PRINCIPLES OF MANAGEMENT

What is Management? Definitions

According to Harold Koontz,
"Management is the art of getting things done through and with people in formally organised
groups."
Harold Koontz gave this definition of management in his book "The Management Theory
Jungle".
According to Henri Fayol,
"To manage is to forecast and to plan, to organise, to command, to co-ordinate and to control."
Henri Fayol gave this definition of management in his book "Industrial and General
Administration".
According to Peter Drucker,
"Management is a multi-purpose organ that manages business and manages managers and
manages workers and work."
This definition of management was given by Peter Drucker in his book "The Principles of
Management".
According to Mary Parker Follet,
"Management is the art of getting things done through people."
Meaning of Management
According to Theo Heimann, management has three different meanings, viz.,
Management as a Noun : refers to a Group of Managers.
Management as a Process : refers to the Functions of Management i.e. Planning, Organising,
Directing, Controlling, etc.
Management as a Discipline : refers to the Subject of Management.
Management is an individual or a group of individuals that accept responsibilities to
an organisation. They Plan, Organise, Direct and Control all the essential activities of
organisation. Management does not do the work themselves. They motivate others to do
work and co-ordinate (i.e. bring together) all the work for achieving the objectives of
organisation.

run
the
the
the

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Management brings together all Six Ms i.e. Men and Women, Money, Machines,
Materials, Methods and Markets. They use these resources for achieving the objectives of the
organisation such as high sales, maximum profits, business expansion, etc.

FEATURES OF MANAGEMENT
Following image depicts fourteen important nature and features of management.

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Now let's briefly discuss each feature of management.

1. Continuous and never ending process
Management is a Process. It includes four main functions, viz., Planning, Organising,
Directing and Controlling. The manager has to Plan and Organise all the activities. He had to
give proper Directions to his subordinates. He also has to Control all the activities. The manager
has to perform these functions continuously. Therefore, management is a continuous and never
ending process.

2. Getting things done through people

The managers do not do the work themselves. They get the work done through the
workers. The workers should not be treated like slaves. They should not be tricked, threatened or
forced to do the work. A favourable work environment should be created and maintained.
3. Result oriented science and art
Management is result oriented because it gives a lot of importance to "Results".
Examples of Results like, increase in market share, increase in profits, etc. Management always
wants to get the best results at all times.

4. Multidisciplinary in nature
Management has to get the work done through people. It has to manage people. This is a
very difficult job because different people have different emotions, feelings, aspirations, etc.
Similarly, the same person may have different emotions at different times. So, management is a
very complex job. Therefore, management uses knowledge from many different subjects such as
Economics, Information Technology, Psychology, Sociology, etc. Therefore, it is
multidisciplinary in nature.

5. A group and not an individual activity

Management is not an individual activity. It is a group activity. It uses group (employees)
efforts to achieve group (owners) objectives. It tries to satisfy the needs and wants of a group
(consumers). Nowadays, importance is given to the team (group) and not to individuals.

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6. Follows established principles or rules

Management follows established principles, such as division of work, discipline, unity of
command, etc. These principles help to prevent and solve the problems in the organisation.
7. Aided but not replaced by computers
Now-a-days, all managers use computers. Computers help the managers to take accurate
decisions. However, computers can only help management. Computers cannot replace
management. This is because management takes the final responsibility. Thus Management is
aided (helped) but not replaced by computers.
8. Situational in nature
Management makes plans, policies and decisions according to the situation. It changes its
style according to the situation. It uses different plans, policies, decisions and styles for different
situations.
The manager first studies the full present situation. Then he draws conclusions about the
situation. Then he makes plans, decisions, etc., which are best for the present situation. This is
called Situational Management.

