Principle of Management

Introduction to Management
There is no one definition of management. Several authors have defined management in various
ways. For example, Mary Parker Follet defined management as ‘the art of getting things done
through people’. This implies that managers work through their employees to ensure that jobs
are properly carried out. Management is the process of setting and accomplishing goals through
the use of human, technical and financial resources. In other words, management requires co-
ordination of all the company’s resources so as to meet the goals of the company.

Managers use the inputs or resources and convert them into the output, which are the various
objectives of the company. In order to do this, managers need to perform several key functions,
namely, planning, organizing, leading, controlling and staffing. All managers carry out these
functions, to a greater or lesser degree, depending on the specific duties of the manager.

Any organization, big or small, needs proper management to make its business a success. A
business enterprise will fail if its management does not have the ability to use their resources
properly. Such resources can only be put to proper use by an effective manager. Management
becomes increasingly important as the organization grows in size and becomes more complex.

What is management?
Management comes from the Italian word ‘maneggiare’ meaning ‘to train up the hoarse’.
Management means to get something for manage. In short, management means getting things
done through other people.

According to L.A Allen, “management means what manager does”.

According to J.R Terry, “management is a distinct process consisting of planning, organization,
actuating and controlling utilizing in each both science and arts and followed in order to
accomplish pre-determine goals and objectives”.
According to Mary Parker Follet “management is the art of getting things done through
people”.
According to Harold Koontz and Weihrich, “management is the process of designing and
maintaining an environment in which individuals working together in groups and efficiently
accomplish selected aims.

According to Henry L Sisk, “management is the coordination of all resources through the
process of planning, organizing, directing, and controlling in order to attain stated goals’.

According to Stephen P Robbins and Mary Coulter, management is coordinating and overseeing
the work activities of others so their activities are completed efficiently and effectively.

In sum, management is a distinct function of mobilizing, allocating and utilizing resources to

achieve pre-determined goals in an organized setting.

Professor Dr. Mohammad Jamal Uddin, Dept. of Business Administration, MU. Page | 4
 Principle of Management
Six M’s of management
Manpower: Manpower refers to human resources owned by the organization. Humans who
make goals and carry out the process to achieve goals. So, management is managing,
directing and guiding human elements in organization.
Money: Money is the life blood of business. It is the means for conducting all business
transactions and maintaining all other elements of management.
Methods: They refer to systems and procedures used to perform various operations in a right
way.
Materials: They consist of raw materials, and semi-finished materials that are either converted
or assembled into finished goods through the production process.
Machines: They are tools, technologies and equipment commonly used to convert raw materials
into semi-finished and finished goods.
Markets: "Nothing happens until a sales is made." - Thomas Watson, President of IBM (1914 -
1956). So, both products and services need marketing, and successful marketing increases
firms’ financial returns.
Function of management:
There are two basic function of management- Planning Organizing
(Determining (Coordinatin
A. Primary function. courses of g activities &
B. Secondary or supporting function. action) resources)

A. The primary function of management include-

 Planning.
 Organizing. Controlling Leading
 Staffing. (Monitoring (Motivating
 Controlling. and & Managing
evaluating people)

Figure: Management
Planning: Planning means deciding in advance about what is to be done when, where and by
whom.
Organizing: Organizing is designing, setting and developing structure and hierarchical
relationship by which an enterprise is bound together & individual effort is coordinated.
Staffing: staffing involves filling & keeping filled the position in the organization’s structure
through recruitment and selection. It also consists of leading and directing employees.
(Leading and directing: They are the process of guiding, motivating and enforcing people to
their best effort)
Controlling: controlling is the process of correcting previous action if any deviation from
standard/plan.
B. The supporting function of management include-
 Motivating.
 Budgeting.
 Resource and analysis.
 Innovation.
 Communication.
 Coordination.
 Reporting etc.
Professor Dr. Mohammad Jamal Uddin, Dept. of Business Administration, MU. Page | 5
 Principle of Management
Detail Functions of Managers
The fore main functions of managers are highlighted below:
Planning
• Process of setting goals and objectives for the company and its different departments.
• Involves anticipating the future and determining the best course o f action to achieve
organizational
goals.
• Is a continuous process.
• Provides guidance and direction.
• Ensures success and growth of the company.

