20MG301 Principles of Management

Module-1
Principles of Management

Topic: Meaning, definition, significance of

management
 Definitions of Management
Management is the process of designing and maintaining of an environment in which
individuals working together in groups, efficiently accomplish selected aims.

-Koontz and Weihrich

Management is the art of knowing what do you want to do and then seeing that it is
done in the best and cheapest way.

-F.W. Taylor

Management is an art of getting things done through people

-Mary Parker Follet

 Management
Management
The process of getting things done, effectively and efficiently,
through and with other people
Efficiency
• Means doing the thing correctly;
• refers to the relationship between inputs and outputs;
• seeks to minimize resource costs

Effectiveness
• Means doing the right things;
• goal attainment
Efficiency and Effectiveness
 Nature/Characteristics of Management
1. Multidisciplinary in
Interdisciplinary study. It draws ideas and concepts from various disciplines
Nature such as economics, statistics, mathematics psychology, sociology etc.,

Management is not applicable to business undertakings only. It is also

2. Continuous process
applicable to political, social, religious and educational institutions. Management
is necessary when a group effort is required

3. Universal activity Management is a process or a function or an activity. This process continues till
the objectives set by administration are actually achieved

Management is an art because there are definite principles of management. It

is also a science because predetermined objectives can be achieved by the
4. Science as well as an art application of these principles
 Nature of Management (contd.)

5.Dynamic and not static Principles of Management has to adapt itself according to social changes

Management is gradually becoming a profession because there are established

6. Profession principles of management which are being applied in practice and it involves a
specialized training and it is governed by ethical code arising out of its social
obligations

Management comes into existence only when there is a group activity towards a
common objective. Management is always concerned with the group efforts and
7. Group activity not individual efforts. To achieve the goals of an organization, the management
plans, organizes, coordinates, directs and controls the group effort
 Nature of Management (contd.)

Manager’s primary job is to assure the productive performance through planning,

8. It aims at obtaining direction and control. It is expected of the management to bring into being the
desired results. Rational utilisation of available resources to maximise the profit
wealthy result is the economic function of a manager

9. Management implies skill and

Management involved doing the job through people. The economic function of
experience in getting things done earning profitable return cannot be performed without enlisting the cooperation
and securing positive response from People
through people

Authority means, power to make others act in a predetermined manner.

10. System of authority Management formalises a standard set of rules and procedure to be followed by
the subordinates and it ensures their compliance with the rules and regulation
 Nature of Management (contd.)

11. Intangible It cannot be seen with the eyes. It is evidenced only by the quality of the
organization an the results i.e. profits, increased productivity etc.,

12. Implied good leadership Manager must have the ability to lead and get the desired course of action
from the subordinates. Management of the high order implies the capacity of
managers to influence the behavior of their subordinates
 Scope of Management

Material Management

Human Resource Management Purchasing Management

Functional Maintenance Management

Financial Management
areas
Marketing Management Office Management

Production Management
 Scope of Management (contd.)
Subject matter of management
Management is considered as a
continuing activity made up of
basic management functions
such as planning, organising,
staffing, directing and
controlling. These components
form the subject matter of
management
 Scope of Management (contd.)
Management is an inter disciplinary approach
Though management is regarded as a separate
discipline for the correct applications of the
management principles, study of commerce,
economics, sociology, psychology and
mathematics are very essential. The science of
management draws ideas and concepts from a
number of disciplines making it a multi disciplinary
subject
 Scope of Management (contd.)
Principles of management
Principles of management are of universal
applications. These principles are applicable to
any group activity undertaken for the
achievement of some common goals

Management is an agent of change

The techniques of management can be
improved by a proper research and
development

Essentials of management
Includes scientific method, human relations
and quantitative techniques
 Management as a science or art
(Management Theory and Principles)
What is science?
Science is a systematized body of
knowledge which establishes relationship
between cause and effect
The following characteristics are essential
for a subject to be recognized as a science
• The existence of a systematic body of
knowledge with array of principles
• Based on scientific enquiry
• Principle should be verifiable
• Reliable basis for predicting future events
Management as a science or art (Management
Theory and Principles)(Conti…)
• Management as a discipline fulfils the science criterion.
• Theapplication of these principles helps any practicing
manager to achieve the desired goals.
• It is a dynamic subject in that it has heavily from economics,
psychology, sociology, mathematics and engineering
• It is a multi disciplinary in nature
 Management as a science (contd.)
Science classified into two types. They are exact and inexact science.

Results are Results are

accurate Inaccurate

Management is an inexact science because

• Every organizations human resources are different attitudes, aspirations and perceptions.
So, Standard results may not be obtained

• Readymade and standard solutions cannot be obtained

 Management is an Art
What is an art?
Bringing about of desired results through the application of skill

Art- applications of skill in finding a desired result. Art is the way of doing
things skillfully.

