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MANAGEMENT CONCEPT UNIT I

1. DEFINITION OF MANAGEMENT Management is defined as “the process of designing and maintaining an environment in which individuals working together in groups, achieve their objectives effectively and efficiently”. Management is defined as the process consisting of all those functions required in “Getting work has done through others” without confusion, wastage of resources and overlap. 2. NATURE OF MANAGEMENT AND ITS PURPOSE:

Universal Aims at Productivity Activity based and continuous

Both Art & Science

Purposeful

Is a Process

NATURE OF MANAGEMENT

Integrative Process

Management & Administration are synonymous

Involves Decision Making

Social Process 1

Emphasises people & not things

) 2. o Objectives of the organization and the requirements of its external environment (customers. Organizing. Controlling. Material. Machine. processes and outputs.3 Purposeful:  Management has a purpose like bringing about successful action. 2. 2. the basic principle is that “People are more important than things”. society. 2. Methods. etc. INPUTS PROCESS OUTPUTS INPUTS: Men.6 Emphasizes people and not things:  In Management. PROCESS: Planning.2.1 Universal:  Management applies to all type of organizations (small or big). 2 . government. 2. Activity Based and Continuous:  Management is applicable to organized activity that takes place on a continuous basis.7 Is a Process:  In Management there are specific inputs.2. Decision making means the evaluation and selection of alternatives in a complex environment with a purpose of getting things done through others. Directing.5 Involves Decision – Making:  Management involves decision-making. OUTPUTS: Objectives. Money. Staffing.4 Integrative Process:  Management aims to establish integration between o Various resources of the organization. 2..

By using optimal resources to produce optimal results   Now it is clear that science concentrates on “Knowing”. Total Productivity = Total Output / Sum of all input factors 3. 3.SCIENCE OF ART?  Management is a combination of two disciplines namely art and science. Science alone becomes inadequate without an element of art in-order to perform a job. and art concentrates on “Doing”. leadership.1 Management Science: Management science is not like chemistry or mathematics it is an Organized Knowledge in Management. MANAGEMENT .8 Aims at Productivity (Creating Surplus):  Productivity is defined as the human efforts to produce more and more with less and less input of resources. Science and Art in Management practices: MANAGEMENT MAN + AGE (EXPERIENCE) 9EXPERIENCE0 FOR AND BY PEOPLE ART SCIENCE Organizes and uses human talent Using motivation. 3 . Human relations etc. theory etc.2 Management Art: Management art implies personal creative power plus skills in performance.2. 3. Accumulated knowledge such as clear concepts.

(i) Quantitative Approach to Management (Operations Research).Taylor: a) Separation of planning and execution based on specialization. Contribution of F. Important Principles of Scientific Management by F.1.1.Taylor (Frederick Winslow Taylor):   F.Taylor is called as the “Father of Scientific Management”. Taylor defines “Scientific Management” as the art of knowing what exactly is to be done and the best method of doing it.W.W. 5.1960 onwards.1.4.1930 to 1960.1900 to 1930: (i) Bureaucracy. DEVELOPMENT OF MANAGEMENT THOUGHT:  Development of management thought can be put under three broad stages as shown: Development of management thought STAGE 1 The classical theory of management STAGE 2 The neo – classical theory of management STAGE 3 The modern theory of management This evolution of management thought can be studied in the following broad stages: (a)The Classical Theory of Management (Classical Approach) . motion and fatigue study. b) Scientific task setting based on time. 5. CONTRIBUTION OF TAYLOR AND FAYOL: 5. 4 .W. c) Fitting the “right person for the right job” by proper selection. (i)Human Relations Approach and (ii) Behavioral Sciences Approach (c) The Modern Theory of Management . training and placement of personnel. (ii) Systems Approach to Management and (iii) Contingency Approach to Management. and (iii) Administrative Management (b) The Neo-classical theory of Management . (ii) Scientific Management.