Organizing
• Involves developing or designing a suitable structure for the company.
• Managers have to allocate work to different departments and individuals.
• Involves assigning work and responsibilities to employees in the company.
• Ensures co-ordination of all activities.

Staffing and Leading

• Involves identifying vacancies, recruiting and training staff.
• Basically the same as personnel management.
• Process of guiding employees to ensure that they carry out their given tasks properly.
• Also involves motivating the workers to achieve higher productivity and efficiency.
• To lead and motivate workers, managers must be able to communicate well.
• Leading is, therefore, the ‘people’ function of management.

Controlling
• Is the function of evaluating the company’s and individual’s performance, to determine
whether the goals are being achieved or not.
• Controlling is closely linked to planning.
• The manager must set the performance standards he expects from his employees
• The progress of the work should be regularly monitored.
• Identify problems, and then take necessary action.

It is important to bear in mind that the above functions are not carried out separately or
independently. In fact, all the above functions are closely related to each other and are inter-
dependent. This means that there can be no organizing and controlling if there is no planning. A
manager, therefore, performs all five functions in carrying out his daily responsibilities.

Professor Dr. Mohammad Jamal Uddin, Dept. of Business Administration, MU. Page | 6
 Principle of Management
Types/Levels of Managers
Managers in organizations can be classified in two main ways, based either on their level in the
company or on the tasks for which they are responsible. In most organizations, it is possible to
define loosely three levels of manager. Each level has different roles and responsibilities.

Executives
Levels
Managing director
Top mgt
General Manager
Middle
Departmental heads
mgt
Superintendents
Foremen
Lower
mgt
First line supervisors
Workers

HRM Accounts Production Sales

R&D, Finance Manufacturing Marketing

Figure: organizational structure/ Levels of management

Top-level management: The management who occupy the top position of an organization is
called top-level management. They usually engage in making structure and policy.
Middle level management: Middle level management one departmental heads and usually
engage in implementing policy and strategy as developed by top level management. They
provide link between top-level management and lower level management.
Lower level management: The managers who engage in implementing day-to-day activities are
called lower level management.
Managers can also be classified according to their functions. Such functional managers are
responsible for specific areas of the company. For example: the production manager, personnel
manager, finance manager, sales manager.

Management Skills
What makes a good manager? In order to perform the above functions effectively, managers
should have three important skills.

Conceptual Skills: This refers to the mental ability of managers to analyze and solve problems.
This is very important for planning.

Human Skills: This is the ability of the manager to communicate and interact with others.
Technical Skills: This refers to the manager’s ability to use the tools and procedures to get the
job done.

Professor Dr. Mohammad Jamal Uddin, Dept. of Business Administration, MU. Page | 7
 Principle of Management
Principle of Management
The father of modern management theory is the French industrialist Henri Fayol. He had
developed fourteen principles of management for its effectives handling. These principles are-
1. Division of work.
2. Authority & responsibility.
3. Discipline.
4. Unity of command.
5. Unity of direction.
6. Subordination of individuals to general interest.
7. Remuneration.
8. Centralization.
9. Scalar chain.
10. Order.
11. Equity.
12. Stability of tenure.
13. Initiative.
14. Esprit de corps.

1. Division of labor: A high degree of specialization should result in efficiency. Both

managerial and technical works are amenable to specialization.
2. Authority: The formal authority to command and personal authority deriving from
intelligence and experience.
3. Discipline: People in the organization must respect the rules and regulations that govern
the organization.
4. Unity of command: Each subordinate should report to one and only one superior.
5. Unity of direction: Similar activities in an organization should be grouped together under
one manager.
6. Subordination of individuals to the common good: Interest of the individuals should not
be placed before the goals of the overall organization.
7. Remuneration: Compensation should be fair to employees and to the organization.
8. Centralization: Power and authority should be concentrated at the upper level of the
organization as much as possible.
9. Scalar chain: A chain of authority should extend from the top to bottom of the
organization.
10. Order: Human and material resources should be coordinated so that they are required
places at the required time.
11. Equity: Managers should be kind and fair when dealing with subordinate.
12. Stability: High turnover of the employees should be avoided.
13. Initiative: Subordinate should have the freedom to take initiative.
14. Esprit de corpse: Teamwork, team spirit and a sense of unity and togetherness should be
fostered and maintained.

