Principles of Management

Introduction to
Management

Topic-1
Management...
Management is what managers do.
M
A --- The Manager
N

A
G --- Knowledge
E

M
E --- The People
N

T --- Technology/Techniques/Tactics

2
 What is Management?

3
Definitions
“Management is the creation & maintenance of internal environment
is an enterprise, where individuals working in groups can perform
efficiently and effectively toward the attainment of group goals.
--- Koontz & O’donnel
“Management is the art of getting things done through and with
people” --- Mary Parker

“Management is the art of knowing what you want to do and then

seeing that it is done in the best and cheapest way” -- F.W. Taylor

“Management is the accomplishment of results through the efforts

of other people” --- Lawrence
“Management is to manage is to forecast and plan, to organize, to
command, to coordinate and control”. -- Henry Fayol (1916)
 “Management is the process of designing and
maintaining an environment in which, individuals
working together in groups to accomplish selected
aims efficiently and effectively”

The concept of management may be used as-

 Collective noun
 Field of Study
 Function
Efficiency VS Effectiveness

“Doing the things right, or getting

the most output from the least amount
of inputs, called Efficiency.”
“Doing the right things, or
completing activities so that
organization goals are attained,
called Effectiveness.”
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Why Efficiency & Effectiveness are important to
Management
Features of Management
The important characteristics of Management as
business function are:

 It is an art of getting things done through and

with people
 Art and science of decision making and
leadership
 It is a universal process for achieving result
Importance of Management
Study
The need and significance of management
functions in the modern organizations are given
below-
• To increase the efficiency
• To give a definite shape of management
function
• To improve research in management
• To attain social goals by effective utilization of
resources
NATURE OF MANAGEMENT

Universality- It has universal application in all

kind/nature and size of business activities
Dynamism- This body of knowledge is going on
changing continuously with respect changes that
are taking place in the organizational
environment
Relativity- It embraces all business functions at
different levels
Regularity of human nature- It helps to shape
the human behaviors in the work environment
What is Management function?

A Management function that involves

defining goals, establishing strategies for
achieving those goals, and developing plans
to integrate and coordinate activities.
 What are the functions of
Management?

OR

What is Management Process?

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Planning,

Organizing,

Staffing,

Motivating

Directing/Leading

Coordinating

Controlling
Planning
Planning means “the determination of
what is to be done, how and where it
is to be done, who is to do it, and
how the results are to be evaluated.”
Organizing
Organizing refers to the systematic
arrangement of different aspects of the
business operations to achieve the
planned objectives.
Staffing
Staffing involves “man in the
organizational structure through proper
and effective selection, appraisal and
development of personnel to fill the
roles designed into the structure.”
Motivating
Motivating describes the ways by
which managers enhance productivity
in their employees. 
Directing
In Directing, managers determine
direction, state a clear vision for
employees to follow, and help
employees understand the role they
play in attaining goals.
Coordinating
Coordinating is the integration and
synchronization of the efforts by the
manager, within group
members/departments, so as to provide
unity of action in the pursuit of common
goals.
Controlling
In controlling, managers evaluate how
well the organization is achieving its
goals and takes corrective action to
improve performance.
Management, Art or Science?
Management is both an art and a science. Management combines features of both
science as well as art.
It is considered as a science, because it has an organized body of knowledge
which contains certain universal truth.
It is called an art, because managing requires certain skills which are personal
possessions of managers. Science provides the knowledge & art deals with the
application of knowledge and skills.

A manager to be successful in his profession must acquire the knowledge of science &
the art of applying it. Therefore management is a judicious blend of science as well as
an art because it proves the principles and the way these principles are applied is a
matter of art. Science teaches to ‘know’ and art teaches to ‘do’. E.g. A person
cannot become a good singer unless he has knowledge about various ragas &
he also applies his personal skill in the art of singing. Same way it is not
sufficient for manager to first know the principles but he must also apply them in
solving various managerial problems that is why, science and art are not mutually
exclusive but they are complementary to each other (like tea and biscuit, bread and
butter etc.).
Approaches of Management Study
A brief discussion about different
approaches of management is given
below:
Principles of Scientific Management
 Replacing rule of thumb with science
 Harmony in group action
 Co-operation
 Maximum output
 Development of workers
Limitations
 ignores the functional areas of management (marketing, finance)
 Individual creativity is ignored
 Mobility among workers gets restricted
 Workers are not involved in the planning part
Modern Management Theory,(HENRY FAYOL – 14
PRINCIPLES)

