 3. Composition of individuals and groups: Individuals form a group and the groups form an organization. Thus, organization is the composition of individual and groups. Individuals are grouped into departments and their work is coordinated and directed towards organizational goals. 4. Differentiated functions: The organization divides the entire work and assigns the tasks to individuals in order to achieve the organizational objectives; each one has to perform a different task and tasks of one individual must be coordinated with the tasks of others. Collecting these tasks at the final stage is called integration. 5. Continuity: An organization is a group of people with a defined relationship in which they work together to achieve the goals of that organization. This relationship does not come to end after completing each task. Organization is a never ending process. Purpose of organization 1. Helps to achieve organizational goal: Organization is employed to achieve the overall objectives of business firms. Organization focuses attention of individuals objectives towards overall objectives. 2. Optimum use of resources: To make optimum use of resources such as men, material, money, machine and method, it is necessary to design an organization properly. Work should be divided and right people should be given right jobs to reduce the wastage of resources in an organization. 3. To perform managerial function: Planning, Organizing, Staffing, Directing and Controlling cannot be implemented without proper organization. 4. Facilitates growth and diversification: A good organization structure is essential for expanding business activity. Organization structure determines the input resources needed for expansion of a business activity similarly organization is essential for product diversification such as establishing a new product line. 5. Human treatment of employees: Organization has to operate for the betterment of employees and must not encourage monotony of work due to higher degree of specialization. Now, organization has adapted the modern concept of systems approach based on human relations and it discards the traditional productivity and specialization approach.

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Types of Organizational Design Formal Structure Formal structure is primarily concerned with the relationship between authority and subordinate. A typical organization chart illustrates the formal structure at work in a company or part of a company. The hierarchical organization begins at the top with the most senior leader and then cascades down to the subordinate managers and then subordinate employees below those managers. There are job titles, financial obligations and clear lines of authority for each box on the organization chart. Informal Structure Informal structures typically develop around social or project groups. Because informal structures are based on camaraderie there is often a more immediate response from individuals. This saves people time and effort, thus making it easier to work with in informal structures. People also rely on informal structure if the formal structure has stopped being effective, which often happens as the company grows or changes but doesnt reevaluate its hierarchy or work groups.

Matrix Organization: Other names given to this type of organization are Grid or Project or Product management. The essence of matrix organization normally is the combining of functional and product patterns of departmentalization in the same organization structure.It depict the matrix organization in an engineering department. There are functional managers in charge of engineering functions and 10 Lecture Notes/ N.S.Bohra / Assistant Professor/ Faculty of Management/ GEU

an overlay of project managers responsible for the end product. Though this kind of organization is followed in many businesses it may not be drawn as a matrix explicitly. Its advantages are as follows: Professional identification is possible. Product profitability can be easily identified. Its disadvantages are as follows: Loss of unity of command. Conflicts in authority exist and so managers with highly skillful interpersonal relations are required

Span of Management: Organization is the limit of the number of people a manager can supervise effectively. Studies have shown that at the upper level of management it is usually four to eight and at the lower level it is eight to fifteen subordinates. None of the studies however, have conclusively indicated the actual span of management. It can span of management is arrived at through trial and error due to varying conditions.

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Narrow Span:

Wide Span:

Narrow Span Organization Advantages 1. Close control 2. Too much of supervision Disadvantages 1. Quick Communication (No Communication Gap) 2. High costs due to many levels 12 Lecture Notes/ N.S.Bohra / Assistant Professor/ Faculty of Management/ GEU

Wide Span Organization Advantages 1. Delegation of work is a must 2. Over load on managers Disadvantage 1. Subordinates selection is important 2. Risk of manager losing control Leadership: Leadership is interpersonal influence exercised in a situation and directed through communication process, towards the attainment of a specified goal or goals. This definition puts emphasis on influencing through communication. However, it does not emphasize the enthusiasm with which the receiver of the communication will act. Terry has defined leadership in the context of enthusiastic contribution. He says that: Leadership is essentially a continuous process of influencing behavior. A leader breathes life into the group and motivates it towards goals. The lukewarm desires for achievement are transformed into a burning passion for accomplishment Nature of Leadership: Leadership is a continuous process of behavior. It is not a one-shot activity Leadership may be seen in terms of relationship between a leader and his/her followers. This can include an individuals or a group. This relationship arises out of their functioning for common goals. By exercising leadership, the leader tries to influence the behavior of individuals or group of individuals. This influenced behavior helps in achieving the common goals. The followers work willingly and enthusiastically to achieve the goals. Thus, there is no coercive force which induces the followers to work. Leadership helps the followers in attaining common goals. It happens when the leader feels the importance of individuals gives them recognition and conveys them about the importance of activities performed by them. Leadership is exercised in a particular situation, at a given point of time. This is under specific circumstances. It implies that leadership styles maybe different under different situations.

