MANAGEMENT AND ENTREPRENEURSHIP - HS03

MANAGEMENT: Introduction-meaning
characteristics of management, scope and
functions of management, management as a
science or art or profession, management vs
administration, roles of management, levels
of management, development of
management thought - Early management
approaches, Modern management
approaches.
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INTRODUCTION

 The concept of management is very old and has

universal application in all types of organisations.

 Building great monuments like China wall,

Taj Mahal, or Great Ancient temples around
the world involved management of huge amount of
resources and thus people behind them were
experts in resource planning and utilisation.
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DEFINITIONS
 Management is the art of getting things done through
others. – Mary Parker Follet
 Management is the process of planning, organizing,
leading and controlling the efforts of the organization
members and using all organisational resources to
achieve related goals
 Management is the process of working with and through
others to achieve goals in a changing environment
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CONTD…
 William F Glueck argues that management is the
effective utilisation of human and smaterial
resources to achieve the enterprise objectives.
 Management involves the process of
POSDCORB.(Planning, Organizing, Staffing,
Directing,(Leading, Motivating, Communication)
Coordinating/ Controlling, Reporting,
(Communication) & Budgeting.
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CHARACTERISTICS OF MANAGEMENT
 MULTI- DISCIPLINARY
 GROUP ACTIVITY
 GOAL- ORIENTED
 FACTOR OF PRODUCTION
 UNIVERSAL IN CHARACTER
 SOCIAL PROCESS
 SYSTEM OF AUTHORITY
 DYNAMIC FUNCTION
 ART AS WELL AS SCIENCE
 PROFESSION
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SCOPE OF MANAGEMENT
 FUNCTION BASED- POSDCORB
 BRANCH BASED- FINANCE, MARKETING,
PRODUCTION, PERSONNEL, OFFICE ETC.
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FUNCTIONS OF MANAGEMENT
 Managers have to perform different functions in
order to achieve the organizational goals.
 These functions are-
 PLANNING-it’s a formulation of future course
of action. Makes things to happen, over coming
the uncertainties of future.
 It is the process of thinking before acting.
 It is said that failure to plan is planning to fail.
 Thus planning is absolute necessary and without
planning, accomplishing the objectives is almost
impossible.
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 Planning provides answers to questions like-

What to do? Why it is required? When to do?
Who is the person to do the task? Where to
do? How to do?
 ORGANIZING- is a process of identifying
and grouping work to be performed, defining
and delegating responsibility and authority and
establishing relationships for the purpose of
enabling people to work most effectively
together in accomplishing objectives.
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 Assigning definite responsibility to each

individual
 Delegating the required authority
 Providing the required physical facilities and
resources.
 STAFFING-involves manning or providing
human resources for various positions of the
organisations.
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 Includes HR planning which determines the type

and quantity of people required, recruitment
which helps in attracting talented candidates to
apply for the jobs, selection of right person for
the right job through different types of selection
tests and interviews, training and developing
people, deciding compensation for the people,
appraising their performance periodically.
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 DIRECTING-process of directing/leading the

human resources to perform the necessary tasks as
per the plans.
 Involves three important components viz.,
communicating, motivating and leading.
 Communicating is a process of conveying
messages. Communicating to employees about the
technical knowledge, job instructions, rules and
procedures and any other information to get the job
done.
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 Motivating- Act of stimulating the people so that they

give their best to the organisation. Ensures that people
work with interest and involvement. Motivated
employees can accomplish right quantity and right
quality of work in right time which is key to the success
of any organisation.
 Managers need to satisfy the needs of employees and
meet their expectations. Good working conditions,
meaningful work, fair compensation, equitable
treatment, recognition and rewards, growth opportunities
etc.,
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 LEADING-process of influencing the people

so that they contribute organisation and
group goals. Manager must be a good leader.
Act as role models and become inspiring
leaders-requires skills for the managers.
 CONTROLLING- is determining what is
being accomplished, applying corrective
measures. Planning and controlling are
known as “SIAMESE TWINS”
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 CO- ORDINATION- Synchronisation of

activities.
 Reporting
 Budgeting
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LEVELS OF MANAGEMENT
 Business organizations irrespective of their size
have many managerial positions in their
structure.
 Managerial positions lying in the chain of
command may be classified into various levels of
management. They are
 TOP LEVEL MANAGEMENT
 MIDDLE LEVEL MANAGEMENT
 LOWER LEVEL MANAGEMENT
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TOP LEVEL MANAGEMENT

 Top Level –highest level in the hierarchy and ultimate
source of authority.
 The managers of top level are accountable to owners and
all stake holders.
 MD, Board of Directors, Chairman, President Vice
President Vice Chairman General Managers constitute
top level
functions of top level are:
 To make corporate plans for the entire organisation.
 To decide upon matters which are vital for survival like
profitability, and growth of the organisation.
 To allocate resources for various projects and departments
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MIDDLE LEVEL MANAGEMENT

 In order to fill the gap which exists between
functional and operational level.
 Link between top and lower level.

