MODULE 1

MANAGEMENT
INTRODUCTION
 Management Key Concepts
 Organizations: People working together and
coordinating their actions to achieve specific
goals.
 Goal: A desired future condition that the
organization seeks to achieve.
Definition of Management

“ Art of getting things done through people”

-- Mary Parker Follett
Weakness of Mary Parker Follett’s Definition

 Usage of “art” in defining management.

 Not just “Art – Application of knowledge”
 But, also “Science – Acquisition of knowledge”
 Various functions of manager are not
defined.
“ Process consisting of Planning, organizing,
actuating and controlling, performed to
determine and accomplish the objectives by
the use of people and resources”
-- George R Terry
Nature of Management
 All the managers carry out the managerial
functions of planning, organizing, staffing,
leading and controlling.
 Management applies to any kind of
organization.
 It applies to all organizational levels.
 Managing is concerned with productivity
which implies effectiveness and efficiency.

 The aim of all Managers is same: To create a

surplus
Characteristics of Management
 Management is intangible and it cannot be
seen but its presence can be felt by efforts in
production , sales and revenues.
 Management is universal and it is applicable

to all sizes and forms of organizations .

 Management is a group activity and it

involves getting things done with and

through others.
 Management is goal-oriented and all actions
of management are directed at achieving
specific goals.
 Management is science as well a art.
 Management is emerging as a Profession.
Four Functions of Management

Planning
Choose Goals

Controlling Organizing
Monitor & measure Working together

Leading
Coordinate
Planning
 Planning is the function that determines in
advance what should be done .
 3 steps to good planning :
 Which goals should be pursued?
 How should the goal be attained?
 How should resources be allocated?
 The planning function determines how
effective and efficient the organization is and
determines the strategy of the organization.
Organizing
 In organizing, managers create the structure of
working relationships between organizational
members that best allows them to work together and
achieve goals.
 Managers will group people into departments
according to the tasks performed.
 Managers will also lay out lines of authority and
responsibility for members.
 An organizational structure is the outcome of

organizing. This structure coordinates and motivates

employees so that they work together to achieve
goals.
Leading
 In leading, managers determine direction,
state a clear vision for employees to follow,
and help employees understand the role
they play in attaining goals.

 The outcome of the leading function is a

high level of motivation and commitment
from employees to the organization.
Controlling
 In controlling, managers evaluate how well
the organization is achieving its goals and
takes corrective action to improve
performance.
 Controlling involves three steps:
 1.Establishing standards of performance.
 2.Measuring current performance and
comparing against the established
standards.
 3.Taking action to correct any performance
that does not meet those standards.
Managerial Roles
 Described by Mintzberg.
 A role is a set of specific tasks a person performs
because of the position they hold.
 There are 3 broad role categories:
 Interpersonal
 Informational
 Decisional
Roles of Management

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Interpersonal Roles
a) Figurehead: In this role every manager has to perform
duties of a ceremonial nature, such as greeting visiting
dignitaries, attending the wedding of an employee,
taking an important customer to lunch and so on.

b) Leader: As a leader, every manger motivate and

encourage his employees.

c) Liaison: In this role of liaison, every manager must

cultivate contacts outside his vertical chain of
command to collect information useful for his
organization