Professor Dr. Mohammad Jamal Uddin, Dept. of Business Administration, MU. Page | 8
 Principle of Management

Purpose of management
The main purpose of management is to increase productivity; this implies effectiveness and
efficiency.
 Productivity: It can be defined as the output input ratio within a time period with due
consideration for quality.
 Effectiveness: Effectiveness is the achievement of objectives. (Making the right decisions
and successfully implementing them)
 Efficiency: Efficiency is the achievement of the end with the least amount of resources.
(Using resources wisely and in a cost-effective way)

Importance of Studying Management

 Management ensures efficiency
 Sound management is the precondition for a country's progress
 Management makes human efforts more productive
 Management ensures proper utilization of other resources
 Technology can bear no fruit without management.
 Management is action oriented.

█ Management Vs Administration
There has been a controversy on the use of the two terms—management and administration.
Different authorities on the subject have expressed conflicting opinions. Many experts make no
distinction between management and administration while others consider them as two separate
functions. A few authors treat administration as a part of management. These three points of
view are explained below:

1. Administration is above Management: According to this viewpoint, administration is a

higher level activity while management is a lower level function. Administration is a
determinative function concerned with the determination of objectives and policies while
management is an executive function involving the implementation of policies and direction of
efforts for the achievement of objectives. This view is held largely by the American experts in
management.

Oliver Sheldon was perhaps the first person to make a distinction between management and
administration. According to him, “Administration is the function in industry concerned with the
determination of corporate policy; the coordination of finance; production and distribution; the
settlement of the compass (structure) of the organization; and the ultimate control of the
executive. Management, on the other hand, is the function in industry concerned with the
execution of policy within the limits set up by administration, and the employment of the
organization for the particular objectives set before it. “Organization is the function of an
effective machine; management of an effective executive; and administration an effective-
direction. Administration determines the organization, management uses it. Administration
defines the goal, management strives toward it. Organization is the machine of management in
its achievement of the ends determined by the administration. ”

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 Principle of Management
In the words of I. N. Schultz, “administration is the force which lays down the object for which
an organization and its management are to strive and the policies under which they are to
operate. Management, on the other land, is the force which leads, guides, and directs an
organization in the accomplishment of a predetermined object”.

According to McFarland, “administration refers to the determination of major aims and policies
whereas management refers to the carrying out of operations designed to accomplish the aims
and effectuate the policies.” To Haimann, “administration means the overall determination of
policies, the setting of major objectives, and the laying out of broad programs; while
management is essentially the executive function involving active direction of human efforts.
The former is largely ‘determinative while the latter one is essentially executive”. Thus,
administration is the determining or thinking function while management is executing or doing
function.

2. Administration is a Part of Management: According to the British School of Thought,

management is a wider term including administration and organization. The British viewpoint
has been propounded by Brech. According to him, “management is the generic term for the total
process of executive control involving responsibility for effective planning and guidance of the
operations of an enterprise. Administration is that part of management which is concerned with
the installation and carrying out of the procedures by which the program is laid down and
communicated and the progress of activities is regulated and checked against plans”. Thus,
administration is a narrow term concerned with developing and maintaining procedures. Kimball
and Kimball, Richman and Copen also hold similar views. Even Sheldon has mentioned at one
place in his book that management in this general sense includes both administration and
organization.

Thus, the British viewpoint is exactly opposite to the American opinion.

3. Administration and Management are one and the same: Many writers like Henry Fayol,
William Newman, Chester Barnard, George Terry, Louis A. Allen, Koontz and Donnell make no
distinction between management and administration. Both involve the use of the same principles
and functions. According to Newman, management or administration is “the guidance,
leadership and control of the efforts of a group of individuals towards some common goals.
According to Fayol, “all undertakings require the same functions and all must observe the same
general principles in order to function properly”. There is one common science which can be
applied, equally well to public and private affairs. Therefore, the distinction between
administration and management is superfluous or academic. In actual practice, the two terms are
used interchangeably. The term administration is more popular in government or public
organizations while the word management is more commonly used in the business world.

