Unit – 02 (Management Process)

LAKSHYA POLYTECHNIC
PLAN. EXECUTE. ACHIEVE
UNIT – 02
MANAGEMENT PROCESS

MANAGEMENT
Management is defined as a process which include all the activities starting from setting up of
objectives and taking to achieve those objectives.
The management process consists of all the functions which transform resources such as man,
material, money, machine, method, marketing etc into products and services to full- fill the
customer demand.

EVOLUTION OF MANAGEMENT
The various phases of development of management theory may mentioned as follows-
1. Pre- scientific theories
2. Classical theories.
3. Behaviourally theories.
4. Modern management theory
1. PRE–SCIENTIFIC THEORIES
Pre scientific theories solved problems of specific organisations. They were not used
Worldwide.
Some of the important contributors for pre-scientific theory are-
- James Montgomery.
- Charles Babbage.
- Robert Owen.
- Charles Dupin.
- James Watt.

2. CLASSICAL THEORIES
They represent early works on management which focused on increasing the industrial output.
The classical approach was developed in three main areas-

S No. Main Areas Name of Theory

1 Scientific Management TAYLOR’s scientific management theory
2 Administrative Theory FAYOL’s administrative theory.
3 Bureaucracy WEBER’S theory.
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i) TAYLOR’s scientific management theory

➢ F.W Taylor is regarded as the father of scientific management.

➢ He focused on finding the best way to do the job by reducing the wastage of man and
material.
➢ He developed time and motion study to find the best time and nature of operation for
completion of work
➢ He also introduced differential wages rate system to pay more to product workers.

ii) FAYOL’s administrative theory

➢ Fayol focused on managing the organisation as a whole instead of only in parts.

➢ Fayol classified the activities of a business as technical, commercial, financial,
accounting, security, marketing etc.
➢ Fayol classified the functions of management as planning, organising, commanding,
co-ordinating, controlling and motivation.
➢ He started examining the abilities of managers on the basis of physical strength, mental
strength, moral strength, general knowledge, special knowledge and experience.

iii) WEBER bureaucracy theory

➢ Max weber introduced a legal theory system to manage the business organisation.
➢ The weber’s bureaucracy theory has following features.
o Division of work
o Rules and regulations.
o Hierarchy of authority.
o Technical competence.
o Record keeping
o Inter personal skills.

3) BEHAVIOURAL THEORY

These theories focus on organisational goals along with satisfaction of human needs.
There is shift in focus from process to human beings
Two important behavioural theories are
i) Human relation theory
ii) Behavioural science theory.

i) Human Relation Theory

➢ It was proposed by Elton mayo.

➢ It focuses on increasing organisation productivity by increasing the motivation and
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morale of the workers.

 Unit – 02 (Management Process)

ii). Behavioural science theory

➢ It applied scientific vision to human relation theory.

➢ It explained the concept of psychology, sociology and anthropology.
o Psychology is the study of individual human behaviour.
o Sociology is the study of human behaviour in groups.
o Anthropology is defined as study of human behaviour, individually and as
members of group.

4) MODERN MANAGEMENT THEORY

It says that the management is a multi-disciplinary system which uses knowledge from different
fields of study to solve complex industrial problems.
It mainly consists of following two theories

i) Quantitative theory

➢ It uses mathematical models, statistical models, graphs and simulations to solve

complex industrial problems

ii) Systems theory

➢ It says that the organisation is made up of interconnected and inter- dependent parts
called sub- systems
➢ The position and functions of each subsystem must be controlled to control the
organisation as a whole

VARIOUS DIFFINITIONS OF MANAGEMENT

S. No Name of Scientist Definition Given

1 P.F Drucker
2 R.C Davis
3 Henri Fayol
4 Harold Koontz
5 Efl Brech
Management is an organ and organs can be described as
defined only through functions
Management is the function of executive leadership
anywhere
To manage is to forecast and plant, to organise, to
compound, to co-ordinate and to control
Management is the art of getting things done through a
formerly organised group
Management is concern with seeing that the job gets done,
its task all centre on planning and guiding the operations
that n going on in the organisation
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 Unit – 02 (Management Process)

6 Wheeler Management is centred in the managers of the firm who

7 J.N Scholze
8 Keith & Gubellini
9 G.E Milward
10 Ordway Tead
integrate man, material and money into an effective
operating system”
Management is the force which lead guides and direct the
organisations to achieve the predetermined objective
Management is the force that integrate man and physical
plant into an effective operating unit”
Management is the process and the agency through which
the policy is planned supervised and execute
Management is the process or agency which directs and
guides the operations in an organisation to achieve the
objectives

CONCEPT OF MANAGEMENT

Economy Political
External Factors

Materials Machines
Internal Factors

Management of
Business

Human
Finance
resource

Economy Technical

The management aims at balancing the external and internal factors to achieve the objective of
the business
The factors which need to be balance may be divided into two categories.
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 Unit – 02 (Management Process)

i) Internal factors

➢ These factors are within the control of the management

➢ It includes human resource, material, machine and finance.

ii) External factors

➢ The factors which are beyond the control of management are called external factors.
➢ These factors include social factors and economic factor.

Management is mixture of science and art.

➢ It is called science because similar to science, the management is developed
systematically and is based on experimentation, theories and principles
➢ It is an art because the management is learned by effort and practice management is
applied after making necessary changes in principles o management

LEVELS OF MANAGEMENT

The management is generally considered to have three levels-

i. Top level management
ii. Middle level management.
iii. Lower-level management.

i) Top level management

➢ Top level management is also known as administrative management.