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Informational Roles

a) Monitor: As monitor, the manager has to scan his

environment for information, interrogate his liaison
contact and his employs.
b) Disseminator: In the role of disseminator, the
manager passes some of his privileged
information directly to his key subordinates who
would otherwise have no access to it.
c) spokesman: As a spokesman, he communicates
the information/goals of organization to his staff,
and progress of work to his superiors.
He also communicates performance of company
to shareholder and the rules and responsibilities to
his subordinates.
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Decisional Roles
a) Entrepreneur: In this role, manager proactively
looks out for innovation to improve his
organization.
b) Disturbance Handler: In this role, manager
must seek solutions for various unanticipated
problems like a protest, flood etc
c) Resource allocator: In this role, the manager
must divide work and delegate authority among his
subordinates. He must decide who will get what.
d) Negotiator: Manager negotiates with the
employees and tries to resolve any internal
problems like trade agreements, strikes etc.
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 Levels of management
 The levels of management consisting of various managerial
positions in the structure of an organization, differ from one
organization to another, depending on the size of business
activity.
 Levels of management are 1)Top management
2)Middle management
3)First line or supervisors.
 The top management consists of chairman, Directors, Company
president, vice president, CEO’s. These are the people who
make policies for the organization, set goals and targets.
 The Middle management includes finance manager, sales
manger, marketing manager, personnel manager, department
heads etc. Supervise first-line managers.
 The First Line managers are the supervisors and foremen.
Responsible for day-to-day operation.

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Three Levels of Management

Top
Managers
Middle
Managers

First-line Managers

Non-management
The Evolution of Management
Theories
EVOLUTION OF MANAGEMENT THEORIES

Part A - Early classical approaches

* Scientific Management
* Administrative Management
* Bureaucracy
Part B - Neo-classical Approaches
* Human relations movement
* Behavioral approach
Part C - Modern Approaches
* Quantitative approach
* System approach
* Contingency approach
Early Classical Approaches
Scientific Management

Systematic study of the relationships between

people and tasks in order to redesign the work
process for higher efficiency.

-- F.W. Taylor
 Contributions of Taylor

1)Time and motion study

2)Differential Payment
3)Drastic reorganization of supervision
4)Scientific recruitment and training
5)Intimate friendly cooperation between the
management and workers
limitations with Scientific
Management
1)Neglects the area of problem-solving and decision
making.

2)Taylor belief that economic incentives are strong

enough to motivate workers for increased production
proved wrong.

3)Taylor’s Time and Motion study is not accepted as

entirely scientific because no two individual can be
expected to work in the same speed.
Administrative Management
• “Henry Fayol” is considered as Father of
Administrative Management .
• He was a French mining Engineer turned as a
leading industrialist and successful Manager.
• “Study of how to create an organizational structure
that leads to high efficiency and effectiveness”.
 Fayol divided business enterprise in to six
groups.
 Technical
 Commercial
 Financial
 Accounting
 Security
 Managerial
 He defined 5 management functions:
Planning
Organising
Commanding
Coordinating
Controlling
Fayol’s Principles of Management
1. Division of work
2. Authority and Responsibility
3. Discipline
4. Unity of Command
5. Unity of Direction
6. Subordination of Individual Interest to the Common Interest
7. Remuneration
8. Centralization
9. Line of Authority ( Scalar Chain)
10.Order
11.Equity
 limitations of
administrative management
1)It leads to the formation of small work
groups with norms and each individual does
not care to know how his job fits in to the
entire pictures.
2)It results in the dissatisfaction of workers
because it does not provide them the
opportunities to use all their abilities.
3)It increases the cost.
Bureaucracy

• Max Weber, a German Sociologist, is

known as the Father of Bureacracy.
• He made a study of different types of
organisation and distinguished 3 basic
types of administration in them:
1) leader-oriented
2) tradition-oriented
3)bureaucratic
 leader-oriented- All employees serve as loyal
subjects to a leader.
 Tradition-oriented- Managerial positions are

handed down from generation to generation.

“ who you are rather than what you can do”,
becomes the primary criterion for work
assignment.
 Bureacratic- Delegation of Management
responsibilities is based on person’s
demonstrated ability to hold the position.
“ No person can claim a particular position
because of his loyalty to the leader or because
the position has been traditionally held by
members of his family”.
Important features of Bureaucratic Administration.

 There is Insistence on following standard rules.