Functions of MLM are:

 To prepare departmental plans within
framework of corporate plans given by TLM
 To establish departmental goals
 To decide about means of achieving these
goals.
 To monitor lower level managers by
coordinating their activities.
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LOWER LEVEL MANAGEMENT

 Supervisory level are known as backbone of the
organisations as they are responsible for getting the
work accomplished through the people at
operational level.
Functions are-
 Things done by the core group of workers at the
operational level
 To prepare the plans for their activities
 To issue orders and instructions
 To guide and assist workers
 To motivate workers
SKILLS OF A MANAGER
 Conceptual skills:
Mental Ability to coordinate
Ability to abstract general ideas & apply them
in specific situations.
 Human/ Interpersonal skills:
A managers ability to work with others,
understand employee problems
A motivator /mentor
Getting along with the people.
SKILLS OF A MANAGER
 Technical skills:
A managers ability to use tools, methods,
procedures & techniques.
 Others- political
 analytical
 decision- making
 communication
 motivational
 leadership
 coordinating.
ROLES OF A MANAGER
 Interpersonal- figure head, leader,
liaison
 Informational- communication,
monitor, disseminator, spokesperson.
 Decision- entrepreneurial, disturbance
handler, resource allocator, negotiator
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MANAGEMENT A SCIENCE OR AN ART?

 There is a need to understand the exact nature of
management.
 Management is very old as old as civilization itself.
 Playing vital role in our society.
 Economic development of countries and the
development of business organizations which are
contributing to the progress can be attributed to the
effective management of resources.
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 What is Science? –Systematic body of reasonable

knowledge.
 Knowledge developed through study and practice.
 Application of scientific methods to the development
of knowledge.
 Knowledge is developed from hypothesis,
experimentation and analysis. Each hypothesis is
tested with necessary experimentation to develop
concepts.
 Six important elements of science are thinking,
discovery of facts, verification, prediction,
measurement and expression.
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MUST SATISFY THE FOLLOWING CONDITIONS:

 Existence of systematic body of

knowledge
 Evolved on the basis of constant enquiry
continued observation
 Universal application
 Established must explain a phenomenon
by establishing cause effect relationship.
 Validity and predictability.
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WHAT IS AN ART ?
 Refers to systematic application of skill
or knowledge in accomplishment of
results.
 The main elements of art are:
 Personal skill

 Practical knowledge
 Result- oriented approach

 Regular practice
 Creativity
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MANAGEMENT AS AN ART AND SCIENCE

 HAS both the features of science and art.

 Manager enquires systematic knowledge of
principles and practices of management, and the
applies the know-how combined with his
judgement, skills, abilities and intitution. Hence it
is both.
 MANAGEMENT IS THE OLDEST OF THE
ARTS AND YOUNGEST OF THE SCIENCES.
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MANAGEMENT AS A PROFESSION
 Profession is a calling which one
professes to have acquired specialised
knowledge, which is used either in
instructing, guiding or advising others.
 It refers to any occupation by which a
person earns livelihood.
 In the Modern era, management has
become a profession and organisations
are developing professional managers
who can contribute to their growth.
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ATTRIBUTES OF A PROFESSION
 The characteristic features of a profession
are:
 Existence of organized and systematic body
of knowledge.
 Formalised method of acquiring training and
experience.
 Establishment of representative organisation
with professionalism as its goal.
 Existence of an ethical code of conduct.
 Chartering fee based on services provided,
with due regard for priority of service over
desire for monetary reward.
ADMINISTRATION VS MANAGEMENT
 Administration is different from
management
 Administration is part of management
 Administration and management are
one and the same.