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Importance of Leadership Leadership is an important factor that adds to the success of any organization. Throughout history, the importance of leadership has been recognized. The difference between success and failure in a war, a political movement, a business or a team game can be attributed largely to leadership. Here, we are more concerned about manager as a leader. Without a good leader, organization cannot function efficiently and effectively. Since the organization is basically a deliberate creation of human beings for certain specified objectives, the activities of its members need to be directed in a certain way. Any departure from this way can lead to inefficiency in the organization. The leader affects direction of activities in the organization. The importance of good leadership can be discussed as follows: 1. Motivating employees-- Motivation is necessary for work performance. When the motivation level is high, the performance is better. A good leader, by exercising efficient leadership, motivates the employees for high performance. Good leadership in the organization itself is a motivating factor for workers. 2. Creating confidence-- A good leader can create confidence in ones followers by directing them, giving them advice and inducing good results through them in the organization. An individual, with the help of a leader, can work with high efficiency. The employee tries to maintain this efficiency level as one acquires certain level of confidence toward ones capacity. Sometimes, individuals fail to recognize their qualities and capabilities to work in the absence of good direction. 3. Building morale-- Morale is expressed as attitudes of employees toward the organization, the management and voluntary cooperation to offer their ability to the organization. High morale leads to high productivity and organizational stability. Controlling: According to E.F.L.Breach, control is checking current performance against predetermined standards contained in the plans, with a view to ensuring adequate progress and satisfactory performance. According to Harold Koontz, controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are accomplished. Relation between Planning & Controlling:

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The Basic Control Process The basic control process is fundamentally same for different things such as say office, sales, production, accounts etc. The basic control process consists of the following: a. Fixing a goal or a standard. b. Comparing the results with the goal or standard fixed. c. Taking corrective action for variations from the plan. Fixing the Goals As stated, controls are comparing the results with the plans. The first step in the controlling process is establishing the goals or targets or standards. There are many types of goal settings. Among the best are the verifiable goals or targets. Comparing the Results Comparing the results with the goals is as important as setting the goals itself. Comparison should be done with constructive intent and should be forward looking rather than finding fault. It is quite true that measuring the results is not always an easy task and appraisal of performance in such a situation is a huge task. The more difficult and complex it becomes to control, the more important it becomes to control. Taking Corrective Actions Corrective actions can be many. The managers should know exactly where to take corrective action. A manager can take corrective action as follows: a. Better leading b. Reassignment c. Redefining the duties d. Adding staffs or better selection and training or even removing from the job 15 Lecture Notes/ N.S.Bohra / Assistant Professor/ Faculty of Management/ GEU

e. By re-planning the resetting the goals and targets Staffing: Staffing is a term that refers to the management of employee schedules. For many retail businesses, staffing is monitored hourly because the cost of employee paychecks is a significant cost driver for the organization. Staffing involves screening and developing personnel for the jobs which are created by the organizing function. Staffing includes recruiting, selecting, promoting, transferring, and retiring personnel. Some people consider staffing a separate management function while other considers it a part of the organizing function. Processing of Staffing: 1. Manpower requirements- The very first step in staffing is to plan the manpower inventory required by a concern in order to match them with the job requirements and demands. Therefore, it involves forecasting and determining the future manpower needs of the concern. 2. Recruitment- Once the requirements are notified, the concern invites and solicits applications according to the invitations made to the desirable candidates. 3. Selection- This is the screening step of staffing in which the solicited applications are screened out and suitable candidates are appointed as per the requirements. 4. Orientation and Placement- Once screening takes place, the appointed candidates are made familiar to the work units and work environment through the orientation programmes. Placement takes place by putting right man on the right job. 5. Training and Development- Training is a part of incentives given to the workers in order to develop and grow them within the concern. Training is generally given according to the nature of activities and scope of expansion in it. Along with it, the workers are developed by providing them extra benefits of indepth knowledge of their functional areas. Development also includes giving them key and important jobsas a test or examination in order to analyse their performances. 6. Remuneration- It is a kind of compensation provided monetarily to the employees for their work performances. This is given according to the nature of job- skilled or unskilled, physical or mental, etc. Remuneration forms an important monetary incentive for the employees. 7. Performance Evaluation- In order to keep a track or record of the behaviour, attitudes as well as opinions of the workers towards their jobs. For this regular assessment is done 16 Lecture Notes/ N.S.Bohra / Assistant Professor/ Faculty of Management/ GEU

to evaluate and supervise different work units in a concern. It is basically concerning to know the development cycle and growth patterns of the employeesin a concern. 8. Promotion and transfer- Promotion is said to be a non- monetary incentive in which the worker is shifted from a higher job demanding bigger responsibilities as well as shifting the workers and transferring them to different work units and branches of the same organization. DIRECTING Directing initiates action and it is from here actual work starts. Direction is said to be consisting of human factors. In simple words, it can be described as providing guidance to workers is doing work. In field of management, direction is said to be all those activities which are designed to encourage the subordinates to work effectively and efficiently. According to Human, Directing consists of process or technique by which instruction can be issued and operations can be carried out as originally planned Therefore, Directing is the function of guiding, inspiring, overseeing and instructing people towards accomplishment of organizational goals. Direction has got following characteristics: 1. Pervasive Function - Directing is required at all levels of organization. Every manager provides guidance and inspiration to his subordinates. 2. Continuous Activity - Direction is a continuous activity as it continuous throughout the life of organization. 3. Human Factor - Directing function is related to subordinates and therefore it is related to human factor. Since human factor is complex and behavior is unpredictable, direction function becomes important. 4. Creative Activity - Direction function helps in converting plans into performance. Without this function, people become inactive and physical resources are meaningless. 5. Executive Function - Direction function is carried out by all managers and executives at all levels throughout the working of an enterprise; a subordinate receives instructions from his superior only. 6. Delegate Function - Direction is supposed to be a function dealing with human beings. Human behavior is unpredictable by nature and conditioning the peoples behavior towards the goals of the enterprise is what the executive does in this function. Therefore, it is termed as having delicacy in it to tackle human behavior.

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