Management

INTRODUCTION
 Management is a pervasive and universal concept.
No business can work smoothly without
management irrespective of its size, nature and
functions.
 Management is not constrain to business
organization but even non-business organization
needs to manage its functions.
 Management is a process of planning, organizing,
motivating and controlling the enterprise
resources for the purpose of achieving the goals
of the organization effectively and efficiently.
DEFINITIONS (CONCEPT OF
MANAGEMENT)
Traditional concept-
 ‘Management is the art of getting things done through others’.

Mary Parker Follett

 ‘Management consists of getting things done through others’. A
manager is one who accomplishes organizational objectives by directing
the efforts of others.
C.S.George
Modern concept-
 ‘Management is establishing an effective environment for people
operating in formal organizational group’.
koontz and o’donnel
 ‘Management is the co-ordination of all resources through the
process of Planning, Organizing, Directing and Controlling in order
to attain stated objectives’.
F.w. Taylor
FEATURES OF MANAGEMENT
 Organised Activities
 Existence of Objectives
 Relationship among Resources
 Working with and through people
 Decision Making
OBJECTIVES OF MANAGEMENT
 Organizational objectives-
 Survival
 Profit
 Growth

 Social objectives-
 supply of quality products at reasonable prices
 Contribution towards desirable civic activities

 Generation of economic wealth, creation of employment ,etc

 Personal objectives
 Competitive salary
 Personal growth and development

 Peer recognition
 Good working conditions
IMPORTANCE OF MANAGEMENT
 Effective Utilisation of Resources
 Development of Resources
 To incorporate Innovations
 Integrating Various Interest Groups
 Stability in the Society
Nature of Management
 Multidisciplinary
 Dynamic Nature of Principles
 Relative, not Absolute principles
 Management: Science or Art
 Management as Profession
 Universality of Management
MANAGEMENT IS AN ART, A SCIENCE
AND A PROFESSION
 Management is an art because:
 1] It is creative
 2] It involves use of skill.
 3] It involves use of technical know how.
 4] It is directed towards getting results.
 5] It is personalized.
 Management as a Science:-
Science is a systematic body of knowledge
based on certain principles and which are
universally approved.
 Systematic collection and processing of

information
 Output may change though the inputs are

same
 Principles of Management are universally

accepted
 Management is a profession because:-
Profession is an occupation carried by professionals
like doctor, lawyer, architect, chartered accountant,
cost accountant etc. It involves knowledge and
application of it. Management as a profession is
modern concept different from traditional one.
 Existence of Knowledge

 Acquisition of Knowledge

 Professional Association

 Ethical codes

 Service Motive
Levels of Management
Administration Vs. Management

 Practically, there is no difference between

management and administration. Every
manager is concerned with both—
administrative and management function and
operative function.
 However, the managers who are higher in the

hierarchy denote more time on administrative

function and the lower level denote more
time on directing and controlling worker’s
performance.
Difference between Administration and
Management

Basis of Administration Management

Difference
1 Level of Top level Middle and Lower
organisation Level
2 Major Focus Policy formulation and Policy execution for
objective determination objective achievement
3 Nature of Determinative Executive
functions
4 Scope of Broad and conceptual Narrow and
functions operational
5 Factors affecting Mostly external Mostly internal
decisions
6 Employer- Entrepreneurs and Employees
Functions of Management
Planning
 It is the process of thinking before doing. It means

the determination of what is to be done, how and

where it is to be done, who is to do it and how
results are to be evaluated.
Organising
 The function of organizing involves the

determination of activities that need to be done in

order to reach the company goals, assigning these
activities to the proper personnel, and delegating the
necessary authority to carry out these activities in a
co-ordinated and cohesive manner.
Staffing
 Staffing is the function of hiring and retaining a suitable

work-force for the enterprise both at managerial as well as

non-managerial levels. It involves the process of recruiting,
training, developing, compensating and evaluating
employees, and maintaining this workforce with proper
incentives and motivations.

Directing and Leading

 The directing function is concerned with leadership,

communication, motivation and supervision so that the

employees perform their activities in the most efficient
manner possible, in order to achieve the desired goals.
 Controlling
 Controlling is the measurement & correction of
performance activities of subordinates in order to
make sure that the enterprise objectives and plans
desired to obtain them as being accomplished.
 The controlling function involves:
 Establishment of standard performance.
 Measurement of actual performance.
 Measuring actual performance with the pre-
determined standard and finding out the deviations.
 Taking corrective action.
Evolution of Management Thoughts
Evolution of management thoughts
Classical theory Neo-classical theory Modern management
 Approaches to Management:theory
Scientific management Human relations theory Quantitative approach
Theory-Taylor (1910) Mayo and Roethisberger