1/23/2014
DISTINCTION B/W ADMN. & MGMT
Factors Administration Management

Nature of work Determination of Implementation of plans &

objectives & broad policies
policies
Scope Major Decisions Framework for
Administration
Level of Authority Top level Mgmt Middle level & Lower
level
Status owners of an enterprise Managerial personnel with
specialized knowledge of
employees
Nature of Govt, military, Business firms which have
organization educational, religious economic motives
Decisions are influenced Decisions are influenced
Influence by external factors, social, by factors such as Values,
political, legal etc beliefs & opinions.
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DEVELOPMENT OF MANAGEMENT
THOUGHT
 Early Stages of Development- MILESTONE, Adam Smith in his
first famous book during 1776 “Wealth of Nations” advocates for
concept of division of labour which is a very popular management
principle even today.
 Division of labour is breaking of jobs into narrow and repetitive
jobs, which results in specialization.
 He illustrates how division of labour leads to high productivity,
with the help of PIN industry.
 He claimed that 10 individuals, each doing a specialized task,
could produce about 48,000 pins a day, where as if there is no
division of labour then producing even 10 pins a day is very
difficult.
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 Second important milestone is Industrial

Revolution-led to replacement of manpower to
machine power and emergence of factory system
with organised manufacturing. Large efficient
organized manufacturing called for systematic
management and the need of manager increased.
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STAGES IN MANAGEMENT THOUGHT

 EARLY MANAGEMENT APPROACHES
1. Bureaucratic model- Max Webber, 1900
2. Scientific model- F. W. Taylor, 1910
3. Functional/Administrative/Process
management- Henry Fayol, 1910
4. Human relations movement- Elton Mayo, 1930
5. Behavioural sciences movement- Abraham
Maslow and Mc Gregor, 1940
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CONTD…
 MODERN MANAGEMENT APPROACHES
1. Quantitative/ Operations Research approach-
F. W. Taylor, along with Gilberth and others
1950.
2. Systems Approach- Boulding, Johnson &
others, 1950.
3. Contingency Approach- Lorsch, Lawrence
and others
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BUREAUCRATIC MODEL
 Propounded by Max Webber in the year 1920
 A Germen sociologist and a teacher at Berlin
University
 According to him, recognition and exercise of
authority was a fundamental question
 Three types of Authority- Charismatic,
Traditional and BUREAUCRATIC.
 His model included the following:
1. Separation of Superior and Subordinate.
2. Division of Labour.
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CONTD..
3. Clear divorce between personal and official
matters.
4. System of rules, regulations and procedures.
5. Hierarchy is based on legal authority and
power.
 CHARACTERISTICS:
Division & Hierarchy of work, rules and
regulations, staffing, impersonal conduct,
Technical competence.
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CONTD..
 BENEFITS:
1. Employees bound to follow rules and regulations
2. Clearly defined duties and responsibilities
3. Division of labour
4. Selection process is merit based
5. Organisation does not suffer when people quit.
 DISADVANTAGES:
1. System suffers from red tapism.
2. No belongingness
3. Resistance to change
4. Rigidity
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FREDERIC WINSLOW TAYLOR

 FATHER OF SCIENTIFIC MANAGEMENT
 Laid the foundation for modern scientific
management between 1880 and 1890
 Born in 1856 began his career as an apprentice
and turner at the Cramp Shipyard,
Philadelphia, USA.
 Later he joined Midvale Steel Co., during
1878 as a machinist at shop floor, by his hard
work quickly moved through the ranks; and
became the gang boss, foremen, and finally
Chief Engineer in 1884.
 Workers were never producing according to their capability and with
fear that they may lose their jobs. Due to ignorance on the part of
worker/mgmt.
 Taylor felt that there was a need to increase efficiency in production
and he was witnessing wastage of resources leading to very low
efficiency.
 He was of the opinion that by increasing productivity, reducing
wastages, companies can increase their profits, which can be
shared/benefitted by both.
 Thus he introduced the popular concept of “a fair day’s work and “a
fair day’s pay” led to concept of scientific management which
according to him establishing standards through systematic
observation, experiments, and reasoning.
02/09/2023
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TAYLOR’S CONTRIBUTIONS
In his famous book Principles of Scientific
Management published in 1911, they are:
 Science, not the rule of thumb
 Harmony, not discard
 Cooperation not individualism
 Maximum output in place of restricted output
 Developing all workers to the fullest extent
possible for their own and their orgn’s highest
prosperity.
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 Time and Motion study-advocated that workers are not

working according to their potential. Hence he
advocated for method study to find best method of doing
a job, and time study to find time required for doing a
job by a normal worker so that all works can be
standardized.
 Differential Payment System-to motivate employees to
produce more and earn more.This plan linked incentives
with production-worker who produces less than standard
would get a low price –worker surpass standard would
get higher piece rate.
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 Scientific Recruitment and Training- emphasized