 There is a Systematic division of work.
 Principle of hierarchy is followed.
 It is Necessary for the individual to have knowledge
and training in the application of rules.
Limitations of Bureaucracy
 Over conformity to rules
 Trained incapacity
 Displacement of goals
 No real right of appeal
 Rigid structure
Neo-Classical Approaches
 These approaches are called neo-classical
approaches because they do not reject the
classical concepts only try to refine and
improve them.
 The human relations movement
o Human relations movement is a term used to
describe the ways in which mangers interact
with their employees.
o The real inspiration however came from
Hawthorne experiments done by Elton mayo .
 He briefly describe these experiments in four
parts which was done in telephone parts
manufacturing Industry.
 Illumination experiment.
 Relay assembly test room.
 Interviewing programme.
 Bank wiring test room.
The Behavioral approach
 This approach is an improved and more
mature version of human relations movement
to management.
 This approach was made by behavioral
scientist.
 Scientists were trained in various social
sciences(such as psychology, sociology etc.)
 This approach Spotlights the managerial
importance of such factors as communication,
group motivation and leaders.
 LIMITATIONS
 Its potential not fully realized .
 Managers resist suggestion.

 Difficult to interpret .
Modern Approaches
 Quantitative Approach
 Also called Management Science Approach
 Operation research team

 Formed during World War II by British to solve a

number of new, complex problem in warfare
 Scientist who were engaged for this purpose
were known as operation research because their
work consisted of analyzing operations and
applied scientific research.
 SYSTEM APPROACH

 The previous 3 approaches concentrates only on

specific aspects rather than entire aspects.
 i.e Classical approach- “task” and “structure”
 Behavioral approach- “people”
 Quantitative approach-“Mathematical Decision
Making”
 The systems approach

It is one broad, detailed, conceptual

framework that can help manager diagnose
a problem and decide which tool or
combination of tools will do the best job.
 System Approach
Environment

D
B
E

Sub-systems

C
CONTINGENCY APPROACH

 It’sa Situational Approach or Condition

approach.
 This approach suggests that the task of
managers is to try to identify which technique
to be applied in a particular situation best
contribute to the attainment of goals.
 The contingency approach applies
particularly well in such areas as
environmental
factors, strategy , organizational design,
technology and leadership.
PLANNING
Nature of planning

 Beginning process of management.

 Intellectual process – Requires manager to think
before acting.
 Decision making – Integral part of planning –
choosing among alternatives.
 Planning is Continuous process.
 Planning must be flexible.
Importance of planning

 Minimizes Risks and uncertainty.

 Leads to success.
 Focuses attention on Organization’s Goals.
 Facilitates control-activities conform to plan.
 Trains Executives.
Forms of planning

 Strategic Planning
---> Decides major goals of the entire organization
---> Policies required in pursuing these goals
Examples:
* What business should the organization be in a
decade from now?
* What should the organization look like in 5 yrs?
 Tactical Planning
---> Decides how the resources of the organization
will be used to achieve its strategic goals
Strategic Vs Tactical Planning
Strategic Planning
 Decides goals and policies
to achieve goals
 Done at higher levels of
management
 Long term
 Based on long-term
forecasts about technology,
political environment, etc.
 More uncertain
 Less detailed as not
involved in day to day
operations of organization
Tactical Planning
 Decides use of resources to
achieve these goals
 Done at lower levels of
management
 Short term
 Based on past performance
of organization
 Less uncertain
 More detailed as involved in
day to day operations of
organization
Types of Plans

Objectives

Strategies

Standing Plans
Single Use plans
(Policies,
(Programmes
Procedures,
and budgets)
Methods and rules)
VISION
 “Vision” Dream of his preferred future.
 A vision statement outlines what a company

wants to be in the future.

 A vision should be brief, focused, clear and

inspirational to an organization's
employees. It should be linked to
customer’s needs and convey a general
strategy for achieving the mission .
Mission
”Mission” Defines the present state or
purpose of an organization.

• Mission statement describes what a

company wants to do now.
Objectives

 Objectives are Goals which management wishes the

organization to achieve the mission.
 These are the end points towards Organising, staffing,
directing, and controlling.