Coordinating 5 . Inference. Important contributions of F.2. managerial activities. that is.2. Planning Organizing Commanding Implying policies. Conclusion. 5.Taylor:  It includes the following steps . programs and procedures.2. creating a feeling that neither the employers nor the employees are exploiting each other. Henry Fayol identified the following functions of management. g) Scientific study of each unit of the business. Observation.1. 5. Improvement in work environment.d) Improvement in work by   Standardization of tools and equipment.1. e) Mental revolution that is. Bringing a harmony in activities of the organization.‟ Experimentation. Contribution of Henry Fayol to Management Thought  Henry Fayol is called as the “Father of Modern Theory in general and industrial management”. Based on hierarchy of authority. f) Distinguishing efficient workers from inefficient workers with the use of differential piece rate system. Directing the business in order to gain optimum return from all workers. 5.W. Measurement.

adaptation. commanding. coordinating and controlling. Technical activities Commercial activities Financial activities Security activities Managerial activities Production. Protection of property and persons.3. Stock taking. Remuneration. Discipline. Unity of direction. Equity. Planning. cost statistics. Authority and responsibility. Stability of tenure. balance sheet. 5.2. Unity of command. Accounting activities 5. Centralization. According to Fayol. organizing. Subordination of personal interest to organizational interests. Buying. manufacturing. Order. Henry Fayol also suggested 14 principles of management.2.Controlling This is to correct the errors of the functionaries of organization and to make sure that such errors do not occur. the six categories of work carried out in business enterprises are listed. selling and exchange. 6 . Scalar chain.2. Span of co-operation and Initiative. These principles are:Division of work. Search for the optimal use of capital.

Assess Future Determine Objectives/ Goals Develop Alternative Courses of Action Select Best Course of Action 7 .6. Assessing the future. Selecting the best course of action among the available alternatives. Developing alternative courses of action to achieve such objectives.1Planning:  Planning is an analytical thought process that covers the following. Determining objectives and goals in the light of future. FUNCTIONS OF MANAGEMENT:  The basic managerial functions are listed below as: Planning Organizing Functions of Management Directing Staffing Controlling 6.

Staffing involves: Manpower Planning (estimating man power in terms of searching. 6. Training & development.  Directing has following elements: Supervision Motivation Leadership Communication Coordination 8  .6. Classification of grouping of activities. Assignment of duties. selection & placement. Performance appraisal. Remuneration. Coordinating authority and responsibility relationships. financial and human resources and developing productive relationship amongst them for achievement of organizational goals. Organizing as a process involves: Identification of activities.3. Delegation of authority and creation of responsibility. Staffing:   The main purpose of staffing is to put right man on right job. choose the person and giving the right place).4. Organizing:  It is the process of bringing together physical. Promotions & transfer. 6. Recruitment. Directing: Directing is “Management in Action”.2.

Motivation:  It means inspiring. 6. stimulating or encouraging the sub-ordinates with zeal to work. Supervision:  Implies overseeing the work of subordinates by their superiors. 9 . monetary.7. negative.6.Directing Function Supervision Leadership Motivation Communication Coordination 6. Positive. non-monetary incentives may be used for this purpose. 6.5. It is the act of watching & directing work & workers. Leadership:  It may be defined as a process by which manager guides and influences the work of subordinates in desired direction.

6. equipment. 10 . Technical Skill:  It refers to the ability to the tools. Communications:  It is the process of passing information.9. 1.  To see organization and the various components of it as a whole. Therefore depends on the technical possessed the lower level market. opinion etc from one person to another. skills required of any manager are classified under three different heads technical.  To decide the distribution of profits ect.  Human skills are concerned with understanding of people.  To formulate budgets.6. Conceptual skills:  This skill called design and problem. experience.  To appoint top executives.  A higher degree of conceptual skill helps in analyzing the environment and in identifying the opportunities. MANAGEMENT LEVELS Top Level Management Middle Level Management Lower Level Management 8.1 Top Level Management:  To formulate goals and policies of the company.  Effective supervision coordinating of the work of the subordinates. Human Skill:  Human skill refers to the ability of the manager to work effectively as a group member and to build cooperative effort in the team he leads. human and conceptual skill. 3. 7. MANAGERIAL SKILLS For analysis.  To understand how its various parts and functions mesh together. 8. procedures and techniques.  To provide overall direction and leadership of the company.8. It is a bridge of understanding.  To foresee how changes in any one of these may affect all the others.  Manager‟s skill in working other is natural and conditions. 2. Coordination:  It is the task of integrating the efforts of people working together to produce products without confusion in order to achieve common objectives. Solving skill involves the ability.

