CHAPTER– 1

Introduction to management
 MEANING OF MANAGEMENT

Management is getting the work done through the

efforts of others and effective utilization of human
and material resources to achieve the enterprise
objectives.
The 4 M’s of Management

Manpower

Machinery Materials
Management

Money
 Difference between Management and
Administration

No Administration Management
.

1 Administration is concerned Management is concerned mainly

mainly with determining goals to with implementation of policies.
be achieved and policy working.

2 Administration requires Management requires technical skills

conceptual skills

3 Oriented more towards the Oriented more towards the internal

external environment environment
 Management Skills

• Three basic kinds of skills

1. Technical Skill - is the ability to use procedures,
techniques and knowledge of a specialized field.
E.g. surgeon, engineers, accountants.
2.Human Skill – is the ability to work with,
understand, and motivate other people as
individuals or in groups.
3.Conceptual Skill – is the ability to coordinate
and integrate the organization goals and activities.
 Managerial Objectives

Efficient use of resources

Customer Satisfaction
Reasonable profits so as to give a fair return on
capital invested in bussiness
Survival and continuity of business
Enhancing goodwill or reputation of the enterprise
 Four Management Functions

•PLANNING
–Defining the organizational purpose and ways to achieve it
•ORGANIZING
–Arranging and structuring work to accomplish organizational
goals
•LEADING
–Directing the work activities of others
•CONTROLLING
–Monitoring, comparing, and correcting work performance
 Meaning and Definition of Business

 Business is exchange (buying and selling) of goods ( like furniture,

refrigerator etc. )and services ( Transport ,warehousing etc) for making
profit.
 Business uses 4Ms – Money, Manpower, Machinery, Material.
 Business involved risk (like changes in– consumer tastes, technology,
Government policies).
 Profit is the reward for risk-taking.
 The people who consume ( or buy) goods and services are called
consumers.
 Essentials of Good Business

 Well defined goals or objectives

 Proper planning procedure with up-to-date information
 Proper location so as to ensure low cost and high profits
 Flexible and adaptive management
 Sound organizational structure
 Customer-focused marketing system
 Sound personnel policies
 Manager

 Manager is a person who performs all the 5 functions of

management, that is – planning, organising, staffing,
directing (or leading) and controlling.

Modern Manager
• Modern Manager has to perform all the 5 functions of
management, that is – planning, organizing, staffing, directing
(or leading) and controlling.
• But he is not an owner-manager but a hired one ( that means
he does not owned the company, and he is doing a job of a
manager for a salary in the company)
 Business Environment

1. Economic Environment
• Capital (money, cash)
• Labour (manpower: availability, quality, and price)
• Price levels (Inflation)
• Government tax policies
• Customers (what customer want and willing to buy)
• Technology (high productivity, greater variety of goods)

2. Social Environment
• Attitudes, desires, expectations, beliefs, and customs of people
• Social responsibilities (of the business towards the society)
• Ethics (what is right and what is wrong)
3. Political Environment
• Attitudes and actions of political and government
leaders (may put some restrictions, or may promote
business by providing financial assistance)

4. Legal Environment
• Law, regulations and court decisions (to protect
consumers, workers, community) affects the business
History of Management
 Scientific Management
Scientific Management is that kind of management
through which business is conducted based on facts
gained by systematic observation and experiment.

The Managers should not stick to old ways but

should try scientific tools and techniques, so that
best results can be achieved.
 History of Management
 There are many Management Experts who have developed various
theories as follows:
1. BABBAGE : Specialization of Labour (when one worker do the
same task or work again and again, it will lead to specialization of
labour)

2. TAYLOR : Develop a science for each job with standardized

and efficient methods.
 Select Skillful workers
 Incentives (prizes, bonus for the workers so that they contribute to
their best to the organization)
 Dividing responsibilities
 History of Management

4. GILBRETH: Rest pauses after 8 hours (workers take rest after

eight hours)

5. GANTT: Work quota system (number of working hours differ

from one employee to the other)
Bonus ( for more work ,giving the worker financial reward i.e. more
money)

6. FAYOL: He has developed 14 Principles of Management

All managerial tasks are classified as Technical, Financial,
Accounting

7. BARNARD: Organizational communication system (success

comes where employees accept the authority of others)
 History of Management
8. SIMON: He believed that a manager is an administrative man
and not an economic man ( manager should lead, select, choose,
decide and not only count profit and loss only)

9. OWEN: He was the first to speak about Human Resources ( he

cares about the people and not machines)

10. MUNSTERBERG: He was the father of Industrial Psychology

( he studied the application of psychology in work)

11. MAYO: He studied the factors of satisfaction and

dissatisfaction to the workers
 History of Management
12. FOLLET: He believes in Group Work and Self Control (leads to
share power and belief)

13. MASLOW: He believes that a man’s needs could be placed in

“hierarchy of needs”

14. McGREGOR: He cares about employee work relationship and

he has developed Theory X and Theory Y (Theory X: Workers are lazy
and don’t want to work; Theory Y: Workers wants to work and are
positive)

15. DRUCKER: He has developed MBO (Management By Objectives)

and had contribute a lot in the field of management.