 Objective should be distinguished from the word “purpose”.

 The Purpose of an organization is it’s Primary role defined by
the society in which it operates.
 Eg:- Purpose of every hospital is to provide health care
 Purpose is therefore a broad aim applies not only to a given
organisation but to all organisation of it’s type in that society.
Characteristics of Objectives

1. Objectives are multiple in number

2.Objectives are either tangible or intangible
3. Objectives have a priority
4.Objectives are generally arranged in hierarchy
5.Objectives some times clash with each other
Requirements of objectives

 Objectives must be both clear and acceptable

 Objectives must support each other.
 Objectives should always remain valid.
 Objectives must be precise and measurable
Strategies

“Plan which takes into account the environmental

opportunities, organizational strengths ,threats and
weakness and provides a ideal match between the firm
and environment”

Important activities in strategy formulation:

1. Environmental Appraisal
2. Corporate Appraisal
 Environmental appraisal
 It’s a analysis of relevant environment for

the identification of threats and

opportunities.
 Some key factors need to be studied:

1. Political and legal factors

2. Economic factors
3. Competitive factors
4. Social and cultural factors
 Corporate Appraisal
 This involves an analysis of companies

strength and weakness.

 Companies strength may lie in outstanding

leadership . Efficient distribution , personal

relationship with customers ,efficient
transportation and logistics etc.
Operational Plans
 These plans act as means of implementing
the organization's strategy.
 They provide the details of how the strategy

will be accomplished.
 2 types

 Standing plans
 Single-use plans
Standing plans
 These plans are designed for situations that
often repeat and which is used again and
again.
 Eg. New plans for bank loan
 The major types of standing plans are

 Policies
 Procedures
 Methods
 Rules
 Policies
 A policy is a general guideline for decision

making.
 According to knootz “policy is a general

statement of understanding which guides

the thinking and action of managers in
decision making.”
Types of policies
 Classification on the basis of sources
 Originated policies.
 Appealed policies.
 Implied policies.
 Externally imposed policies.
Guidelines for effective policy-
making
 Policies should be stated in writing ,clear
and understandable.
 Policies should reflect the objectives of the

organization.
 Policies need to be formed by both top

managers and his subordinates.

 Policies need to support one another.
 Policies need to be periodically reviewed.
 Policies must strike a reasonable balance

between stability and flexibility.

Procedures
 Policies are carried out by means of more
detailed guidelines called procedures.
 Procedures are used in almost all functional

areas of management.
 Procedures provides basis for uniform

performance.
 Methods
 These are sub-units of procedure and

explain how a particular step of a procedure

is to be performed.
 Methods helps in increasing effectiveness

and usefulness of procedure.

 By improving the methods better

productivity and lower costs can be

achieved.
 Rules
 Rules are detailed and recorded instructions
that a specific action must or must not be
performed in a given situation.
 Rules make sure that a job is done in the

same manner every time bringing

uniformity in efforts and results.
 Rules help organization in establishing

discipline.
 Example for rule : No smoking , entry

restricted.
Single-use Plans

 It is developed to achieve a specific end;

when the end is achieved, the plan is
dissolved.
 It includes

1)Programmes
2)Budgets
programmes
 Two important entities of programme are
time phasing and budgeting.
 Single step in a programme can be

considered as a project.
 Budgets
 These are plans for using resources.
 Budget serve as a tool for planning and

controlling.
 Budgets establishes standards for control.
 Budgets are prepared for sales , purchase,

materials ,labour etc.

Steps in Planning
1)Establishing verifiable goals or set of goals to
be achieved
2)Establishing Planning premises
 Its certain assumption about the future on

the basis of which the plan will be

ultimately formulated.
 Planning premises can be variously classified
as under:
 Internal and external premises

 internal premises include policies and

programs of organization , employees of

organization ,resources and abilities of
organization.
 External premises include political stability,

population growth, technological changes.