The above definition contains the following three important

characteristics of art:
• Art is the application of science. It is putting principle into practice
• After knowing a particular art, practice or experience is needed to become
skilful
• It is undertaken for accomplishing an end through deliberate effort
 Management is an Art(Conti..)
Management is an art because of the following facts:
• Management process involves the use of practical knowledge and
personal skill
• Management is creative

• Application of practical knowledge and certain skills helps to achieve

concrete results

Management is both- science and an art:

• Management is a science because it contains general principles.

• It is also an art because it requires certain personal skills to achieve

desired results
 Management vs Administration

Administration is above management:

• Many management experts such as Oliver Sheldon, Milward
Lansberg etc., are of the view that the administration is high level
activity.
•Administrations is concerned with decision making and policy
formulation while the management is concerned with the execution
of what has been laid down by the administration
 Management vs Administration

2. Administration is a part of management:

According to E.F.L Brech, “Management is a generic term for the total process
of executive control involving the responsibility for effective planning and
guidance of the operations of an enterprise. Administration is a part of
management which is concerned with the installation and carrying out of the
procedures by which the programme is laid down, communicated, the progress of
activities is resulted and checked against plans”. According to this view,
administration become a subordinated function to overall management function.
Thus, administration is the part of management
 Management vs Administration (contd.)

3. Administration and management are the same:

The third view is a more practical one where there is no
distinction between two terms ‘Management’ and
‘Administration’. Management is used for high level functions
such as plans, organising, directions and controlling in a
business organisation where are administration is used for the
same set of functions in government organisations. Many
experts such as Henry Fayol, William Newman, Terry favoured
this view
 Management vs Administration (contd.)
S.
Administration Management
No
1 It is a top level function It is a middle and lower level function
2 It refers the owners of the organisation It refers the employees
Administration is concerned with the Management is concerned with the execution
3
decision making of decision
4 It acts through the management It acts through the organisation
Administration lays down broad policies Management executes these policies into
5
and principles for guidance practice
Scope of functions is broad and
6 Scope of functions is narrow and operations
conceptual
Mostly external factors are affecting the Mostly internal factors are affecting the
7
decision making decision making
Employer-Employee relation is between Employer-Employee relation is between
8
Entrepreneurs and Owners employee
 Manager vs Entrepreneur
• The terms Entrepreneur and Manager are considered
one and the same. But the two terms have different
meanings. In fact, the two terms are two economic
concepts meaning two different meanings
• Manager is a person who is responsible for performing
the functions of management such as planning,
organizing and directing the group towards the goals of
management
• Entrepreneur is also a person who starts the business
and utilizes the resources of men, money, materials and
machines
 Manager vs Entrepreneur (contd.)
S.No Entrepreneur Manager
Entrepreneur is the person who starts Manager is the person who runs the
1
the business business for a long period of time
Entrepreneur considers the various risks But the manager does not get all these
2
associated with finance and materials risks
Entrepreneur is always driven by
Manager uses the presently available
3 opportunity or demand in the present
resources to produce the final product
market
Entrepreneur has the rights to implement Manager can only follow the rules and
4 the changes in the process according to procedures achieve the goal of the
the changes required in the product company
Entrepreneur is the owner of the Manager is the person hired for the
5
company company
Entrepreneur can get all kinds of rewards Manager can get only fixed rewards in
6
from the public terms of salary
 Manager vs Entrepreneur (contd.)
S.No Entrepreneur Manager

7 Entrepreneur is more risk taker Manager is less risk taker

Entrepreneur is the desire for the control
8 Manager has delegation of authority
over the business
Manager is the leader of the team
9 Entrepreneur acts like one man army
consisting of various groups

Entrepreneur always aims to implement Manager is the person to establish and

10
creativity and innovation preserve the status of the company

Entrepreneur is informal and flexible in Manager is not informal and flexible in

11
organization structure organization structure

Entrepreneur is sensitive in decision Manager collects the information and

12
making waits for the advice
 Managerial Levels or Types of Management or
Types of Managers
Very first top levels of the hierarchy who
Directly Supervise other managers below have the most authority and who are
them. These includes Department Head, ultimately responsible for the entire
Project Leader, Plant Managers or Division organisation. These includes Vice president,
Top Level
Manager President, Managing Director, Chief
Managers
Operating officer, Chief Executive Officer or
Chairman of the board

Middle Level Managers

Are those managers having the least
authority and they are at the lowest level in
the hierarchy of the organisation. They
Lower Level Managers directly responsible for the operating
employees
 Managerial Levels (contd.)