the need for scientific selection and development
of workers. He advocated that management
should develop worker’s skills and enable them
perform better and also provide career growth.
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ADMINISTRATIVE THEORIES
 Henry Fayol- is considered as “Father of Administrative
Management Theory”. He focused on development of
broad administrative principles applicable to
management.
 Was a French Industrialist, author of “Principles of
Management” in French in 1916. Book got recognition
all over the world after it was translated to English in
1949.
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 CONTRIBUTIONS- 1. Classification of
industrial activities a) Technical
(production) b) Commercial (Buying and
Selling) c) Financial (Search for capital and
its optimum utilization), d) Security
(Protecting property and persons) e)
Accounting (Recording financial
transactions) f) Managerial (planning,
organizing, coordinating and controlling)
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 Principles of Management-Greatest contribution

to management was the 14 principles – Division
of work, Authority and responsibility,
Discipline, Unity of Command, Unity of
Direction, Sub ordination of individual to
general interest, Remuneration, Centralization,
Scalar Chain, Order, Equity, Stability of tenure,
initiative and Espirit de corps.
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 Division of work- means dividing the work

into smaller and smaller activities.
 Authority and responsibility- Right to
command and obligation to perform a task
 Discipline- Obedience of rules, respecting
agreement.
 Unity of Command- Every employee should
receive order from only one superior.
 Unity of direction- Should have a single plan
of action. Must have one head and one plan.
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 Subordination of individual interest to general

interest- Organizational interest is supreme and
interest of any one individual or group, should
not have precedence over interests of
organization as a whole.

 Remuneration- Wages paid to employees for their

services and must bring maximum satisfaction to
both employer/employee.
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 Centralization- Degree of centralization and

decentralization should be decided on the basis of
individual circumstances.
 Scalar chain- Line of authority from top to bottom is
called scalar chain. It should not be broken and departed
needlessly.
 Order- People and material must be at right place. A
place for everyone and everything in the orgn. and they
should be at the respective places.
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 Equity- Managers must be kind and fair to their

subordinates. Must be equally treated.
 Stability of tenure- High labour turnover is cause and
effect of poor management and it is dangerous as well as
costly for the organisation.
 Initiative- Subordinates must be encouraged to take
initiative will exert higher levels of efforts.
 Espirit de corps- Unity is strength and promoting team
spirit will build harmony and unity within the
organisation.
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HUMAN RELATIONS MOVEMENT

 Elton Mayo (1880 – 1949)

He primarily studied the human relations in
the Org. His widely read books are The
human problems of Industrial civilization &
The social Problems of Industrial civilization
He conducted an extensive investigation which
started in 1927 at the Hawrthrone Plant, near
Chicago, of the Western Electric Company.
The Experiment was famously known as
“Hawrthrone Studies”
 HAWRTHRONE STUDIES
 5 girls from electrical assembly testing were separated from the
group & placed in separate room known as ‘Relay assembly test
room’.
 A supervisor attached to them to record their performance.
 The performances were recorded for more than one & half years
by reducing working week from 48 to 42 Hrs & extended rest
periods showed improvements in performance.
 All the improvements were removed systematically & recorded,
output fell a little but was more than the previous.
 All improvements were reintroduced & output roared like
anything.
 It was observed that the morale of the E’ees improved due to the
high recognition as research experiment group due to which
output increased.
 HAWRTHRONE STUDIES
 The experiment continued on other group which
consisted of 14 men & 4 supervisors working in
the Bank wiring observation room.
 It was noticed that there was a definite code of
conduct operating among the E’ees which is
informal . The informal code of conduct was so
strong that both individual desire for greater
earnings & company’s formal requirements were
least important for the E’ees.
CONCLUSION OF HAWRTHRONE
STUDIES
 Impact of social factors
 Importance of informal groups

 Leadership

 Proper communication

 Balanced approach

MAYO’S CONTRIBUTION TO MGMT THOUGHT:

 Human relations approach

 Non economic awards

 Social man

 Organization as a social system

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 Partway through this set of experiments, ELTON

MAYO (1880-1949) and some associates from
Harward, including FRITZ J ROETHSBERGER
and WILLIAM J DICKSON became involved.
 Concluded that informal work groups- the social
environment of employees have a positive
influence on productivity. Many Western Electric
employees found their work dull and meaningful.
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BEHAVIOURAL SCIENCE APPROACH