9. Need not be an ownership

In small organisations, management and ownership are one and the same. However, in
large organisations, management is separate from ownership. The managers are highly qualified
professionals who are hired from outside. The owners are the shareholders of the company.
10. Both an art and science
Management is result-oriented. Therefore, it is an Art. Management conducts continuous
research. Thus, it is also a Science.
11. Management is all pervasive
Management is necessary for running a business. It is also essential for running business,
educational, charitable and religious institutions. Management is a must for all activities, and
therefore, it is all pervasive.

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12. Management is intangible

Management is intangible, i.e. it cannot be seen and touched, but it can be felt and
realised by its results. The success or failure of management can be judged only by its results. If
there is good discipline, good productivity, good profits, etc., then the management is successful
and vice-versa.
13. Uses a professional approach in work
Managers use a professional approach for getting the work done from their subordinates.
They delegate (i.e. give) authority to their subordinates. They ask their subordinates to give
suggestions for improving their work. They also encourage subordinates to take the initiative.
Initiative means to do the right thing at the right time without being guided or helped by the
superior.
14. Dynamic in nature
Management is dynamic in nature. That is, management is creative and innovative. An
organisation will survive and succeed only if it is dynamic. It must continuously bring in new
and creative ideas, new products, new product features, new ads, new marketing techniques, etc.

Source: http://kalyan-city.blogspot.com/2011/04/what-is-management-definitions-meaning.html

Meaning of Levels of Management

Many managers work in an organisation. However, these managers do not work at the
same level. They work and operate at different positions. Hierarchy of these managerial
positions is called Levels of Management.

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THREE LEVELS OF MANAGEMENT

Generally, there are Three Levels of Management, viz.,

1.Administrative or Top Level of Management.
2.Executive or Middle Level of Management.
3.Supervisory or Lower Level of Management.
At each level, individual manager has to carry out different roles and functions.

Diagram of Levels of Management

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Top Level of Management

The Top Level Management consists of the Board of Directors (BOD) and the Chief
Executive Officer (CEO). The Chief Executive Officer is also called General Manager (GM) or
Managing Director (MD) or President. The Board of Directors are the representatives of the
Shareholders, i.e. they are selected by the Shareholders of the company. Similarly, the Chief
Executive Officer is selected by the Board of Directors of an organisation.
The main role of the top level management is summarized as follows :

The top level management determines the objectives, policies and plans of the
organisation.
They mobilises (assemble and bring together) available resources.
The top level management does mostly the work of thinking, planning and deciding.
Therefore, they are also called as the Administrators and the Brain of the organisation.
They spend more time in planning and organising.
They prepare long-term plans of the organisation which are generally made for 5 to 20
years.
The top level management has maximum authority and responsibility. They are the top or
final authority in the organisation. They are directly responsible to the Shareholders,
Government and the General Public. The success or failure of the organisation largely
depends on their efficiency and decision making.
They require more conceptual skills and less technical Skills.

Middle Level of Management

The Middle Level Management consists of the Departmental Heads (HOD), Branch
Managers, and the Junior Executives. The Departmental heads are Finance Managers, Purchase
Managers, etc. The Branch Managers are the head of a branch or local unit. The Junior
Executives are Assistant Finance Managers, Assistant Purchase Managers, etc. The Middle level
Management is selected by the Top Level Management.
The middle level management emphasize more on following tasks :

Middle level management gives recommendations (advice) to the top level management.
It executes (implements) the policies and plans which are made by the top level
management.
It co-ordinate the activities of all the departments.
They also have to communicate with the top level Management and the lower level
management.
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They spend more time in co-ordinating and communicating.

They prepare short-term plans of their departments which are generally made for 1 to 5
years.
The middle Level Management has limited authority and responsibility.
They are intermediary between top and lower management.
They are directly responsible to the chief executive officer and board of directors.
Require more managerial and technical skills and less conceptual skills.

Lower Level of Management

The lower level management consists of the Foremen and the Supervisors. They are selected by
the middle level management. It is also called Operative / Supervisory level or First Line of
Management.
The lower level management performs following activities :

Lower level management directs the workers / employees.