Process management Behavioural science Contingency Theory

theory (Administrative theory - Maslow and Mc
theory) Fayol-(1910) Gregar

Bureaucracy theory by System Approach to

Weber Management

Social system approach

Decision making
approach
ELEMENTS AND TOOLS OF SCIENTIFIC
MANAGEMENT
1. Separation of Planning and Doing
2. Functional Foremanship
3. Job Analysis (Work study - Method Study, Motion
Study, Time Study, Fatigue Study)
4. Standardisation
5. Scientific Selection and Training of Workers
6. Financial Incentives
7. Economy
8. Mental Revolution
PRINCIPLES OF SCIENTIFIC
MANAGEMENT
1. Replacing Rule of Thumb with Science
2. Harmony in Group Action
3. Cooperation
4. Maximum Output
5. Development of Workers
 TECHNIQUES OF SCIENTIFIC
MANAGEMENT
Scientific task setting

Work study - Method Study, Motion Study, Time Study, Fatigue Study

Planning the task

Setting of Wage Rate

Standardisation of Tools and Equipment

Scientific selection and training of workers

Specialisation of Functional Foremanship

Henry Foyal’s Administrative
Management Theory
 1] Division of Work
Dividing work among the workforce helps
improve the quality of the overall product.
Henri Fayol said that specialization in work
increases the productivity and improves
efficiency. Division of labour also leads to the
specialization, accuracy, and speed of the
workers. This principle is applicable both in
managerial as well as technical work.
 2] Authority and Responsibility
These are the two key things in management.
They work hand in hand. While authority enables
the management to delegate work, responsibility
makes them accountable for any work done
under their leadership.
Henri Fayol said that the power of authority
accompanying responsibility gives the
management the right to order subordinates
along with a duty to be liable for acts of their
subordinates.
 3] Discipline
Nothing good was ever achieved without
discipline. The third principle propagated by
Henri Fayol was discipline. It is one of the
core values in any system. Good behavior and
civilized interactions make the management
work smoothly and efficiently. Good conduct
by employees also helps them smoothly
progress in their careers.
 4] Unity of Command
It basically means following a chain of
command. A person should ideally answer to
just one boss. If an employee is given work
from more than one boss, there arises a
conflict of interest. This can lead to confusion
among the employees and hard to pin
accountability. Thus, it is very crucial to
follow unity of command.
 5] Unity of Direction
For any corporate to prosper, there must be
a unified goal. This principle is crucial as it
incorporates the idea of a workforce working
a singular direction with a unified aim. The
responsibility of planning falls on the
manager and he also must monitor the
progress towards said goal.
 6] Subordination of Individual Interest
The standard rule for any organization is the
work on the collective interest of the
organization as a whole rather than personal
interest of an individual. This principle states
that the interest of an individual will. Be
subordinate to the objectives of the
organization. This applies to the entire chain
of command in the organization.
 7] Remuneration
We all love an appreciation for our efforts.
Remuneration in an organization play as a
motivational force that keeps the employees
fuelled to do well. This remuneration should
be in tandem with the efforts that they put in.
Remuneration may be monetary or non-
monetary. At the end, the employee must feel
that he was appropriately rewarded for his
efforts.
 8] Centralisation
Depending on the size of the organization, it
is important that the power is centralized to
an extent that the decision making is
judicious at all levels and not arbitrary. This
will also depend on the size of the
organization. Henri Fayol said that there must
be a balance in the hierarchy and division of
power.
 9] Scalar Chain
Henri Fayol talks about a clear line of hierarchy from the top rung to the
lowest. So that every employee knows who is their immediate senior in the
times of conflict or crisis. But also the employee must be able to contact any
person in the hierarchy without hesitation during a time of crisis.

10] Order

This is a principle relating to the arrangement of things and people . In

material order, there should be a place for everything and everything should be
in its place. Similarly , in social order, there should be the right man in the
right place.
11] Equity
Employees should be treated with equality and respect.
This is among the core values of management. It will
fall on the manager to ensure that there is no
discrimination of any kind happening in the workplace.
12] Stability of Tenure
No employee should be removed within short time.
There should be reasonable security of jobs. Stability of
tenure is essential to get an employee accustomed to
new work and succeeding in doing it well. Unnecessary
turnover is both cause and effect of bad management.
13] Initiative
Within the limits of authority and discipline, manager
should encourage their employees for taking
initiative. Initiative is concerned with thinking out and
execution of a plan. Initiative increases zeal and
energy on the part of human beings.
14] Esprit de Corps
This is one of the core principles. The management
must ensure that the team remains constantly
motivated and are cooperative with each other. It is
very important to develop mutual trust among
employees as it leads to a positive work environment.
 Bureaucracy Theory

 Bureaucracy is an organisational structure that is characterized

by many rules, standardized processes, procedures and
requirements, number of desks, meticulous division of labour
and responsibility, clear hierarchies and professional, almost
impersonal interactions between employees.