The forgoing description reveals that both management and administration are based upon the
same set of principles and functions. It may be possible to make a theoretical or conceptual
distinction between the two terms. But in practice such a distinction is misleading. In this course
administration and management have been used as synonymous to each other. In order to resolve

Professor Dr. Mohammad Jamal Uddin, Dept. of Business Administration, MU. Page |
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 Principle of Management
the terminological conflict between administration and management, we may classify
management into:
(I) Administrative management; and
(ii) Operative management.

Administrative management involves determination of objectives and polices whereas operative

management is primarily concerned with the execution of plans for the achievement of the
objectives. At every level of management, an individual manager performs both types of
functions. Every manager spends a part of his time on administrative management and the
remaining time on operative management. This can be seen in the following Figure:

It is clear
from the
Figure: Administration and Management compared
above figure that higher level managers spend a major portion of their time in decision-making
and policy formulation (administration) while lower level manager spend comparatively greater
time on execution of plans and policies (management). But every manager, irrespective of his
position or level in the organization must plan as well as execute the plans. This approach
appears to be more logical because of two reasons. First, two separate sets of people are not
required to perform administrative and managerial functions. Secondly, planning and doing are
two faces of the same coin and it is not desirable to separate them.

Professor Dr. Mohammad Jamal Uddin, Dept. of Business Administration, MU. Page |
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 Principle of Management
Distinction between Administration and Management
Point of Administration Management
Distinction
1. Nature It is determinative or thinking It is an executive or doing function.
function.
2. Scope It is concerned with the determination It is concerned with the
of major objectives and policies. implementation of policies.
3. Level It is mainly a top level function. It is largely a middle and lower level
function.
4. Influence Administrative decisions are Managerial decisions are influenced
influenced mainly by public opinion mainly by objectives and policies of
and other outside forces. the organization.
5. Direction It is not directly concerned with It is actively concerned with direction
direction of human efforts of human efforts in the execution of
plans.
6. Functions Planning and control are the main Directing and organizing are the main
functions involved in it. functions involved in it.

7. Skills Conceptual and human skills. Technical and human skills.

8. Usage Used largely in government and public Used mainly in business, organization.
sector.
9. Illustration Minister, Commander, Commissioner, Managing Director, General Manager,
Registrar, Vice-Chancellor, Governor, Sales Manager, Branch ‘Manager, etc.
etc.

█ Management as an Art
There are conflicting opinions between whether the knowledge and practice of Mgt is Art or
Science. Some experts said Mgt is Art while others said Mgt is Science. Before discussing
whether Mgt is Art or Science, it is wise to know about Art and science.

Art: Art is the application of skills, knowledge, and theory into practice that differ from
people to people, place to place, and time to time. Art involves the action to achieve concrete
results. It is the practical (personal) way of doing specific things. For example, a carpenter,
making furniture out of wood and a goldsmith shaping gold into ornaments are examples of art.
Music, dancing, painting are also arts.

Management as an Art
Thus, the main elements of an art are:
(a) Personal skills
(b) Practical know-how
(c) Result-oriented
(d) Creativity, and
(e) Constant practice aimed at perfection.

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 Principle of Management

Management is basically an art because of the following reasons:

I. Like any other artist, a manager applies his knowledge and skills to coordinate the
efforts of his people.
II. Management seeks to achieve concrete practical results, e.g., profits, growth, social
service, etc., in a given situation.
III. Like any other art, management is creative. It brings out new situations and converts
resources into output.
IV. Management is a personalized process. Every manager adopts his own approach
towards problems depending upon his perception and the environmental conditions.
V. Effective management leads to realization of organizational and other goals. The
success of a manager is measured by the results he achieves. It is very much like the
saying that the proof of the pudding lies in eating. Mastery in management requires a
sufficiently long period of experience in managing. The managerial art can be refined
through continuous practice.

Science: Science is a body of organized knowledge (principles, methods, techniques,) that has
universal application. That means, the practice that equally accept regardless of people, times,
and places is known as science. Science is a lighthouse that gives light with no discrimination.
For example, two and two equals four and Physics, Chemistry, Mathematics, Economics are
some examples of science.