 Division of Work  Authority and

Responsibility  Discipline  Unity of
Command  Unity of Direction 
Subordination of Individual Interest
 Remuneration  The Degree of
Centralization  Scalar Chain 
Order  Equity  Stability of Tenure
of Personnel  Initiative  Esprit de
Corps
1. Principle of Division of Work
The principle of ‘Division of Work’ means to divide a
given activity or work into small pieces or parts so that
each part is handled with great ease and efficiency. This
principle states that every work should be divided into
the smallest possible part and each such part is to be
performed by an individual person. Before assigning the
task to anyone it must be assured that he posses the
required knowledge, skill, and capability.
2. Principal of Authority and
responsibility
Authority is the power to give orders and get it obeyed.
Responsibility means state of being accountable or answerable
or, in other words it means obligation to complete a job
assigned on time and in best way. Authority always comes with
the responsibility. Eg: if a person is given responsibility to
produce 100 units in one week time but he is not given
authority to purchase the raw materials. If there is no raw
material available, he could not complete the target of
producing 100 units on time .
3. Principle of Discipline
Discipline means obedience, respect for authority, and
observance of established rules. Fayol has emphasized
that a sense of discipline should be present in all
employees of the organization at all level so that the
organization can perform and achieve its objectives in
the best possible way. Discipline helps to achieve goals
in the organisation.
4. Principle of Unity of
Command
It says that each member of the organisation should receive
orders from one manager/head and that the employee
should be answerable to that manager/head only. This
principle helps in managing conflicts and solving the
disputes among the members and even avoiding the
confusion.
5. Principle of Unity of Direction
This principle states ‘One Head One Plan’. It means that all
the employees having same objective must be directed
towards the achievement of the common goal and thus
must have one head and one plan. This principle makes
it necessary that there should be unity of action.
6. Principle of Subordination of Individual Interest to Organisational
Interest. This principle states that organisation interest is superior to
the individual interest. And the manager must try to integrate the
individual goal with the organizational goal in such a manner so that
the objectives are accomplished with efficiency and effectiveness.
7. Principle of Centralisation Centralization means that top management
retains most of the decision-making authority. Decentralization means
that decision-making is distributed among all levels of the organization.
This is decided on the basis on size and activity of the organisation.
The bigger the organisation , decentralisation takes place and smaller
the organisation, centralisation become possible.
8. Principle of Remuneration According to this principle every employee in the
organization should receive fair remuneration. The principle of remuneration,
says that when the employees are given a fair remuneration they work with
enthusiasm and show more productivity which results in more output.
Remuneration should be given by taking into consideration skill, expertise,
knowledge , market trend, etc
9. Principle of Scalar Chain Scalar chain is the formal line of authority which moves
from highest to lowest rank in a straight line. This chain specifies the route
through which the information is to be communicated to the desired
location/person. Though this principle is very effective and clear, but it consumes
a lot of time. In case of emergency, information will take a lot of time to reach
the desired position which may delay the action as well as decision. For
overcoming this limitation of scalar chain, fayol introduced the concept of ‘Gang
Plank’. According to this concept, two executives of the organization of different

department at the same level can communicate directly in case of emergency .

10. Principle of Order Order does not mean any command but is used in
different context. “Order” means right arrangement of things and
activities. In other words, order is a normal, correct, or fit condition.
Fayol, in his principle states that there should be a proper order for
everything. He is of the view that in every organization there should be
a fixed place for everything to facilitate smooth working and avoid
wastage of resources.
11. Principle of Equity Equity means combination of fairness, kindness &
justice. In other words, It means the applicability of same rules and
regulations for all employees in the organization irrespective of their
religion, sex, caste, colour, creed,, grade, position etc. The employees
should be treated with kindness & equity if devotion is expected of
them. It implies that managers should be fair and impartial. Similar
treatment is to be given for people of similar position. This principle is
based on the basic thought that “all employees of the organization are
equal”.
12. Principle of Stability of Tenure STABILITY' means no frequent
change, termination and transfer etc. It means that, in an organisation
whenever an employee is appointed for a job, he/she shouldn't be
removed from that position frequently. When one feels secure at his
job, he/she contributes maximum of his capability towards the
organisational objectives. Stability plays very important role in creating
belongingness among the employees.
13. Principle of Initiative According to Fayol, under this
principle, successful management provides an opportunity to
its employees to suggest new ideas, experiences and more
convenient methods of work. Fayol believed that employees
should be encouraged to take the initiative in the work
assigned to them.
14. Principle of Esprit de Corps( Team Work) 'ESPIRIT DE
CORPS' here means team spirit and team work. This principle
emphasizes on team work. 'UNITY IS STRENGTH' is the
essence of this principle. Fayol suggested that there should be
a team spirit in the organisation and all the employees must
consider themselves as member of the organisation.