 Max Weber, a German scientist, defines bureaucracy as a highly

structured, formalized, and also an impersonal organization.

 He also instituted the belief that an organization must have a

defined hierarchical structure and clear rules, regulations, and
lines of authority which govern it. Max Weber bureaucracy
ideally has the following characteristics:
 Features of Bureaucracy Theory

 Specialization of work
 A formal set of rules and regulations
 Well-defined hierarchy within the

organization
 Impersonality in the application of rules
 Behavioural Approach

 The behavioural management theory is often called the human

resource approach because it addresses the human dimension of
work. Behavioral theorists believed that a better understanding of
human behavior at work, such as motivation, conflict,
expectations, and group dynamics, improved productivity.

 The main Features of human behavior approach are as follows:

 Since management is a process of getting things done by people,

manager should understand human behavior.

 Emphasis is put on increasing productivity through motivation

and good human relations.

 Motivation, Leadership, communication, participative

management and group dynamics are the central core of this

approach.
 Systems Approach
 System approach is based on the
generalization that everything is inter-related
and inter-dependent. A system is
composed of related and dependent element
which, when in interaction, forms a unitary
whole. A system is simply an assemblage or
combination of things or parts forming a
complex whole.
The basic features of systems
approach are as under:
 (i) A system consists of interacting elements. It is set of inter related and
inter­dependent parts arranged in a manner that produces a unified whole.

 (ii) The various sub-systems should be studied in their inter-

relationships rather, than in isolation from each other.

 (iii) An organisational system has a boundary that determines which parts

are internal and which are external.

 (iv) A system does not exist in a vaccum. It receives information, material

and energy from other systems as inputs. These inputs undergo a
transformation process within the system and leave the system as output
to other systems.

 (v) An organisation is a dynamic system as it is responsive to its

environment. It is vulnerable to change in its environment.
Classification of systems
Open systems
An open system actively interacts with its
environment. By interacting with other systems, it
tries to establish exchange relationships.
 Closed systems

A closed system is self contained and isolated

from the environment. It is a non-adaptive
system. It does not receive inputs often from
other systems and does not trade with the
outside world. Example: An automatic wrist
watch
Contingency or Situational approach
to management
 The basic idea of Contingency approach is that
there cannot be a particular management action
which will be suitable for all situations.

 Rather, an appropriate action is one which is

designed on the basis of external environment
and internal states and needs.

 The way people manage should change

depending upon the circumstances. One size
does not fit all.
Implication of Contingency Approach
 Management is entirely situational and there is
nothing like universal principles of management
or one best way of doing a particular thing.
 The approach suggests suitable alternatives for
those managerial actions which are generally
contingent upon external and internal
environment.
 Contingency approach suggest that since
organisation interacts with its environment,
neither the organisation nor any of its
subsystems is free to take absolute action.
 SOCIAL SYSTEM APPROACH
 Understanding the behaviour of groups & individuals.

 • Features
 Social System, a system of cultural relationship

 Relationship exist between external and internal environment of the

organisation.

 Formal Organisation - Cultural relationships of social groups working

within the organisation.

 Co-operation necessary

 Efforts directed - harmony between goals of organisation & goals of

groups.
DECISION THEORY APPROACH
 Manager – Decision maker
 Organisation – Decision making unit.

 • Features

 – Management is decision making.

 – Members of Organisation - decision makers and problem

solvers. – Decision making - control point in management

 – Increasing efficiency
 - the quality of decision
 – MIS, process & techniques of decision making are the

subject matter of study.

Contributions of Peter Drucker to
Management
 Some of the major contributions of Peter
Drucker are as follows:
 1. Nature of Management
 2. Management Functions
 3. Organisation Structure
 4. Federalism
 5. Management by Objectives
 6. Organizational Changes.
 1. Nature of Management - Drucker does not
advocate to treat management as a strict
profession but only a liberal profession which
places more emphasis that managers should
not only have skills and techniques but
should have right perspective putting the
things into practice. They should be good
practitioners so that they can understand the
social and cultural requirements of various
organisations and countries.
 2. Management Functions - A manager has to
perform several functions: setting of objectives,
making, organising and motivating. Drucker
has attached great importance to the objective
setting function and has specified eight areas
where clear objective setting is required. These
are: market standing, innovation, productivity,
physical and financial resources, profitability,
managerial performance and development,
worker performance and attitude, and public
responsibility.
 3. Organisation Structure - Drucker has decried
bureaucratic structure because of its too many
dysfunctional effects. Therefore, it should be
replaced. Decision analysis takes into account the
four aspects of a decision: the degree of futurity In
the decision, the impact of decision over other
functions, number of qualitative factors that enter
into it, and whether the decision is periodically
recurrent or rare. Such an analysis will determine
the level at which the decision can be made.
Relation analysis helps in defining the structure and
also to give guidance in manning the structure.
 Federalism - Drucker has advocated the
concept of federalism. Federalism refers to
centralised control in decentralised structure
Decentralised structure goes far beyond the
delegation of authority. It creates a new
constitution and new ordering principle. He
has emphasised the close links between the
decisions adopted by the top management on
the one hand and by the autonomous unit on
the other.
 Management by Objectives - Management By Objectives
(MBO) is an performance management approach in which
a balance is sought between the objectives of employees
and the objectives of an organization. The essence of
Peter Drucker ’s basic principle: Management By
Objectives is to determine joint objectives and to provide
feedback on the results. Setting challenging but
attainable objectives promotes motivation and
empowermentof employees. By increasing commitment,
managers are given the opportunity to focus on new
ideas and innovation that contribute to the development
and objectives of organizations.
 6. Organizational Changes. - Since rapid
changes are occurring in the society, human
beings should develop philosophy to face the
changes and take them as challenges for
making the society better. This can be done
by developing dynamic organizations which
are able to absorb changes much faster than
static ones.
Coordination: The essence of
Management
 According to Henry Foyal, “coordination
harmonises,synchronises and unifies individual efforts for
better action and for the achievement of the business
objectives.”