The functions of top management are as follows:

1. To formulate the goals and policies of the
company
2. To formulate the budgets

3. To appoint the top executives

4. To provide the overall direction and leadership of
the company

5. To decide the distribution of profits etc.,

 Managerial Levels (contd.)
The functions of middle level management are as follows:
1. To monitor and control the operating performance of the sub-units and individuals
managers who report to them
2. To implement the overall organizational plans so that organizational goals are
achieved as expected
3. To train, motivates and develop the supervisory level
4. To implement changes or strategies generated by top managers
5. To coordinate among themselves so as to integrate the various activities of a
department
 Managerial Levels (contd.)
The functions of low level management are as follows:

1. To train and develop the efficiency of the workers

2. To assign jobs to workers

3. To give orders and instructions

4. To maintain discipline and good human relations among workers

5. To report feedback information about workers

 Managerial roles (contd.)
Interpersonal Roles:
These roles involves people (subordinates and persons outside the
organisation) and other duties which are ceremonial and symbolic in
nature. These includes,
1. Figurehead Role: Role to perform ceremonial and symbolic duties such
as greeting visitors and signing legal documents
2. Leader: Person who directs and motivates subordinates, counsels and
communicates with subordinates and is responsible for staffing and
training
3. Liaison: Maintains the information links both inside and outside
organisation via mail, emails phone calls and meetings
 Managerial roles (contd.)
Informational Roles:
It involves receiving, collecting and disseminating information.
It includes,
1. Monitor: Person who seeks and receives the information
scans periodicals and reports and maintains the personal
contact with stakeholders
2. Disseminator: It is the forward information to organisation
members via memos, reports and phone calls
3. Spokesperson: Transmits the information to outsiders via
reports, memos and speeches
 Managerial roles (contd.)
Decisional roles:
It is the role to involve around making choices. It includes,
1. Entrepreneur: Person who Initiates or starts the improvement in
projects, identifies new ideas and delegates responsibility to others
2. Disturbance handler: Person who takes the corrective action
during disputes or crises, resolves conflicts among subordinates and
adapts to environment
 Managerial roles (contd.)
1. Resource allocator: Decides who
gets resources, prepares allocator
budgets, sets schedules and
determines priorities
2. Negotiator: It is the person who
represents the department during
negotiations of union contracts, sales,
purchases and budgets
 Managerial skills (contd.)

Technical skill:
• Technical skills are skills that reflect both an understanding and a

proficiency in a specialized field such as engineering, computers,

accounting or manufacturing.
• These skills are more important at lower levels of management since

these managers are dealing directly with employees doing the

organisations work
 Managerial skills (contd.)
Human skill: It refers the ability of the manager to work effectively
as a group member and to build the cooperative effort in the team
he leads. Human skills are concerned with the understanding of
‘people’. Managers with good human skill are able to get the best
out of their people. They know how to communicate, motivate, lead
and inspire enthusiasm and trust
 Managerial skills (contd.)
Conceptual skills: Involves design and problem solving skill. It
involves the ability
• To see the organisation and the various components of it as a
whole
• To understand how its various parts and functions mesh together
• To foresee how changes in any one of them may affect all the
others
Higher degree of conceptual skill helps in analysing the environment
and identifying the opportunities
 Importance of Management
1. Attainment of group goals:
The achievement of objectives of business depends upon various
factors. The management theory gives the direction of achievement of
goals.
2. Effective functioning of business:
Ability, understanding, communication, motivation, coordination and
supervision are some of the factors responsible for the effective functioning
of business. Management is a vital role to help for effective functioning of
business
 Importance of Management
3. Resource development:
The resources of any enterprise may be identified and developed by
the management. Generally, the term resources are men, money, material
and machines

4. Management controls the organisation:

The management controls the activities of enterprises. A control
process is used to eliminate the unnecessary activities
 Importance of Management (contd.)

5. Sound organisation structure:

Sound organisation structure clearly defines the authority and
responsibility of relationship. It helps to take corrective action wherever and
whenever necessary

6. Integrates individual efforts:

Management takes necessary steps to integrate the various efforts to
achieve the objectives of an organisation
mportant role for the effective management. Effective communication
leads to efficient management
 Importance of Management (contd.)
7. Motivation:
Motivation is a vital tool to achieve the organisation goal. A proper
motivation to the workers increases the speed of performance of a
work. Motivation is in the form of monetary or non-monetary incentive

8. Communication:
Communication is an important role for the effective management.
Effective communication leads to efficient management
 Importance of Management (contd.)

9. Coordination:
All activities of enterprises are grouped into different departments.
Management coordinates the activities of different departments to
attain the objectives of the organisation

10. Decision Making:

There are a few numbers of decisions taken by the management
every day. The management guides the managers to take the correct
decisions
 Importance of Management (contd.)

9. Leadership quality:
Leadership quality is developed in the person who is working in the
top level management

10. Management is needed at all levels:

The functions of management are common to all levels of
organisations. The management is more essential for the top
management, middle management and lower management
THANK YOU