 Mayo and his colleagues pioneered the use of the
scientific method in their studies of people in the
work environment.
 Later researchers, more rigorously trained in the
social sciences used more sophisticated research
methods and became known as “Behavioral
Scientists” rather than “Human relations
theorists”.
 Scientists brought two new dimensions to the
study of management and organisations.
 First they advanced an even more sophisticated
view of human beings and their drives than did
Mayo and his contemporaries.
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 Abraham Maslow and Duglas Mc Gregor among

others, wrote about “self actualizing” people. Their
work spawned new thinking about how relationships
can be beneficially arranged in organisations.
 According to Maslow, an US psychologist, the needs
that people are motivated to satisfy fall into a
hierarchy.
 Physiological and safety needs are at the bottom of
the hierarchy, in between the Social(affiliation) needs
and at the top are ego needs and self actualizing
needs .
 In general lower level needs must be satisfied before
higher level needs can be met.
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 McGregor, Professor at Massachusetts Institute of

technology, provided another angle on this “Complex
person” idea.
 He distinguished two alternative basic assumptions
about people and their approach to work.
 These two assumptions which he called Theory X and
Theory Y.
 People are lazy and dislike work, they must be
constantly forced into putting forth effort in the jobs.
 On the other hand assume that people relish work and
eagerly approach their work as an opportunity to
develop their creative capacities.
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QUANTITATIVE APPROACH
 After WW-II Britain desperately needed
to solve a number of new, complex
problems in warfare.
 Formed the first operational research
teams, by pooling the expertise of
mathematicians, physicists, and other
scientists in OR TEAMs, and achieve
significant technological and tactical
breakthroughs. The team used early
computers to perform the thousands of
calculations involved in mathematical
modeling.
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 New industrial technologies were being put into use and

transportation and communication were becoming more
complicated.
 These developments brought with them a host of
problems that could not be solved easily by conventional
means.
 Increasingly OR specialists were called on to help
managers come up with answers to these new problems.
Over the years procedures were formalised into what is
now more generally called the Management Science
School or Quantitative Approach to Management.
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 They were of the view that if managing or

decision- making is a logical process, it can be
expressed in mathematical symbols with the
help of models.
FEATURES:
 Usage of mathematical models

 Quantifiable

 Usage of symbols
 OR tools
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LIMITATIONS
 Decision making is just a part of managerial
activity
 No weightage to human element
 Decision making is instantaneous
 Does not take into account Qualitative aspects
 Updated data availability.
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SYSTEMS APPROACH TO MANAGEMENT

 A system is a set of interrelated and
interdependent components which contributes
to the unique characteristics of a whole. A
system is an assembly of interconnected things
to form a complex unity.
 A systems approach to management considers
organisation as a system. It considers
organisation as a part of larger system such as
industry to which it belongs, to economic
system and society as a whole.
 Organization is a system which receives inputs
from external environment, transforms them
into products or services and exports the
outputs to environment.
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FEATURES
 Open system
 Adaptive system
 Organisation as a whole
 Sub- systems
 Boundaries
 Multi- disciplinary Approach
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CONTRIBUTION OF CHESTER BERNARD AND OTHERS

 Inter- dependency
 Environmental influences

 Analysis of problems as a whole

 Dynamic and adaptive nature of organisation

LIMITATION:
 Abstract and vague
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CONTINGENCY APPROACH TO MANAGEMENT

 Manager’s task is to identify which

technique that will, in a particular
situation and at particular time contribute
best to the attainment of management
goals.
 It was developed by managers,
consultants, and researchers who tried to
apply the concepts of the major schools to
real-life situations, they sought an
explanation.
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 As per this approach managers should develop

variable methods or plans as per the
contingencies or situation develop.
 The type of leadership and communication
flow is the major influential.
FEATURES:
 Management is entirely situational

 The policies and procedures should respond to

the environment.
 There is no one best way of managing
MOST LIKELY QUESTIONS
 Differentiate between Administration &
Management.
 Is Management a Science or an Art?
  Briefly explain Henry Fayol’s 14 Principles of
Management.
  What is Management? Write various
features/nature of Management.
 Explain briefly the Roles of a Manager.
 Explain briefly the levels of Management &
Functions of Management.
 Management is…………………..
An Art b) A Science c) A Profession d) All of these. 
 The pioneer of Human relations Movement……………………………..
Maslow b) Adam Smith C) Elton Mayo d) Max Webber 
 Espirit de corps: Unity of strength, Scalar Chain: ……………………….
Span of Control b) unity of command c) Gang Plank d) Order 
 Rule of Thumb is ……………………..
Precision b) Estimation c) Standardization d) Equalization.
 Father of Scientific Management is ……………….
Charles Babbage b) Chester I. Bernard c) F.W Taylor d) Max Webber. 
 Inter Personal Skill is required more at ……………………
Middle Level b) Lower Level c) Top Level d) All Levels.