 Management seeks to achieve coordination through its

basic functions of planning, organization, staffing,
directing and controlling. That is why; coordination is not
a separate function of management because achieving of
harmony between individuals efforts towards achievement
of group goals is a key to success of management.
Coordination is the essence of management and is implicit
and inherent in all functions of management
Coordination – The Essence of
Management
 Coordination is the essence of management as it is
inseparable from the following managerial
functions:
 Planning – In planning, coordination allows a
manager to assess what he must include and/or
exclude in a good plan. Planning also facilitates
coordination by integrating various plans through
mutual discussion and exchanging ideas.
 Organizing – Organizing requires a lot of
coordination. Whenever the management assigns
tasks or activities to individuals or groups,
coordination allows them to organize it well.
 Staffing – In staffing, coordination helps to specify the type of
staff required and its rational placement. For better coordination,
the management always ensures that they hire the right number
of employees with the appropriate skills and qualification. This
also ensures that they have the right men in the right job.

 Directing – In directing, coordination provides focus to the

manager. In fact, the purpose of giving orders or instructions to
subordinates is served only when there is a sense of coordination
and harmony between them.

 Controlling – Coordination makes reporting realistic. Through

coordination, the management ensures that the actual
performance is as close to the standard performance as possible.
 Principles of Coordination
 There are different stages to achieve effective coordination.
 Early Stage Principle
 This principle states that coordination must start at a very
early stage. So, in the management process, this is very vital.
Thus, it can be said that this should start at the planning
stage. So, this will ensure that the best plans are made.
Also, it is necessary to implement these plans successfully.
 Continuity Principle
 According to the second principle, coordination is a process
that requires continuity. Thus, it means that the process
should not be only a one-time process. So, the process of
coordination should begin at the time the organization
starts. This shall also continue until an organization exists.
 Direct contact Principle
 This principle believes in direct contact. It states

that managers should directly contact their

subordinates. Thus, it will help in building good
relations for managers with their subordinates.
 Reciprocal relation Principle
 The actions and decisions of the people working

in the organization and their departments are

inter-related. Thus, the actions and decisions of
one department or the person will affect other
departments and people in the organization.
 Clarity of objective Principle
 Coordination in an organization is possible only when there are
clear objectives set in the organization. Everyone working in the
organization should be clear about the objectives. Thus, there
should not be any doubt regarding the objectives of the
organization. Thus, the objective of the organization can be
achieved quickly and easily.

 Effective communication Principle

 Coordination in the organization will be achieved only if there is a
presence of effective communication. So, there should be good
communication present between all the different departments in an
organization. Furthermore, effective communication should also be
present between the manager and their subordinates as well as
within the employees
 Principle of mutual Respect
 Coordination will be successful only if there

exist a mutual respect through out the

organization. All managers working at
different levels must respect each other.
 Types of Coordination
 . Coordination is primarily of two types – internal
coordination and external coordination as described
below.
 Internal Coordination
 Internal coordination is all about establishing a
relationship between all the managers, executives,
departments, divisions, branches, and employees or
workers. These relationships are established with a view to
coordinate the activities of the organization. Internal
coordination has three groups:
 Vertical coordination
 Horizontal coordination
 Diagonalcoordination
 External Coordination
 As the name suggests, external coordination is all
about establishing a relationship between the
employees of the organization and people outside it.
 These relationships are established with a view to
having a better understanding of outsiders like
market agencies, public, competitors, customers,
government agencies, financial institutions, etc.
 Usually, organizations entrust a Public Relations
Officer (PRO) with the responsibility of establishing
cordial relationships between the employees of the
organization and outsiders.
Importance of Coordination