➢ It includes board of directors, CEO (chief executive officer), managing director, general
➢ manager (GM) etc
The main role of top-level management includes

a) They prepare long term plans for the organisation which are generally made for 5 – 20
years.
b) They allocate the available resource for different works.
c) The top-level management determines the objectives and policies of the organisation.
d) They spend more time in planning.
e) The top-level management has maximum authority and responsibility.
f) Top level management is directly responsible to the government, society and
shareholders.
g) They require more conceptual skill and less technical skill.

ii) Middle level management

➢ Middle level management is also called executive management.

➢ The middle level management may be explained as follows-
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a) Middle level management gives advice to the top-level management.

b) It implements the policies and plants made by the top-level management.
c) established co – ordination among the departments.
d) They spend more time in co – ordaining and communicating.
e) They also prepare short term plans for 1 to 5 years.
f) their authority and responsibility are lesser than top management but higher than lower
management.

iii) Lower-level management

➢ They are also called first line management, supervisory level management or operative
management.
➢ They include supervisors, foreman and junior managers.
➢ The role of lower management are as follows-

a) Lower-level management directs the operators and workers.

b) they are responsible for motivating the workers.
c) They form a link between middle management and workers.
d) The lower-level management informs the workers about the decision taken by the
e) management.
f) They also inform the management about the problems of the workers.
g) They spend more time in directing and controlling.
h) The lower-level management makes daily, weekly and monthly plans.

ADMINISTRATION Vs MANAGEMENT
Basic Administration Management
1. Meaning Administration is associated Management is art of getting the
with formulation of objectives work done in best possible way.
plans and policies

ii. Nature of Administration is a decision Management refers to

work making and thinking function implementation of decisions.
Therefore, it is a doing function.
iii. Decision Administration determines what Management decides who shall
making is to be done and when it is to be implement the decisions and now
done. shall be do it.

iv. Status Administration refers to top level Management refers to lower and
management middle level management
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SCIENTIFIC MANAGEMENT (F.W TAYLOR’S THEORY)

➢ Scientific management theory was given by F.W Taylor

➢ Scientific management is concerned with knowing exactly what you want men to do
and then see in that they do it in the best possible and cheapest way

Element and tools of scientific management-

1. Separation of planning and doing- Taylor separated the man power involved in
operation and planning so that each person performs a specific task.
2. Function foremanship - The separation of planning and operation resulted in
development of supervision system where Ist line managers could start planning
3. Job analysis – Job analysis is done to find the best possible way of doing the work. The
best possible way is generally a way which has least movement, minimum time and
minimum cost
4. Standardisation. - As far as possible standardisation should be maintain with respect to
tools workspace, raw materials, instruments etc.
5. Selection and training of workers- The worker should be selected and trained on the
basis of their education, experience, attitude and physical ability.
6. Financial incentive- Financial incentive should be provided to the workers so that they
are motivated to give their maximum effort.
7. Economy – While applying the scientific management theory economic conditions cost
involved, profit possible etc should also be considered.
8. Mental revolution- Scientific management also require mutual co – operation and co –
9. ordination b/w the management and workers.
10. It should also see that the objective of the workers does not hamper the objective of the
organisation.

FAYOL MANAGEMENT THORY-

Fayol divided the business into six groups.

i) Technical
ii) Commercial.
iii) Financial
iv) Security
v) Accounting
vi) Managerial

The fourteen (14) principles of management given by HENRI FAYOL are as follows-
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1. Division of labour:
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The group of workers must be divided on the basis of their specialization. This improves
the efficiency.
2. Authority:
Managers must give orders to complete the work in order to given order they should
have the right to command.
3. Discipline:
Member of an organization must respect and follow the rules and regulations of the
organisation.
4. Unity of command:
Each employee must receive orders only from one person. It has been observed that if
the employee follows instructions from more than one manager then their productivity
decreases.
5. Unit of direction:
Those operations within the organisation which have similar objectives should be
directed by a single manager as far as possible.
6. Subordination of individual interest to organisation interest:
In any organisation the personal objective of the employee should not be against the
objective of the organisation.
7. Remuneration:
Compensation of the work done should be suitable for the employee and the employer.
8. Centralization:
It deals about decreasing the role of sub – ordinates in decision making process.
9. Hierarchy:
The line of Authority and responsibility should be well defined in an organization to
avoid any confusion.
10. Order:
The men and material should be at the right place in right time and right quantity within
the organization.
11. Equality:
All the employees should be equal in front of policies and regulations of the
organizations therefore the managers should be friendly to their subordinates.
12. Stability of staffs:
A high employee turnover rate is not good for efficient working of organization.
13. Initiative:
Sub-ordinates should be given freedom to think and discuss their own new ideas.
14. Esprit de corps:
Promoting team spirit will give the organization a sense of unity.

FUNCTION OF MANAGEMENT

The functions of management involve

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i) Planning
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ii) Organising
iii) Staffing
iv) Directing
v) Controlling

i)Planning
o It is deciding in advance what to do, when to do, how to do, who will do it in order to
achieve the objective.
o The plans made for achieving the objectives may be of two types.
i. Long term plan
ii. Short term plan

ii) Organising
o Organising involves the grouping of jobs into a frame work for co- ordination and
direction.
o The most common way of organising is by using organization charts.

iii) Staffing
o Staffing deals with selection of human resource, their training and their appraisal.
o An efficient staffing system provides efficient man power.

iv) Directing
o It is the most important function of management which deals with motivating, leading
and commanding the man power.
o Utilizing he maximum ability of employees are possible by developing a good directing
system.

v) Controlling
o The performance of the various functions of the management must be checked and
verify to know whether they are according to the objectives of the organisation or not.
o If any deviation is found corrective actions must be taken.
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