They develops morale in the workers.
It maintains a link between workers and the middle level management.
The lower level management informs the workers about the decisions which are taken by
the management. They also inform the management about the performance, difficulties,
feelings, demands, etc., of the workers.
They spend more time in directing and controlling.
The lower level managers make daily, weekly and monthly plans.
They have limited authority but important responsibility of getting the work done from
the workers. They regularly report and are directly responsible to the middle level
management.
Along with the experience and basic management skills, they also require more technical
and communication skills.

Source: http://kalyan-city.blogspot.com/2011/05/levels-of-management-top-middle-and.html

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FUNCTIONS OF MANAGEMENT
Different experts have classified functions of management. According to George & Jerry, There
are four fundamental functions of management i.e. planning, organizing, actuating and
controlling.
According to Henry Fayol, To manage is to forecast and plan, to organize, to command, & to
control.
Whereas Luther Gullick has given a keyword POSDCORB where P stands for Planning, O
for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for
Budgeting.
But the most widely accepted are functions of management given by KOONTZ and
ODONNEL i.e. Planning, Organizing, Staffing, Directing andControlling.

For theoretical purposes, it may be convenient to separate the function of management but
practically these functions are overlapping in nature i.e. they are highly inseparable. Each
function blends into the other & each affects the performance of others.

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1. Planning
It is the basic function of management. It deals with chalking out a future course
of action & deciding in advance the most appropriate course of actions for achievement
of pre-determined goals. According to KOONTZ, Planning is deciding in advance what to do, when to do & how to do. It bridges the gap from where we are & where
we want to be. A plan is a future course of actions. It is an exercise in problem solving
& decision making. Planning is determination of courses of action to achieve desired
goals. Thus, planning is a systematic thinking about ways & means for accomplishment
of pre-determined goals. Planning is necessary to ensure proper utilization of human &
non-human resources. It is all pervasive, it is an intellectual activity and it also helps in
avoiding confusion, uncertainties, risks, wastages etc.
2. Organizing
It is the process of bringing together physical, financial and human resources and
developing productive relationship amongst them for achievement of organizational
goals. According to Henry Fayol, To organize a business is to provide it with
everything useful or its functioning i.e. raw material, tools, capital and personnels.
To organize a business involves determining & providing human and non-human
resources to the organizational structure. Organizing as a process involves:

Identification of activities.
Classification of grouping of activities.

Assignment of duties.

Delegation of authority and creation of responsibility.

Coordinating authority and responsibility relationships.

3. Staffing
It is the function of manning the organization structure and keeping it manned.
Staffing has assumed greater importance in the recent years due to advancement of
technology, increase in size of business, complexity of human behavior etc. The main
purpose o staffing is to put right man on right job i.e. square pegs in square holes and
round pegs in round holes. According to Kootz & ODonell, Managerial function of
staffing involves manning the organization structure through proper and effective
selection, appraisal & development of personnel to fill the roles designed un the
structure. Staffing involves:

Manpower Planning (estimating man power in terms of searching, choose the

person and giving the right place).
Recruitment, Selection & Placement.

Training & Development.

Remuneration.

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Performance Appraisal.

Promotions & Transfer.

4. Directing
It is that part of managerial function which actuates the organizational methods to
work efficiently for achievement of organizational purposes. It is considered life-spark of
the enterprise which sets it in motion the action of people because planning, organizing
and staffing are the mere preparations for doing the work. Direction is that inertpersonnel aspect of management which deals directly with influencing, guiding,
supervising, motivating sub-ordinate for the achievement of organizational goals.
Direction has following elements:

Supervision
Motivation

Leadership

Communication

Supervision- implies overseeing the work of subordinates by their superiors. It is the act
of watching & directing work & workers.
Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to
work. Positive, negative, monetary, non-monetary incentives may be used for this
purpose.
Leadership- may be defined as a process by which manager guides and influences the
work of subordinates in desired direction.
Communications- is the process of passing information, experience, opinion etc from
one person to another. It is a bridge of understanding.
5. Controlling
It implies measurement of accomplishment against the standards and correction of
deviation if any to ensure achievement of organizational goals. The purpose of
controlling is to ensure that everything occurs in conformities with the standards. An
efficient system of control helps to predict deviations before they actually occur.
According to Theo Haimann, Controlling is the process of checking whether or not
proper progress is being made towards the objectives and goals and acting if
necessary, to correct any deviation. According to Koontz & ODonell Controlling is
the measurement & correction of performance activities of subordinates in order to make
sure that the enterprise objectives and plans desired to obtain them as being
accomplished. Therefore controlling has following steps:
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a) Establishment of standard performance.

b) Measurement of actual performance.
c) Comparison of actual performance with the standards and finding out deviation if
any.
d) Corrective action.

HENRI FAYOL'S PRINCIPLES OF MANAGEMENT

Early Management Theory
Fayol's "14 principles" were first published in 1914, but are still relevant to today's
managers.
Today's managers have access to an amazing array of resources which they can use to improve
their skills. But what about those managers who were leading the way forward 100 years ago?
Managers in the early 1900s had very few external resources to draw upon to guide and develop
their management practice. But thanks to early theorists like Henri Fayol (1841-1925), managers
began to get the tools they needed to lead and manage more effectively. Fayol, and others like
him, are responsible for building the foundations of modern management theory.
WHO IS HENRI FAYOL?
Henri Fayol was born in Istanbul in 1841. When he was 19, he began working as an
engineer at a large mining company in France. He eventually became the director, at a time when
the mining company employed more than 1,000 people.
Through the years, Fayol began to develop what he considered to be the 14 most
important principles of management. Essentially, these explained how managers should organize
and interact with staff.
In 1916, two years before he stepped down as director, he published his "14 Principles of
Management" in the book "Administration Industrielle et Generale." Fayol also created a list of
the six primary functions of management, which go hand in hand with the Principles.
Fayol's "14 Principles" was one of the earliest theories of management to be created, and
remains one of the most comprehensive. He's considered to be among the most influential
contributors to the modern concept of management, even though people don't refer to "The 14
Principles" often today.
The theory falls under the Administrative Management school of thought (as opposed to
the Scientific Management school, led by Fredrick Taylor).

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Fayol's 14 Principles of Management

1.

Division of Work When employees are specialized, output can increase because
they become increasingly skilled and efficient.

2.

Authority Managers must have the authority to give orders, but they must also keep
in mind that with authority comes responsibility.

3.

Discipline Discipline must be upheld in organizations, but methods for doing so can
vary.

4.

Unity of Command Employees should have only one direct supervisor.

5.

Unity of Direction Teams with the same objective should be working under the
direction of one manager, using one plan. This will ensure that action is properly
coordinated.

6.

Subordination of Individual Interests to the General Interest The interests of

one employee should not be allowed to become more important than those of the group.
This includes managers.

7.

Remuneration Employee satisfaction depends on fair remuneration for everyone.

This includes financial and non-financial compensation.

8.

Centralization This principle refers to how close employees are to the decisionmaking process. It is important to aim for an appropriate balance.

9.

Scalar Chain Employees should be aware of where they stand in the organization's
hierarchy, or chain of command.

10.

Order The workplace facilities must be clean, tidy and safe for employees.
Everything should have its place.

11.

Equity Managers should be fair to staff at all times, both maintaining discipline as
necessary and acting with kindness where appropriate.

12.

Stability of Tenure of Personnel Managers should strive to minimize employee

turnover. Personnel planning should be a priority.

13.

Initiative Employees should be given the necessary level of freedom to create and
carry out plans.
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14.

Esprit de Corps Organizations should strive to promote team spirit and unity.

SOURCE: http://www.mindtools.com/pages/article/henri-fayol.htm

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