 To report feedback information about workers. Organizational politics.  To maintain discipline and good human relations among workers.  To co-ordinate among themselves so as to integrate the various activities if a department. ROLE OF MANAGERS (i) To Have Contacts (ii) To Supervise (iii) To Attain Targets (iv) To Delegate Authority (v) To Hold Meetings (vi) To Act as a Leader (vii) To Ensure Proper Use of Resources (viii) To Resolve Conflicts (ix) To Undertake Trips (x) To Make Decisions (xi) To Handle Crisis ORGANIZATIONAL AND THE ENVIRONMENTAL FACTORS Organizational factors:      Strong leadership. 10. motivate and develop supervisory level. management provides adequate funding. User readiness.2 Middle Level Management:  To monitor and control the operating Management  To train.9. 11 . ensures availability of technology/personnel.3 Lower level or Supervisory Management:  To train and develop the efficiency of the workers. 8.  To give orders and instructions. User participation in the process.  To assign jobs to workers. 8. Organizational climate. allows the champion to function throughout the development process.

Environmental factors: 11. 12 .  Our current capabilities are not sufficient to achieve our financial objectives.  Working with China and India will be vital to our success over the next 5 years.  Our company would deliver better long-term results as a privately-owned firm. and needs new capabilities.  We wait too long before divesting businesses that hinder our performance.  Consolidating and sharing back office operations improves both cost and quality.  Cross-border acquisitions critical to achieving our growth objectives in next 5 years. (a) Trends:  Culture is as important as strategy for business success.  We know customer loyalty is important.  Environmentally-friendly products and practices are an important part of our mission. TRENDS AND CHALLENGES OF MANAGEMENT IN GLOBAL SCENARIO.  Unclear decision making authority is hurting our performance.  Our core business is running out of steam.  A growing percentage of our products and services behave like commodities.  Insufficient consumer insight is hurting our performance.  Innovation is more important than cost reduction for long-term success.  Information technology can create significant competitive advantages. but don‟t know how to profitably improve it.  We could dramatically boost innovation by collaborating with outsiders. even competitors.

 We rarely achieve expected paybacks from our IT investments. (iv) Volatile Markets:  “The biggest challenges for the managers in the short term are to counter the impact of weakening dollar. I would rather work at a privately-owned company than a public company. and outsourcing as competitive strategy.” Dollar Decline:   “For European businesses the continued decline of the US dollar against the Euro will remain one of the toughest challenges. China‟s coming out party (summer Olympics). will be the emergence of the “network as the platform” for productivity. supply chain industry.  Economically. remanufacturing.” (v) 13 . profitable growth. rising crude.  We are planning for an economic slowdown over the next 12 months. resource management and innovation. This trend will play a key role in helping determine success in business as well as in other areas of society (healthcare and education). and the “real” economy could be on the headline in various disguises. recycling. relocation of manufacturing to no-Euro zones and acceleration of innovation drive.  We do not adequately customize our offerings to local markets. the battle for supremacy between central banks. (b) Challenges: (i)  The Network as Platform: “The most important trend in networking in 2008. sovereign funds.” New Geopolitics:   (ii) (iii) “Politically. e-waste. It will be the catalyst for many changes related to repositioning within market segments. and Russia‟s new (old) president. 2008 would be an interesting year. many new service provider opportunities will explode in the finance. between US election. declining productivity in US and Europe. and service entities. indeed in all of IT.” Eco Business Opportunities:  “As private and public entities respond to the extension of social responsibility.

etc. next month.(vi)  Social Networking: “Companies must learn to effectively utilize social networking tools both inside and outside the companies to keep up with what the younger workers grew up with — fast and furious communication tools like texting. My Space.” Soft Skills:   “The development and implementation of „soft skills‟ will be one of the greatest management challenges in the future. Not in the next quarter. With changing attitudes and values it will become increasingly necessary for organizations to undergo cultural change in order to attract and retain high quality young staff and to appeal to the changing values of society in general. You Tube. face book. that spread the word now. but NOW.”  (vii)  14 . next week or even next day. The establishment of a culture of community which values all stakeholders gives a strong sense of belonging and offers flexibility within a secure and diverse environment will be important.

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