 Tangible and intangible premises
 Tangible premises : population growth ,

industry demand , capital and resources etc

 Intangible premises: political stability ,

economic environment , sociological factors

etc.
 Controllable and non-controllable premises

 Controllable premises: company’s

advertising policy, skill of labour force etc

 Non-controllable premises: war , strikes,

natural calamities etc

3)Deciding the planning period

 Lead time in development and

commercialization of a new product.
 Time required to recover capital
investments or the pay-back period.
.
4)Finding the alternative courses of action.
5)Evaluating and selecting a course of action.
6)Developing derivative plans.
7)Measuring and controlling the progress.
ORGANIZING
 Nature of organization
 People
 Common purpose
 Coordination
 Authority
 Division of work
 Environment

“ Organizing is the grouping of activities

necessary to attain objectives ,the assignment
of each grouping to a manager with authority
necessary to supervise it”
• Purpose of an organization
 Purpose of any organization is to achieve
goals for which it is formed.
 Purpose of organization aims at achieving
common objectives through group
members efforts.
 For business organization the purpose is to
develop people and their skills so that they
can contribute towards growth of
enterprise through profits.
Types of Organization
 Line Organization
 Functional or staff Organization
 Line and Staff Organization
 Committee Organization
 Matrix Organization
LINE ORGANIZATION
 The line of authority flows vertically
downward from top to bottom throughout
the organization.

 Command should be given to subordinate

through the immediate superior. There
should be no skipping of levels in chain of
command
Functional Organization
 The line organization does not provide
specialists in the structure.
 Many jobs require specialized knowledge to

perform them. In functional organization

the specialists are made available in the top
positions throughout the enterprise
 Workers consult specialists in various areas

to carry out their work instead of referring

to only boss.
LINE AND STAFF ORGANISATION

 In order to take the advantages of both line organization

and functional organization, a new type of organization
is developed i.e., line and staff organization.

 In line and staff organization, the line authority remains

the same as it does in the line organization.

 In addition, the specialists are attached to line managers

to advice them on important matters.

 They were known as ‘staff’ as they were recruited to

perform staff or specialist function.
Committee Organization
 Some of the administrative tasks cannot be
performed by a single person alone.
 Such situation may call for two or more

person to perform such tasks. This calls for

a committee organisation.
 “A committee is a group of persons
performing a group task with the object of
solving certain problems”.
Types of committee
1) Adhoc committee
2) Permanent or standing committee
3) Advisory committee
4) Educational Committee
Matrix organization
 There are several departments under matrix
organisation.
 Each department is assigned with a specific

task or project.
 Matrix organisation is used when an
organisation has to handle different
projects but all using same set of resources.
 This type of organisation is best suited

where large number of small project are to

be managed.
Staffing

 Filling right post with right person

“Staffing is the process of attracting ,

developing, motivating and retaining human
resources of the organization”
Process of Recruitment and Selection
 Once the requirement of manpower is known,
the process of recruitment starts.

 “The process of identifying the sources for

candidates and stimulate them to apply for
the jobs”
Sources of Recruitment
There are two categories
 Internal-Selecting individuals from the

existing employees of the company.

 External- Selecting the employee from

outside
External Sources includes….
1.Re-employing former employees.
2.Friends and relatives of present employees
3.Applicants at the gate
4.College and technical Institutions
5.Advertising the vacancy
Selection
 “Manager compares the qualification of a
person with the requirement of job and
appoints them or eliminates all those who do
not stand up to this comparison”
Steps in selection procedure

 In order to be able to determine the qualification needed to meet the requirement of jobs,the

company must first of all to analyse the jobs , write job description and prepare job specification.
 It includes

1.Job Analysis
2.Job Description
3.Job Specification
Application Bank
Initial Interview of the candidate
Employment tests
Checking references
Physical or medical examination
Final Interview
Assignment Questions
1) Explain different functions of management
with your own examples
2) What is planning? Explain the different types
and steps in planning.
3) What is staffing? Explain the different types
of organisation.