Management as a Science
The essential elements of Science are as follows:
(a) Science is a systematized body of knowledge pertaining to a particular field of inquiry. It
studies the cause and effect relationship between different variables.
(b) It contains underlying principles and theories developed through continuous observation,
experimentation and research.
(c) The principles have universal applicability. They can be applied under different situations
barring no exception.
(d) The organized body of knowledge can be taught and learnt in the classroom and formal
place

Management is a science because it contains all the essentials of science.

I. There is now a systematized body of knowledge (Mgt principles and theories).For
instance, there are several principles to serve effective delegation of authority
II. Principles of management have been evolved through practical experience and theoretical
research over several decades.
III. Managerial principles have a wide and repetitive range of application.
IV. Management theory and principles can be taught in class rooms and in industry.
V. Elements of Science in Management: Concepts, Methods and principles, theories,
organized knowledge and practice.

Conclusion: From the above discussion, it is obvious that Mgt is neither exact Art nor exact
Science; that is Mgt is a social science like economics. Finally, Mgt is the science of directing
human behavior in organization.

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 Principle of Management

█ Scientific Management
Frederick Winslow Taylor (F.W Taylor) is generally acknowledged as father of scientific
management ‘scientific management implies that, the methods of scientific inquiry, analysis and
summary can be applied to the activities of managers.

It later implied time study & similar methods used by Taylor and his followers to analyze the
activities of people in organization.
Basically scientific management sought to develop-
1. Ways of increasing productivity by making work easier to perform.
2. Methods of motivating people to take advantage of labor saving techniques it
developed.
Principle of scientific management as developed by F.W Taylor in 1911 are given bellow-
1. Replacing rule of thumb with science.
2. Obtaining harmony rather than discord.
3. Achieving co-operating rather than chaotic individualism.
4. Working for maximum rather then restricted output.
5. Developing workers to the fullest extent possible.

█ State the social responsibilities of management

The main responsibility of a manager is to increase the market value of common stock in
the long-range through earning profit. Along with this responsibility, manager has the
responsibility to its society. Following are the major social responsibilities of a manager:

1. Responsibility to owners:
 Ensure proper utilization of capital & wealth.
 Ensure maximum profit.
 Devote effort for expansion, development & achieving objective.
2. Responsibility towards employees & labors:
 Providing safety and job security.
 Providing training & promotion.
 Developing congenial work environment.
 Developing employer & employee relation.
3. Responsibility towards supplier:
 Ensuring payment.
 Giving appropriate price for supply.
 Made payment in time.
4. Responsibility towards customers & consumers:
 Providing demand goods with reasonable price.
 Providing safe & healthy productions.
 Providing goods in time.
5. Responsibility towards government:
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 Principle of Management
 Giving income tax in time.
 Helps in solving unemployment problem.
 Aborting from doing illegal business.
 Contribute in exporting.
6. Responsibility to social in general:
 Build up & help in educational & social welfare institutes.
 Ensuring water, electric & gas supply for local residence.
 Helps in road contraction.
 Develops socio-economic infrastructure etc.

”Planning is looking ahead and Control is looking back”. Comment.

“Planning is looking ahead and control is looking back” to comment on this statement we have
to know the relationship between the two functions.
1. Planning precedes controlling and controlling succeeds planning.
2. Planning and controlling are inseparable functions of management.
3. The process of planning and controlling works on system approach which is as follows:

No undesirable
deviations
from plans

Undesirable
deviation

Comments:
Planning and Controlling are two separate functions of management, yet they are closely related.
Planning is deciding in advance regarding what to do, when, how, where and by whom and set
standards for subsequent actions; Controlling, on the other hand suggests the operations of
checking, regulation, testing, verification or adjustment of actual performance in response to
planning.
Without base or standard or budget (set by plan) controlling activities becomes baseless &
meaningless and without controlling planning becomes an incomplete exercise.
So, we can say Planning is looking ahead and control is looking back
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 Principle of Management

Summary
In conclusion, we can see that man y activities are involved in managing an organization and
managers need to have a wide variety of skills and knowledge to be good at their job. We also
see that management functions are essentially the same, regardless of the type of o organization
or the level of the manager. A manager can, therefore, transfer his skills and knowledge from
one industry to another. A person moves from one job to another, bringing with him/her the
managerial skills he/she has developed. Managerial skills can also be taught and transferred
from one person to another. To be effective, a manager requires knowledge, skills and
experience.

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